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Are Facebook “Likes” Worth Buying?

Posted by Michael Neubarth
Michael Neubarth
Michael Neubarth is Vice President of Marketing for Comparz.com and founder and Director of eMatrix Media Comm...
User is currently offline
on Friday, 16 March 2012
in Comparz Blog

There are companies that sell Facebook likes, putting out tweets like the following to advertise them:

  • Buy 5,000 Facebook Fans/ Like on your Facebook fan page account within 7 Days time #RETWEET #SMM bit.ly/nBaeuU
  • Buy 10,000 REAL Facebook Fans direct to your Facebook fan page within 1-2 weeks! 
  • Buy Facebook Likes from us at excellent prices with fast and guaranteed delivery. 

The question is, are Facebook likes worth buying?

A recent study by the Ehrenberg-Bass Institute found that less than 1% of fans of the largest brands actually engage with those brands on Facebook. As Matthew Creamer of Ad Age reported, for even the sexiest brands, in most cases, less than 1% of fans engage with the brand.  

“This,” said Creamer, “confirmed something many readers already suspected: Facebook fan bases and actual engagement aren’t the same thing.”

A number of reports have cast doubt on Facebook’s active member numbers and its methods of defining active users.

The implications of low engagement are that the cost and effort put into obtaining numerous Facebook likes may not be worth it. Moreover, buying advertising on Facebook is of less value to brands if the audience is not engaged.

As Karen Nelson-Field told Matthew Creamer, the very tiny rate of engagement found across so many big brands in the Ehrenberg-Bass study is significant. The ultimate question, as she noted, is the cost effectiveness of engaging such a low percentage of fans.


 

Comparz provides user reviews and rankings of software services and tools for small and mid-sized businesses. Click here to view Comparz' business software rankings.


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  • Stephen
    Stephen says #
    http://www.donnaklinenow.com/bIG nEWS FOR ipo and FACEBOOK! iNVESTORS NEED TO READ! Thanks, Comparz. People need to read and learn...

Facebook Changes Not Small Business Friendly

Posted by Michael Neubarth
Michael Neubarth
Michael Neubarth is Vice President of Marketing for Comparz.com and founder and Director of eMatrix Media Comm...
User is currently offline
on Thursday, 08 March 2012
in Comparz Blog

As many observers are realizing and reporting, the dramatic changes being dictated by Facebook’s Timeline are disenfranchising small businesses.

As Jay Baer writes in “14 Ways New Facebook Betrays Small Business,” the changes being ushered in by Facebook’s Timeline will make it difficult for small businesses to build and maintain a Facebook presence.

Given 30 days to revamp their Facebook pages and maintain them going forward, small businesses must scurry to make significant changes they are ill-equipped to handle—particularly those lacking the budgets, creative talent, and dedicated marketing resources of larger companies.

Facebook’s changes generally favor big businesses over small, and a good number of the new features require a staff devoted to the care and feeding of Facebook, a capability beyond the means of many small businesses.

For example, about the new Auto-Play Content feature, Baer notes that it is a “newfound playground for big brands, but probably not something most small businesses will have the dollars or desire to embrace.”

Similarly, about the new Real-Time Insights feature, Baer writes, “This is a nifty opportunity to be sure, but of course will be beyond the reach of small business due to budget and lack of staff to sit around and stare at real-time data streams.”

Even more egregious in Baer’s eyes is the Reach Generator, about which he writes, “This is the end of Facebook as a ‘free’ option for brands, and demonstrates such gall and guile it makes me want to scream at my laptop.”

Among those who share Baer’s view is Mari Cochran, a Facebook business consultant, who in "Facebook and My Gut: Thumbs Down for Small Business," lays out his perceptions of how Facebook’s changes are “not good for small business”  but “very good for large ones.”

Says Cochran:

“Small business owners cannot afford to spend this kind of time setting up and managing a page. They also cannot necessarily spend the money to hire someone to do it for them unless there is real return on the investment of time and resources. It seems that Facebook has gotten so large they no longer care about the small business owner.” 

Michael Katz, managng editor of Commerce on Facebook, sees the new Facebook changes as particularly harmful to small retailers. Katz writes that, “Small to medium sized retailers, who already had little luck selling in Facebook with little, if any, marketing budgets, will be hit the hardest by this move.” 

