How does Facebook stay competitive

The importance of Facebook marketing for the competitiveness of companies

Table of Contents

List of figures

List of abbreviations

1 Introduction

2. Goals and challenges
2.1 Facebook the group
2.2 Classification in the social media context
2.3 Change to the "Consumer Market"
2.4 Get attention

3. Structure and functionality of Facebook
3.1 Private and company user profile
3.2 Facebook Ads and Campaigns
3.2.1 CTR, CPM and CPC
3.2.2 Example campaign
3.3 Facebook Analytics
3.4 Connect and Open Graph
3.5Web2.0 versus traditional media
3.6 Custom Audiences - Define target groups

4. Risks and success factors
4.1 Authentic appearance
4.2 "Risk of ignoring" and "Shitstorm"
4.3 SWOT

5. Recommendations for action and conclusion

6. Conclusion

7. Bibliography

List of figures

Figure 1 User distribution by age and gender

Figure 2 Geographical breakdown of Facebook users (in million)

Figure 3 Geographically distributed sales (in millions)

Figure 4 Comparison of social networks

Figure 5 Criteria for Custom Audiences

List of abbreviations

Figure not included in this excerpt

1 Introduction

The markets around the world are saturated, so that the differentiation of services and products, which are becoming more and more homogeneous, is increasingly driven by communication. Companies from all industries rely on efficiently reaching their own target groups and using content that attracts attention. The path from product competition to communication competition is reinforced by Web 2.0. One also speaks of the interactive web and basically of "social media", these comprise several online platforms that are used as an information channel and communication tool. Facebook is one of these media platforms and is the most widely used network worldwide. With 1.44 billion monthly active users, Facebook is particularly relevant for companies, so that they deal with “Facebook Marketing”.[1] This elaboration is intended to highlight the importance of Facebook marketing for companies and their competitiveness today. Furthermore, the advantages and disadvantages of using Facebook as a communication tool are treated in the form of a SWOT analysis.

2. Goals and challenges

2.1 Facebook the group

Facebook is the most visited website on the Internet and the largest social network in the world with 1.44 billion registered users. The social platform was founded in April 2004 by Harvard students Mark Zuckerberg, Dustin Moskovitz, Chris Hughes, Andrew McCollum and Eduardo Saverin. Initially only operated as a college network, its use expanded rapidly.[2] Facebook has now been translated into 77 languages ​​and has a market value of 340 billion US dollars with 12,691 employees worldwide.[3] The Instagram and WhatsApp platforms also belong to the group.

FIGURE 1 USER DISTRIBUTION BY AGE AND GENDER 4

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Figure 1 shows the demographic distribution of Facebook Usem. It can be seen that most of the users are between 18 and 34 years old. In addition, Facebook is also becoming more popular with the elderly.

Figure 2 Geographical breakdown of Facebook users (in millions) 5

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Figure 2 shows the number of active users broken down geographically. If you compare the number of users from the regions with the total population, 50 percent of those living in North America are registered on Facebook, 34 percent of Europeans and around 9 percent in Asia. If you add Figure 3 here, which distributes sales across these geographical areas.[4][5] shows, it becomes clear that the North American market has the highest turnover despite a comparatively low number of members.

Figure 3 Geographically distributed sales (in millions) [6]

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This leads to a higher level of acceptance for social media in North America. Due to the steadily growing number of members, more and more companies are dealing with Facebook and social media in order to be able to participate in the success.

2.2 Classification in the social media context

Social media is still a relatively new term and so far the literature offers only sparse definitions for this term. Basically, social media boarding schools are platforms and social networks on which people worldwide network with one another, communicate with one another and exchange various formats (texts, images, videos and audio). [7] The internet becomes a place of self-expression, whereby the user is actively involved. The user generates the content himself, so to speak. Social media is divided into the two terms “social” and “media”. Social stands for “social” in the English language and media is the German word “media.[8] Social:

It is about the interaction with other people, the exchange of information and the establishment of social contacts are the primary goals.

Media:

Similar to traditional media, radio and TV, the Internet platforms deliver information and news. In addition, these also offer entertainment.

Facebook is the largest social network, as already expressed in numbers in chapter 2.1 Facebook the group. The following figure shows a comparison between Facebook and other competitors in terms of sizes such as active users, volume of shared content and history.

Figure 4 Comparison of social networks[9]

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2.3 Change to the "Consumer Market"

Social media includes various different tools and platforms that are used for social interaction and entertainment.

A shift in power from companies to consumers can be observed, since the needs and desires of users are at the center of decisions through Web 2.0. A study carried out by the market leader in the information and market research sector in 2012 confirms this finding. The Nielsen company has stated that 88 percent of consumers trust recommendations from acquaintances and friends, 64 percent rely on reviews on the Internet and only 22 percent say they are influenced by advertisements on Google or other search engines. Overall, trust in digital word of mouth has risen to 70 percent of people worldwide.[10]

With its large reach and high degree of interaction, Facebook offers good conditions for recommendation marketing, also known as word of mouth, which means that communication can be carried out quickly and inexpensively. Content is not only created by companies, but users also create them themselves. It can become problematic as soon as there is a loss of control of advertising messages as a result of insufficient or incorrect communication.[11] This new distribution of power leads to greater transparency, so that users can reveal the weaknesses of companies.

