Saturday, July 2, 2011

Here's Why Facebook Is Worth $70B

Photo Credit - Flickr Common

It’s standard now days to see an icon on a company’s website that allows readers to connect with the company on their Facebook page with one click.

Have you noticed a recent change at the end of television commercials? In many ads, the consumer is now directed to the company or product’s Facebook page instead of to their website.

Did you know 1 in 9 people in the world, yes the entire world, are now on Facebook?

On June 29, 2011, USA Today reported, “Facebook has an estimated 750 million members worldwide.”

On May 11, 2011 About.com offers, “The latest official current world population estimate, for mid-year 2010, is estimated at 6,852,472,823.” National Geographic estimates there will be a world population of 7 Billion at the end of 2011.

According to CNET on June 20, 2011, “Facebook is on the verge of becoming the largest display advertiser in the United States, displacing Yahoo.”

Facebook may be the Microsoft of the 2010s. It has changed the way the world communicates and interacts. With this kind of exposure, social media in general, and Facebook in particular, are changing business standards especially in the advertising and public relations sectors.

While some in the PR area have not been early adopters, PR expert Rebecca Crowley, CEO of innovative RTC Publicity, is rapidly moving clients to what she calls “PR 2.0.” With a decade of experience in Public Relations, Rebecca has had an eclectic client base allowing her to pull from many different areas of her vast history in the industry.

Rebecca believes passion for the story and “the business” keeps her ideas fresh. Often, Rebecca is called upon to manage traditional marketing and social marketing campaigns. She knows why Facebook is worth $70B. Rebecca explains the difference between “traditional PR” and “new PR” in the evolving public relations sector, “A year or so ago the term “traditional PR” did not exist. It was created to define the difference between what most of the business world is familiar with and digital marketing which became strong in 2010 with initial momentum in 2009.”

She notes, “Traditional PR is ‘media relations’ with outlets that have been around for years such as print (dailies, weeklies, monthlies), and broadcast TV and radio. It involves a publicist using their contacts in order to properly pitch a story idea to journalists/editors/reporters/producers. It focuses on conveying a ‘key message(s)’ of a company, product or individual. It is said that the term PR or Public Relations Representative as we know it today was created by Edward L. Bernays in the 1920’s. Other forms of a traditional publicist are those that produce events, trade shows and handle crisis management.”

Rebecca continues, “The ‘New PR’, or as she calls it ‘PR 2.0.’ involves pitching blogs and creating social media campaigns involving such sites as LinkedIn, Twitter, Facebook, Flckr, YouTube, and others. The idea is to join a conversation versus to only deliver a key message.”

She advises, “When complimenting a traditional PR campaign with a social marketing campaign, often times traditional media outlets get their news from these conversations had online. In the reverse, many of the things that bloggers are writing about stem from things read or seen on TV. Many of the articles that are shortened and posted online come from traditional media sources. PR 2.0 has created the need for today’s publicists to be savvy in both areas - messaging and conversations.”

Rebecca understands why some in the PR industry have been slow to move to this new PR. “I think a big part of this is fear of new technology and new social media outlets. It is a lot to keep up with. Facebook and the likes are constantly changing interfaces. If a publicist is not engaging in these activities or reading the latest happenings, it is easy to quickly get lost in the technology. It also requires a lot of time investment.”

She believes “Today’s publicist should be engaging in conversations online not only for their own companies but their own clients. For so long it was believed that if you called a media player enough they’d take the time to hear your pitch.”

Rebecca offers, “ A lot of ‘old school’ publicists still believe in blasting the media and seeing what sticks. It’s now time to engage them not spam them. By hanging out online and reading whatever you can, a publicist, or any individual, now can know inherently what the editors and producers want to hear. A lot of power has been given to the individual outside of PR messaging only. Publicist must respect that and capitalize on the power of the immediacy of social marketing.”

Rebecca does see her PR colleagues catching up and moving more quickly to new PR in 2011. She notes, “The 2009 ‘social marketing expert’ could be anyone who knew the technology. Now it is apparent that having traditional PR experience while understanding the technology is an important advantage. It is a very exciting time to be a publicist. If you are ‘with it’, you’ll be in the PR game for quite some time. It makes me said when I hear or see one of my colleagues doing things the ‘old’ way. I call them pitching machines. There’s no strategy or new knowledge to it.”

Ms. Crowley recommends these basics to clients beginning a new PR strategy: “Know the audience and know that people now expect information instantaneously. They must also respect that traditional PR is not dead, just enhanced. While focusing on social marketing, it is still necessary to go after more traditional media outlets. This takes more time, but the two together are a powerful combination. Above all, anyone who is looking for a good publicist should do their homework and not hang onto only dreams of getting the ‘biggie’ traditional outlets. A blog with the right demographic can be just as powerful of a hit.”

Her advice to the PR industry in general for 2011 is simple, “Stay tuned. Web 2.0. is not going anywhere, and Web 3.0. is being conceived. If a publicist or company feels behind in the times, it is time to brush up.”