Katz also sees the changes favoring the big enterprise at the expense of the little guy, noting that “it will be the enterprise solutions of retail applications who will benefit the most from this change.” 

Among the most significant and harmful changes for small businesses, critics say, is the elimination of the default landing page. 

As Victoria Ransom explains on Mashable.com, “The option was one of the primary ways to control the first (branded) impression a user encountered” and its elimination “will drastically change user impressions when they first visit a brand’s Timeline Page.”

Cochran calls the elimination of the default landing page the most important new change and notes that it “does away with a lot of products and a lot of time business owners have spent creating those things.”

Baer and Cochran both scoff at the 30-day notice Facebook gave businesses to implement the new changes. Says Baer:

“Thirty days to find a Cover image; replace the landing tab; change about copy; decide what and when to pin and star; figure out how to handle direct messages; reconfigure legacy apps and pick which two will be shown as a default; and potentially add milestones, is actually a frighteningly short period of time for small business – who do not sit around and ponder their Facebook best practices every day.”

 

Comparz provides user reviews and rankings of software services and tools for small and mid-sized businesses. Click here to view Comparz' business software reviews and rankings.

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  • Business Facebook Page
    Business Facebook Page says #
    Facebook changes may have pros and cons to an individual's business and some of them can't handle these changes but I guess facebo...

Facebook as Fraud: The Leader Technologies Lawsuit

Posted by Michael Neubarth
Michael Neubarth
Michael Neubarth is Vice President of Marketing for Comparz.com and founder and Director of eMatrix Media Comm...
User is currently offline
on Thursday, 01 March 2012
in Comparz Blog

Deceptive legal tactics. Doctored testimony. Suppressed evidence. These are the charges, apparently valid, brought by Leader Technologies against Facebook in a legal case set to resume in four days.

If you haven’t heard of the Leader Technologies vs. Facebook case, you can be forgiven. Reporting on the case has been muffled, suppressed, and banished.

As Donna Kline writes: “Someone answer a question for me: Why hasn’t the mainstream media picked up on the Leader v. Facebook patent infringement case?”

The central issue in the case is whether Facebook’s platform is based on technology “borrowed” illegally from Leader Technologies. In July 2010, a jury found Facebook guilty of “literally infringing” on all 11 of the 11 Leader Technologies patents of which it was accused of violating. 

Facebook’s lawyers were able to win a split decision to invalidate the patent on a technicality, called on-sale bar, using what Leader Technologies says was a bogus argument engineered by Facebook’s lawyers using deceptive legal tactics.

The basis for the on-sale argument is that the patented technology was available for sale before it was patented. However, the law requires Facebook to present clear evidence that this occurred.  Although Leader Technologies provided the source code for the products in question, the code was never introduced or mentioned by Facebook’s lawyers.

Instead of showing any real proof, explained Mike McKibben, Chairman and Founder of Leader Technologies in an interview, Facebook’s lawyers took a black marker and blacked out large portions, about 60%, of his 2009 testimony in what is called Interrogatory No. 9, and presented the 2009 testimony as pertaining to 2002 products.

Said McKibben, “That’s public information. That’s a piece of evidence for anyone to see. There were whole sections of the answer just blocked out.”

Interrogatory No. 9, explained  McKibben, “was a question about our products in 2009, not about our products in 2002. The jury became confused because Facebook alleged that it was an allegation about a product for all time. And we never said it did, there was no proof of that.”

These tactics, characterized as legal “black arts,” are reminiscent of the doctored videos introduced by Microsoft in its antitrust trial. The tactics employed by Facebook’s lawyers are explored in detail on a site called The Origin of Facebook's Technology?

Facebook's claims are baseless and can't be proven, according to McKibben. "We just weren’t selling the invention because it wasn’t ready yet," he said. "That’s what I kept saying at trial, and that’s what my co-inventor said at trial, and they didn’t produce a shred of evidence to prove that wasn’t true.”

If Leader Technologies' claims are true, it means that Mark Zuckerberg stole the technology that was at the heart of Facebook’s inception.

And that is what McKibben is claiming. “Our story is about the underlying framework of Facebook," he said. "Ours was the engine underneath it."

During the trial, it became clear that it was virtually impossible for Zuckerberg to have created Facebook’s technology platform in the timeframe he had to do so.

