FACEBOOK

CASE ANALYSIS

Information Systems for Managers

Submitted to
Prof. Prabin Panigrahi
Submitted by
Group 5 | Section C
2016PGP177 KRISHANU BHATTACHARJEE
2016PGP009 ABHINAV V SAGAR
2016PGP363 SHREYA GANGULI
2016PGP163 KALAIVANI G
2016PGP219 MUHAMMED NASSIF
2013IPM019 ANSHUMAN SINGH
2016PGP326 S AKSHAYA
 Q 1 . W H Y D O P E O P L E U S E FA C E B O O K A N D W H AT D O T H E Y D O W H E N
THEY ARE THERE?

Facebook is an online socialmedia and socialnetworkingservice having over

1.3 billion active users.
Facebook is primarily used to share information with the friends in the form
of photos, videos, status updates, personal messages etc. Users may make a
personal profile, add other users as friends, and share updates and send
messages.
It serves as an efficient platform to receive updates about what ones friends
are doing, in real time. It also enables the user to post updates about ones
activities from any where and at any time.
The posts from different friends and sponsored pages are collated into ones
Timeline based on certain algorithms. This gives a user recent updates
from his/her friends and (s)he can interact with it using likes, comments or
share.
 Q1. CONTINUED

Companies use Facebook to share information about their product offerings in the form
of ads and sponsored pages. They also focus on retargeting the audience to increase the
conversion rate by getting relevant information from online and offline data companies.
Facebook also enables third party developers to promote their apps and games through
Facebook platform. Users are attracted to these games and spend quite sometime on
these platforms
People spend 6 hours a day on an average surfing the news feed which includes videos,
photos shared by their friends and the people they are following, sponsored Ads and
websites and playing games created by third party developers
Nowadays, Facebook serves as the best platform to post recent activities, share media,
opinions etc. With the messenger features, including group video calling, more and
more users have thronged to the social media platform, to virtually interact with their
friends and families, irrespective of distance between them.
 Q 2 . E VA LU AT E T H E S U C C E S S O F A DV E RT I S E M E N T O N FAC E BO O K

Facebook started of with the display Ads, wherein the advertisers had to upload
a 110 by 80 pixel graphic, 25 character headline and a 135 character description
and target it to the right audience, based on demographics. But, it wasnt that
effective as only 5 in 10000 displays were clicked.
Later they rolled out Facebook pages which allowed businesses, brands and
products to create a custom Facebook page and attract Facebook users to like
them.
This was followed by Social Ads which focused on turning user interactions into
advertisements for that users friends. Though these ads led to increase in click
through rate, the effect on sales was unclear to the advertisers.
Sponsored Stories and Ads for Applications performed 2-10 times better
than standard ads and were used to target friends of the existing user.
Through promoted posts, Facebook charged the advertiser for pushing the post,
ad or the page contents to a much wider audience. It enabled a company to pay a
fees to attract greater views. Later this was expanded to individuals as well.
 Q2. CONTINUED

Facebook, then, introduced Mobile advertising products. Three quarters of Facebook users
were accessing the site via a mobile device
The various options were mobile sponsored stories, mobile page post ads and mobile
app install ads. Mobile sponsored stories had almost 12 times click rate and 45% less
expensive when compared to desktop ads. App install ads were made use of by 3800 app
developers and these ads resulted in 145 million new app installations.
A sophisticated and data driven advertising tool of Facebook Exchange, a real-time bidding
platform designed to show Facebook ads based on users online browsing history, helped the
advertisers to target the users accurately. This method increased the click rate by 240%.
Custom audience targeting, wherein the advertisers could upload their own contact list of
audience to Facebook and then choose to advertise specifically to them, increased the
conversion rate by 30%.
Facebook also partnered with data companies which again helped the companies target the
right set of Facebook users
While advertising on Facebook was largely successful and revenue generating, there were
privacy concerns and Facebooks less experience in data driven advertising also seemed to be
an impediment.
 Q 3 . E VA LU AT E T H E S U C C E S S O F FAC E BO O K FAN PAG E S

