The Facebook Effect | David Kirkpatrick

Summary of: The Facebook Effect: The Inside Story of the Company That is Connecting the World
By: David Kirkpatrick

Introduction

Get ready to dive into the world of online social networking and its transformative effects on businesses, with the book ‘The Facebook Effect: The Inside Story of the Company That is Connecting the World’ by David Kirkpatrick. This summary offers insights on how companies can leverage social networking websites like Facebook to forge valuable online relationships, hyper-target audience segments, cultivate customer trust, and tap into the immense potential of word-of-mouth marketing. Also, learn about ‘the online social graph,’ the importance of social capital for businesses, and the various advertising methods available for targeted user engagement.

The Power of Online Social Networking for Business

Online social networking is a powerful tool in building and maintaining customer relationships. Websites like Facebook, LinkedIn, and Twitter allow companies to hyper-target specific demographics and gain valuable feedback from customers. By utilizing these platforms, businesses can influence conversations about their products and obtain referrals, leading to increased sales. Companies like Bonobos use Facebook ads to target specific groups of customers based on interests and demographics, leading to increased click-through rates and immediate sales. Dell Computer’s IdeaStorm online community uses crowdsourcing to gain valuable feedback from its online supporters, which led to the development of Linux hardware support. Rob, who sells medical equipment, uses social networking sites like LinkedIn and Facebook to obtain referrals from local doctors and build relationships with potential customers. In effect, online social networking has become the latest version of customer relationship management (CRM) and a vital business-building tool.

Harnessing the Online Social Graph for Business Success

The online social graph presents three significant opportunities for businesses: the ability to leverage networking for sales, target consumers who seek your advertising, and simplify interaction with customers. Utilizing social networking sites to build relationships and create trust, companies can collaborate on cross-selling, crowdsourcing technical support, and testing products prior to commercial release. Companies can now use their social media presence to align their commercial messages with the needs of their customers and reduce customer service costs. In the age of “everyone a publisher,” the online social graph has fundamentally changed the business landscape, offering a vast realm of potential customers for B2C sales, as well as identifying decision-makers in B2B markets.

Advertising on Social Media

Social media platforms like YouTube, Hi5, and Facebook have a massive audience base whom you can target through four forms of advertising, namely targeted ads, appvertising, social actions, and engagement ads. These ads incorporate filters like location, age, gender, etc., to direct content to specific audiences. Business owners can also use platform apps such as games, slideshows, and polls to increase user engagement with the ads. Posting ads on sites discussing related social activities, such as restaurant critiques, can bring traction to businesses. Engaging ads that integrate into the site’s other aspects without disrupting the user’s experience are also viable advertising methods.

The Power of Word-of-Mouth Marketing

Effective advertising can go “viral” by harnessing the power of word-of-mouth promotion. Bonobos and Barack Obama’s 2008 campaign both successfully used social advertising to generate positive buzz about their products and message. Social networking websites are a key platform for creating strong online buzz, particularly among younger voters. By utilizing word-of-mouth marketing, companies can effectively reach a wider audience and generate more donations and volunteers.

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