As Kline reports:

“Are people having a hard time believing that Zuckerberg actually copied a patent to create the FB platform? Are they more inclined to believe that he wrote the code for FB in ‘one to two weeks?’ When the platform in question took Leader Technologies 145,000 man hours and $10 million to create? Seriously?”

Similarly, the Origin of Facebook Technology? site asks, “How can a complete platform be conceived, researched, designed, written, edited, debugged and staged in under two weeks, by one person, while taking a full class load and studying for finals?”

Indeed, the original jury found that Facebook’s technology was lifted from Leader Technologies. And the U.S. patent Office has reaffirmed Leader Technologies' patents.

Said McKibben, “We do not believe that Facebook’s on-sale bar win is valid. They had no evidence, we believe the law is on our side, the facts are on our side, and we are going to prevail. As soon as we have that, we are going to go back to trial and go for damages, willful infringement, and an injunction to get Facebook to stop using our technology.”

Another good question posed by Kline is why was this case, which poses a significant risk to investors, is not mentioned in Facebook’s IPO filing?

This is a high-stakes dispute with big-time ramifications. As PRWeb notes, “If Leader Technologies prevails at appeal, Facebook could be subject to hundreds of millions of dollars in damages.”

And yet we have heard nary a peep about the case in the media? Why?


Recent Comments Show all comments
  • bart
    bart says #
    It is just crazy that a jury agrees that face book is using leader technology. Yet, Leader received nothing as compensation...
  • steve williams
    steve williams says #
    1. Who owns patent #7,139,761? A search of U.S. Patent Office finds that Michael T. McKibben and Jeffrey R. Lamb, Leader Technolo...

The Numbers Gap: How Many Social Media Members Are Really Active?

Posted by Michael Neubarth
Michael Neubarth
Michael Neubarth is Vice President of Marketing for Comparz.com and founder and Director of eMatrix Media Comm...
User is currently offline
on Thursday, 16 February 2012
in Comparz Blog


The actual numbers of active users of social media sites are important to businesses that are considering advertising on those sites. You want to reach an audience of real prospects who are receptive to your products.

However, while the overall number of people who establish an account on services like Facebook, Twitter, and Google+ may be high, many of those members rarely or never use the services, and many accounts are duplicates or fakes.

In “The Hollow Emptiness in Social Media NumbersMost Accounts Are Fake or Empty,” Tom Foremski estimates that the number of active users could be as small as one-third, and that about one-half of user accounts could be phony or blank.

As Foremski writes, “With the possibility that nearly 50% of social network users could be fake or empty user accounts — this is a massive issue for social media marketing.”

The upshot of this for businesses is that their advertising will reach a smaller audience of potential customers. “In social media,” says Foremski, “50% of your marketing could be wasted trying to reach fake or empty profile users.”

Inactive users, empty accounts, and phony users are called ciphers, ghosts, and shadow members.

Exactly how many members are inactive is unknown, but the numbers are large, according to studies. For Twitter, for example, an RJ Metrics study found that only about 17% of Twitter users were active. The number of Google+ active users has been similarly pegged at from 17% to 30%.

Kevin Kelly in "The Ciphers of Social Media" writes that, “Most of the half million people following me on Google+ are ciphers. They have signed up, but have not made a single public post, or posted their own image or a profile, or made a comment. They aren't home.”

Kelly cites a study by two Popular Mechanics writers who hand-checked 1,000 of their Twitter followers and found that only 25% were real and that 49% were fake or spam.

Similar doubt has been cast on Facebook’s active user numbers. In its IPO filing, Facebook touts its overall membership as 845 million “monthly active users” and 483 million “daily active users.”

However, writes Andrew Ross Sorkin in The New York Times, “If it is hard to believe that so many people are clicking on facebook.com every day, that’s because well, they aren’t, exactly. Those eye-popping numbers should have an asterisk next to them.”

Sorkin cites Barry Ritholz, who points out that in Facebook’s IPO filing it labels users as active when they merely click on a “Like” icon from an external site and never actually visit Facebook.

As Ritholtz notes in assessing the impact of these tangential users on Facebook’s monetization capability, “If they click a ‘like’ button but do not go to Facebook that day, they cannot be marketed to, they do not see any advertising, they cannot be sold any goods or services.”

This, says Ritholz, “helps to explain why Facebook’s annual revenue per user is so low.”

