Facebook Nearing the Finish Line

The October Compete.com and unemployment data are now in and guess what? Many of the findings in our previous blog entries regarding Facebook trends have been solidified even further.

The relationship previously identified between Facebook traffic and the unemployment rate has been only strengthened with the inclusion of the October data. As Figure 1 below shows, this month’s increase in the unemployment rate to 10.2% coincides with a similar increase in Facebook unique visitor counts. In fact, the correlation between these two metrics now stands at a whopping 98.2%. The relationship simply cannot be denied during this time. It is quite amazing.

Figure 1

By viewing Figure 2 below we can easily see that with the incorporation of the new October data, Facebook will, without question, actually surpass Google in term of visits by the end of the year (as predicted in our previous blog entry). And, shockingly they may even surpass Google regarding unique visitors even sooner than we could imagine (see Figure 3).

Figure 2

Figure 3

However, one may ask did this major increase in Facebook traffic for the month of October negatively impact some of the other engagement metrics like pages viewed and time spent on site? The answer is an astounding NO. See Figures 4 & 5 below. In fact, October represents some of the most significant jumps in these engagement metrics seen in some time.

Figure 4

Figure 5

Versus YouTube, we see Facebook pulling away at an even more dramatic rate in terms of engagement (Figure 6). They appear to be leaving YouTube in the dust.

Figure 6

There is no question that Facebook is on a roll. Please look for our next blog entry titled “And the Winner is…Facebook.”

Perry & Rhonda

First Google, Now YouTube

In case you did not read all of my last blog entry titled "Has Facebook Been Lucky" you probably missed the fact that Facebook has now overtaken YouTube on a key engagement metric -- average time spent per visit.

I realize both sites are different in terms of content and purpose but it is still an important event -- showing us that that Facebook has the ability to draw us into its grip for longer and longer periods of time per visit. YouTube, on the other hand, has been actually slipping regarding this metric over the past 12 months (see Figure 1).

Figure 1 - Average Stay per Visit, Facebook (blue) vs YouTube (green)

In addition, YouTube has also been losing the battle to Facebook in terms of attracting / growing its customer base. Note the unique visitor trend shown below in Figure 2. Facebook has surpassed YouTube as of February of this year.

Figure 2 - Unique Visitor Counts, Facebook (blue) vs YouTube (green)

And, in terms of raw number of visits by month, forget it. Facebook is leaving YouTube in its dust as we can clearly see in Figure 3.

Figure 3 - Visit Counts, Facebook (blue) vs YouTube (green)

Could it be that Facebook is rendering YouTube to be less valuable than it once was? After all, not only can we post our own videos and share with others on Facebook, we can do so much more!

Perry

Has Facebook Been Lucky?

After having written my latest blog entry on Google versus Facebook and my appearance on the CNBC show Street Signs I got to thinking. The question posed by observers at this stage should not be so much is Facebook doing all that they can to capitalize on the significant increase in traffic and engagement but rather why is it happening and, if more can be done to increase the traffic further or,…could the party all end tomorrow?

We all have to admit the trends I revealed in my previous blog (see Figures 1 & 2 below) are quite amazing showing that Facebook has already surpassed Google in terms of page views and is fast approaching Google in terms of unique visitors. But it begs the question why.

Figure 1

Figure 2

After careful investigation, Rhonda Drake, my business partner and wife, kept staring at the latter curve and thinking it looked familiar. A light bulb went off and she realized it looked the same as the unemployment curve. Upon further examination we determined that the correlation of Facebook unique visitors and the unemployment rate is close to 98%. You can’t get much higher than that. Take a look at the graph below (Figure 3).

Figure 3

You will also notice on Figure 3 that the steep increase in engagement begins to take place last year at the same time the bottom fell out of the mortgage lending industry in August and September of 2008.

So now the question is, does this make sense?

Remember, we must be careful at jumping to conclusions of cause and effect. As a reminder, see my previous blog entry title How is this Economy Impacting us Emotionally which was posted on March 11, 2009.

But in this case I think the connection makes perfect sense. As more and more people were being laid off last year and this year, they began to flock to social media sites, connecting with others and discussing issues and concerns.

What is also interesting regarding the Figure 3 data, is that as the unemployment rate has begun to flatten over the past few months (July – September 2009) so has Facebook’s unique visitor count. Coincidence? I am not sure.

When trying to assess Facebook’s engagement metrics such as page views per visit (or unique visitor) and average time on site per visit we notice a couple of things. First, the number of pages viewed per visit is going down. This alone might indicate to some that the engagement of those visitors is waning. However, when we go a bit deeper in our analysis and examine the average time spent on site per visit we notice a slight upward trend. So what does this mean? It means more time is being spent on fewer pages being viewed. One explanation might be the various games and other engagement tools that Facebook has been promoting. These games might be increasing our time at the detriment of going deeper on the site per visit. Is this a good thing? I am not sure. Does this yield opportunities with sponsors? That is for Facebook to decide. See figures 4 and 5 below for these data.

Figure 4

Figure 5

To help better understand our increasing engagement findings, I decided to make a comparison to YouTube. And, the results are astounding. Facebook has actually overtaken YouTube as of June of 2009 in terms of time spent per visit. Facebook is now more engaging than YouTube. Wow! This is a major accomplishment. See the graph below (Figure 6). This makes sense is light of the fact that Facebook is designed to allow you to share content (including video) easily with your circle. No need to leave Facebook.

Figure 6

So will Facebook soon overtake Google in terms of unique visitors as the graph in Figure 2 might suggest? Or will it still be some time coming?

Based on our analysis it is not possible at this time to predict when, if at all, Facebook will overpower Google in terms of unique visitors. The relatively recent past is revealing a completely different pattern than the more distant past. As such it is hard to forecast the future. Is the economy behind this pattern as previously suggested? Very soon we will know the answer to this question. Hang on.