Facebook fan pages were rolled out in 2007, allowing businesses to create custom
Facebook pages and invite users to like them. The businesses would post frequent
updates on these pages, for the users to view and interact.
It was estimated that only 16% of the companys fans could actually see the
companys post on their News Feed, as the timeline algorithm chose posts based on
popularity and relevance.
To improve the visibility, Facebook rolled out Promoted posts in 2012, where a
company could pay a certain fees to attract greater number of views in the users
timelines.
Companies were also able to advertise their pages on Facebook, to get higher number
of likes and views.
This promoted posts was later expanded to individuals as well, allowing people to pay
$7 to make their personal posts more visible in their friends News Feed.
These initiatives helped improve the visibility and reach of the companys pages and
garnered likes from the specific target users that the company is interested in.
 Q 4 . E VA LU AT E FA C E B O O K P L AT F O R M A N D FA C E B O O K F O R
What is Facebook Platform ?
Set of tools enabling third party
developers to develop applications
and have access to information about
the user and use it for acquiring new
users.
Uses :
When developers generated revenue
from in app purchases and
subscriptions out of existing or new
pool of users, they paid 30% of it.
Large number of developers built
Platform due to low cost benefit.
Opportunity :
Travel, media, sports and financial
WEBSITES.
How did Platform help Facebook?
Registering higher user engagement
3000 applications were released in 3 months.
Growth in traffic - Facebook benefitted largely as
applications drove one third of the sites traffic and
accounted for 18% of the time spent on site
The growth in user base helped in securing $240 mil
investment from Microsoft (Advertising agreement
provided scope for entering global market)
Social gaming industry generated a lot of revenue for
Facebook. Facebook could derive monetary benefit in
the form of 30% revenue share on each transaction.
March, 2013 showed 75% annual increase in social
gamesFacebook
install.
Why shouldnt concentrate on
Platform?
Small number of apps have accounted for most
usage, some reporting losses
Developers not adhering to platform rules, leading to
privacy concerns
 Q4. CONTINUED

How did Facebook for Websites help?

Two out of three site registrations through Facebook
Facebook offered large amount of user data that the third
party could use to increase their target customer base
effectively
Publishers saw a 30%-200% increase in registration on
their sites and 15%-100% increase in user engagement
By 2012, 24.3% of the global web had been integrated
Adoption of third party mobile apps increased traffic
immensely. April, 2012 Facebook drove 160 million visitors
What is Facebook for
and 1.1 billion visits to third party apps.
Websites ?
Social gaming industry generated a lot of revenue for
Second generation Platform
Integrating features of Platform Facebook Why Facebook shouldnt concentrate on
with :third party websites this option?
Uses
Loss of privacy has always been an issue for
Signing up at third party websites using
users with integration
Facebook
Third party sites may misuse user data
Interacting with Facebook friends in other
Many users may relent to sharing Facebook
websites
credentials with other sites also undermining
Posting info about other website activity to
Facebook
Facebook

D E V ELO P N E W
A D V E RT I S I N G P R O D U C T S
Facebook being the most
popular social media platform,
attracts the most number of
users
Social Ads helped turn user
interactions into ads
Promoted & sponsored posts
for pages improves visibility
Facebook Exchange and other
customised targeting services
ensures accuracy in targeting
customers
With increasing number of
organizations creating
Facebook pages, the scope of
sponsored revenue can be
increased
Thus, tremendously
investing
in mobile advertisement
install ads, promises a wide growth potential and revenue
to access Facebook will aid in monetizing and ensuring quick returns made on any investments in the mobile apps.
Q 5 . W H I C H O F T H E T H R E E O P T I O N S S H O U L D FA C E B O O K
EMPHASIZE AS IT SEEKS TO MONETIZE?
I N V E S T I N P L AT F O R M A N D INVEST IN MOBILE
D E V E L O P A P P L I C AT I O N S A D V E RT I S E M E N T P R O D U C T S
Most revenues for Facebook came 75% of users access the site
from casual game developers through a mobile device
(30%). Social Gaming is a Expected growth of about $20
trending phenomenon billion in the US in 2015
Over 3000 applications were 12 times click through rates as
released within 3 months of compared to desktop ads
Facebook Platform with high
Allowed brands to turn its posts
estimated growth
into ads
Facebook derived monetary value
Developers could create ads that
from outside developers apart from
prompted user to download apps
being a platform for applications.
and games.
Facebook integrated apps did not
pay despite Facebook creating Mobile apps when used with
Facebook open graph fuelled rapid
value for them. Facebook can claim
growth in traffic (tenfold)
value in the future
Applications drove one third of the Mobile advertising revenue has
sites
trafficlike
products and accounted
mobile for 18%
sponsored been page
stories, mobile increasing consistently
post ads and mobilealong
app
of the time spent onstream
site for Facebook. Thewith the adoption
rapid active users
of mobile devices