In “Why Facebook’s Numbers Are Inflated,” Kenneth Lim says the large numbers of users touted by Facebook “are absolutely not unique” and points to the widespread practice of social gaming on Facebook as causing users to create large numbers of duplicate accounts.

Lim cites All Facebook statistics that show that 53% of Facebook users play games and that 50% of Facebook log-ins are specifically to play games.

Ultimately, says Lim, “the low barrier for playing social games renders a portion of the player base unmarketable.”

Subtract the fake accounts, phony likes, inactive users, duplicate accounts, and unmarketable teens, and you have seriously decreased the potential advertising population on Facebook.

This may be why Facebook is so aggressively foisting advertising on its members in the form of Sponsored Stories and scrolling Timelines. It also may explain why Facebook is so actively selling user data to third parties to boost its revenues.

As Tom Foremski writes, “Clearly, there is a lot more research to be done but equally clear is the fact that you can’t trust —by a truly massive margin — the numbers for things such as “likes” of a corporate Facebook page; followers of a corporate Twitter account; numbers of views of a “viral” video, etc.”

Similarly, as Andrew Ross Sorkin writes, “If large numbers of accounts are fake, and equally large numbers have no profile information, it means that there is a far less commercial value in social media networks than total numbers would suggest.”

Money vs. Members: Facebook’s IPO Exposes Its Split Personality

Posted by Michael Neubarth
Michael Neubarth
Michael Neubarth is Vice President of Marketing for Comparz.com and founder and Director of eMatrix Media Comm...
User is currently offline
on Monday, 06 February 2012
in Comparz Blog


Facebook’s highly anticipated and anxiously awaited IPO finally occurred. There were a number of interesting revelations in the filing—Facebook’s size, revenues, profits, salaries, bonuses, the private jet used by its executives, the risks and challenges it faces, etc.

 

But what was perhaps most significantly underscored in Facebook’s filing was the tap dance and juggling act the company must continually perform in its attempt to please, and appease, its users, advertisers, and investors.

 

This dichotomy is seen throughout Facebook’s filing, and in condensed form in Mark Zuckerberg’s Letter to Investors. At the beginning of his letter Zuckerberg talks in exalted fashion about how Facebook brings together people and strengthens relationships:

 

“At Facebook, we build tools to help people connect with the people they want and share what they want, and by doing this we are extending people’s capacity to build and maintain relationships.”

 

At the end, he talks about Facebook’s commercial side and how, “We hope to improve how people connect to businesses and the economy.”

 

But the average Facebook users do not think about how Facebook connects them to businesses and the economy. Facebook users typically want to share stories, events, and photos with friends, not buy products and see advertisiments.

 

Advertisers recognize this, hence Facebook’s admission that, “Many of our advertisers spend only a relatively small portion of their overall advertising budget with us.”

 

The nature of Facebook as a social network has been at odds with commerce and advertising since its inception.

 

In the movie “The Social Network” the Sean Parker character is asked whether he thinks the fledgling Facebook should sell advertising.

 

You don’t want to ruin the party with ads, he answers, and the Mark Zuckerberg character wholly agrees.

 

The Facebook party in its purest form has been over for a while. To generate revenues, Facebook continually imposes features and ads that annoy and alienate its users.

 

In Facebook’s filing we read, “We intend to invest in additional products for our advertisers and marketers, such as our recent introduction of sponsored stories in News Feed, while continuing to balance our monetization objectives with our commitment to optimizing the user experience.”

 

However, these two opposing forces within Facebook—the optimization of the user experience and the effort to monetize—are incompatible and are being reconciled by force.

 

Like the twin masks of comedy and tragedy, Mark Zuckerberg dons different masks when he talks to Facebook’s members, advertisers, and investors about their interests. 

 

Thus we see recurring rounds of doublespeak used by Facebook in defense of the dubious practices that have earned it a bad reputation—and triggered myriad legal actions—in regard to user privacy, the collecting and selling of members’ information, and the manipulation of its privacy settings. 

 

This is a problem that Google does not face in its search and advertising business, where people actively search for products and generally don’t mind ads related to them.

 

Meanwhile, Facebook’s sheer size and popularity have made it profitable thus far, and promise to keep it so into the future.

 

But now that it is a public company, the pressure to monetize will be even greater, while the problem at its core—of “balancing” user experience vs. monetization—will persist. It will be interesting to watch Facebook tap dance and juggle in its effort to monetize its social network as its life as a public company unfolds.

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