However, we do feel confident that we can predict Facebook will overtake Google in the number of visits by the end of 2009. See Figure 7 below.

Figure 7

Of course this assumes no major or unforeseen changes in our economic climate. :-)

Perry & Rhonda

Please note that all traffic data for this analysis was sourced using compete.com

Google Vs. Facebook

I was reading an article the other day that revealed Facebook in the UK accounts for 1 in every 7 pages viewed on the Internet. I thought wow, I knew Facebook was big but did not realize it was that big. Then I wondered what this statistic is in the US. And, does Facebook in the US account for more or less of total page views than it does in the UK? I had to find out.

My research revealed some very interesting facts. First of all let me say, that in the US, Facebook accounts for a significantly higher percent of our total page views than in the UK. In the UK, Facebook accounts for 15% of the total pageviews (or 1 in 7). In the US Facebook accounts for, now get this, 1 in every 4 or 25% of our total pageviews. Unbelievable!

Google on the other hand accounts for only 8% of the total pageviews (or 1 in 12). See the figure below that I generated using data from compete.com.

Page Views: Google (blue) vs. Facebook (green)

Is this surprising? Not really. Facebook is, by design, much more engaging. So we should expect this fact.

However, when we look at total number of visits to these two sites, we notice that Google does have an edge as the figure below shows. But, surprisingly, that edge is quickly slipping away. Ouch!

Visits: Google (blue) vs. Facebook (green)

Even for the metric "monthly unique visitors," we can see that Google is also losing its edge here as well.

Unique Monthly Visits: Google (blue) vs. Facebook (green)

Do you think Google is a bit concerned?

I would imagine so. And especially now that Facebook is finally out of the red and making some money. Think about it. They probably have more information on what we as a society are doing, saying, and into than anyone could possibly imagine. We post it all. Facebook has the potential to become a major search portal and source of relevant and timely information. Of course this is assuming that Facebook has the appropriate tools and people in place to mine that data and make it useful. But of course that is a topic for a future discussion.

To play with these figures and create your own data, simply go to http://www.compete.com/ and sign up for a free account.

Perry

Let’s make sure we are not putting Chinese citizens at risk in lieu of profits.

In case you have not heard, the Chinese government is requiring that all manufacturers of PCs being shipped to China be preinstalled with a software package designed to filter pornography and other content called “Green Dam” which is produced by Jinhui Computer System Engineering,

According to Zhang Chenming, general manager of Jinhui Computer System Engineering, the concerns of Green Dam are overstated. He claims the software simply blocks pornography and can be deleted or turned off by the PC owners at any time.

Other sources outside of China are concerned that it is an effort for China’s government to take tighter control over the internet. Some suggest the software may actually allow the Chinese government to spy on the Internet user and tightly control content. I am not sure if this is true but it certainly seems highly likely given their recent actions in bringing down Youtube, Google and other social media sites and blogs during the anniversary of the Tiananmen Square incident.

According to the Wall Street Journal and other publications, PCs manufactured in China have already complied with the mandate and have preinstalled Green Dam. These include PCs manufactured by Lenovo, Inspur and Hedy.

U.S. based computer manufacturers such as Dell and Hewlett-Packard are confused and are not sure exactly what to do at this stage. The mandate is for all PCs to have the software preinstalled as of July 1 of this year.

All I can say (and will say) is I hope Dell and the others examine the software more closely to determine exactly how it might be used against the citizens of China before they blindly install the software on their PCs. If in fact it is like Mr. Chenming has stated, then fine. If not, then we must be concerned with its intent and how it might be used to harm or oppress the citizens of China.

To read more on this topic there are several recent links to the NY Times, Reuters and the WSJ you might wish to consider:

NY Times Article: http://www.nytimes.com/2009/06/09/world/asia/09china.html
Reuters Article: http://www.reuters.com/article/idUSTRE5590ZX20090610
WSJ Article: http://online.wsj.com/article/SB124464392279802213.html

Perry

Interactive marketing spend takes a hit first time in 7 years

The numbers are in from the IAB and for the first time since 2001, interactive marketing spend is actually down versus the same point in time one year ago. But before we get all excited, let's look at the numbers over the past year in total.

To be fair, interactive marketing spend throughout 2008 has been relatively flat and now it has taken its first dip. The graph below from the IAB website clearly shows this fact.

Source: www.iab.net

And when we compare this trend for interactive marketing spend to traditional marketing spend, we notice about a year lag. Traditional marketing spend actually started to decline about a year ago when the recession first hit.

So does this lagging relationship of traditional versus interactive marketing spend make sense?

Let's think about it.

When the recession first hit about a year ago, the first thing to get cut was traditional advertising. Marketers were forgoing expensive direct mail acquisition campaigns in favor of cheaper email retention efforts. Additionally, needing to prove ROI to upper management, advertising dollars also began to shift from less measurable sources like print advertising to those more measurable like search.

Now, let's fast forward to today. The economy is still showing signs of trouble. Budgets need to be cut again. What's left? The answer -- interactive.

Will this drop in interactive marketing spend continue into the second quarter? Will Forrester's $26 billion spend estimate for 2009 interactive marketing spend be adjusted downward? I hope not. I guess we will all know in a few months.

Lets all keep our fingers crossed.

Perry

Interactive marketing spend on the rise

Forrester Research predicts major growth in interactive marketing spend. As the graph below shows, spend is projected to increase from $23 billion this year to over $55 billion by 2014. Wow, I guess the recession is over.

Perry

http://blogs.forrester.com/marketing/2009/05/interactive-budgets-are-growing-at-the-expense-of-offline.html