Rebecca summarizes, “There is plenty of good literature out there both in print and online. Joining social marketing sites often also has feeds for news on the latest developments in technology and trends in social media. If a publicist or company does not catch up now, early in 2011, the year will rapidly leave them behind as new developments take place. There is more competition than ever out there now that the consumer has been given great power.”

It’s hard to believe the PR industry would not understand and embrace the strategy of social media universe and buzz creation. This has been the holy grail in business social media marketing emerging with growing strength since Obama’s presidential campaign in 20078

Bloggers and social media platforms can be the medium for a business’ planned “grassroots” marketing campaign as well as a spontaneous, unplanned, unexpected, and genuine grassroots buzz around a company or product. Facebook is certainly a the leader in this aspect.

Micah Warren of Large Media, Inc. specializes in designing and implementing unique social media marketing strategies. He touts the power of bloggers in the new PR reality, “The PR aspect I like about bloggers is how their content can spread across the internet like wildfire. One hit on an important blog, and you could have an extra 20, 50 or 100 more hits when it gets picked up by other websites and blogs. In PR, that is gold. And if all these sites are including the link to your website, then that is built-in SEO. Those inbound links are great for increasing your rank amongst search engines.”

He continues, “It’s an absolute must companies monitor blogs and forums to see what their customers are saying about them. Nothing is worse than someone posting a complaint about your product on a forum and then you standing by and doing/saying nothing. By logging on and addressing the issues, customers see that you actually care about them and are actively looking to react to their concerns.”

Micah relays why companies are now directing consumers to their Facebook page in ads, “Its one thing to have company news and information on your website. It’s important. But, how often are people hanging out on your corporate site? Probably not that often. Where ‘are’ they hanging out? Places like Facebook and Twitter. So go to where they are and engage them.”

He offers an understanding to adding social media to a PR campaign, “It has to be noted that interacting with your customers on Facebook should not be looked at as a direct pipeline to sales. It’s not. It’s about building long-term relationships between your brand and your customers. Looking for quick sales with Facebook is a big mistake companies make that turns them off to the whole process. They get turned off because they didn’t look at it the right way in the first place.”

Micah offers realism to clients with, “Another huge mistake companies make with Facebook and Twitter is thinking that this is all about them and what they want to say about themselves. That is a great way to get people to ignore you completely. Social media is about them, not you. So engage your audience and start a conversation with them. Listen to them. Social media is about the time to listen, not speak.”

Looking forward in 2011, the PR industry must understand consumers now want a real seat at the table. To serve their clients in a meaningful way, they must understand social media can easily facilitate this. Potential and existing consumers become most invested when they feel ownership in the process.

The expectation of two-way participation and communication in real-time is an emerging and lasting dynamics with social media user consumers. The days of business CEOs thinking the dynamic remains I talk, you listen, and you don’t question my message are over. The PR professional must understand the new consumer dynamic is you spoke, I listened - now you listen to me as I speak my experience and opinion.

An exchange and a more personal individual relationship are expected. Should a business CEO ignore the two-way communication that social media fosters and consumers expect, they will be viewed as out-of-touch and replaceable no matter how great the initial excitement, the strength of message, or the value of the product.

Solicitation and participation in two-way communication is how consumer loyalty can be achieved and solidified. Those that facilitate a successful Facebook, Youtube, and Twitter campaign for their products and services that go viral are the winners in turning social media platforms into a positive return on investment and consumer base increase.

Companies can excel at using social media to bring together like-minded people that love their product and are a target market for their product. They can encourage proactive two-way participation and communication with their customers cementing loyalty to their company and their brand.

When the PR professional comprehends that consumers are producers, directors, and have control over message to other consumers ultimately, they will add to their success by not only developing their client’s message with consumers, but by developing their client’s real-time relationship with their consumers via social media.

Micah Warrens sums up the necessary PR mindset shift, “Think about it just from a media point of view: how many stories are broken on Twitter first? Tons of them. You’ll see mainstream media outlets passing along breaking news from the Twitter accounts of other journalists. It is the age of immediacy and you can either join in and embrace it, or continue to wait for a morning newspaper with information that you could have had the day before at 2 p.m. Heck, why do you think all the newspaper websites now have blogs and Twitter pages!”

On June 30, 2011, Reuters noted, “Chief Executive and founder Mark Zuckerberg told reporters in a visit to Facebook's Seattle office on Wednesday that the company planned to ‘launch something awesome’ next week.” The awesomeness will most likely be in the mobile or tablet arena.

On June 27, 2011, CNET headline says “Facebook valuation seen at $70 billion.” Two weeks earlier on June 13, 2011, CNBC headline says, “Facebook IPO Valuation Could Top $100 Billion.”

With 2011 half over, business can still successfully establish a winning PR campaign and consumer relationship by accepting the new marketing paradigm components are real time information, consultation, and participation. Social media is the perfect platform, and Facebook may well be the perfect social network – for now. That’s why Facebook may well indeed be worth $70B.

Follow Brenda Krueger Huffman on Twitter and Facebook.

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