2.4 Get attention

The Facebook platform offers a high degree of interaction between brands and consumers, so it offers potential for brands to distinguish themselves. Due to the already high number of members and the still increasing reach, Facebook is an important communication and marketing tool from a company perspective. Facebook users release personal data without being asked, which enables companies to communicate in a targeted manner.

Despite the advantages, Facebook marketing is associated with challenges, as the network contains a large amount of content and these are in competition with the attention of all users. This increases the demand of many users for good content that also offers them added value.[12] In addition, the human brain can only absorb a limited amount when it is overloaded with information. If an individual limit is exceeded, less information than normal can be processed by the brain. The provision and the authentic design of the content is a complex task for companies. On the one hand, it attracts attention and triggers word-of-mouth advertising, on the other hand, brands and products can stand out due to their unique communication quality. In principle, differentiation is an important tool for profiling in the field of marketing and competition, but Facebook often sees similar approaches to campaigns.[13] Many companies rely on concepts such as sweepstakes. The so-called “crowdsourcing” is often used to activate users, to talk about the advertised products and to place the message on an emotional basis. Furthermore, pictures and videos increase the attention of the user, pure text content shows less effect. [14]

3. Structure and functionality of Facebook 3.1 Private and company user profile

Commercial and private users from the age of 13 can set up a free profile page, whereby Facebook asks for the actual name as well as the correct email address.[15] As soon as the account is created, users can interact with others, join groups or take part in events. You can also share content yourself or use the chat and video call functions.

The profile page with chronicle contains demographic and other information (e.g. education, friends) about the respective user under the tab "Info".

3.2 Facebook Ads and Campaigns

The extraordinary thing about Facebook Ads is characterized by target group-specific differentiation according to the interests and demographic backgrounds of users, as they make their data available without being asked. With the help of Facebook tools, “Custom Audiences” are created from this data, target groups that can be narrowed down into different categories. These categories are recorded and selected under the selection options of the Facebook tool "Advertisement Manager", the duration and budget of the campaign to be published is also determined here.

The following figure shows the categories under which the Custom Audiences can be selected. Further information on Custom Audiences can be found in Chapter 3.6.

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Figure 5 Criteria for Custom Audiences

One advantage of this option is that the scatter loss is kept low by behavior-oriented taxation, this development is also known as "behavioral targeting"

[...]



[1] Facebook.com (2016): Third Quarter 2016, https://investor.fb.com/investor-news/press-release- details / 2016 / Facebook-Reports-Third-Quarter-2016-Results / default.aspx; Accessed November 07, 2016.

[2] See Kirkpatrick, D., The Facebook Effect: Behind the Scenes of the Internet Giant, 2011, p. 8.

[3] See https://investor.fb.com/investor-news/press-release-details/2016/Facebook-Reports-Third-Quarter-2016- Results / default.aspx, accessed on 07.01.2017

[4] See Facebook.com (2016): Third Quarter 2016, https://investor.fb.com/investor-news/press-release- details / 2016 / Facebook-Reports-Third-Quarter-2016-Results / default.aspx ; Accessed November 07, 2016.

[5] See Facebook.com (2016): Third Quarter 2016, https://investor.fb.com/investor-news/press-release- details / 2016 / Facebook-Reports-Third-Quarter-2016-Results / default.aspx ; Accessed November 07, 2016.

[6] See https://investor.fb.com/investor-news/press-release-details/2016/Facebook-Reports-Third-Quarter-2016- Results / default.aspx; Accessed November 07, 2016.

[7] See http://oreilly.com/web2/archive/what-is-web-20.html, accessed on November 7, 2016.

[8] See Schlueter, T .; Münz, M., 30 minutes Twitter, Facebook, Xing & Co, 2010, p.9.

[9] See https://www.impactbnd.com/blog/the-difference-between-facebook-twitter-linkedin-google-youtube- pinterest, accessed 12.12.2016.

[10] Cf. http://nielsen.com/de/de/insights/presseseite/2012/vertrauen-in-werbung-bestunken-fuer-persoenliche-empfänger-und-online -evalungen.html, accessed on 07.01.2017.

[11] Cf. Griepentrog, W., Communicating credibly - practical contributions to the principle of credibility, 2012,

[12] Cf. Freter, H., Market and Customer Segmentation - Customer-Oriented Market Capture and Processing, 2008, p.49.

[13] See Kroebel-Riel, W .; Esch, F.R., Strategy and Technology of Advertising; Behavioral and neuroscientific findings, 2011, pages 21-24.

[14] See Zarrella, A .; Zarella, D. (2011): The Facebook Marketing Book, 2011, p. 197.

[15] See http://www.facebook.com/help/createaccount, accessed on January 04, 2017.

[16] Own illustration based on the categories on Facebook.com, accessed 11.11.2016.

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