•Facebook Is Quietly Implementing A Plan To Destroy Television

• Jim Edwards|Dec.  8, 2012,  11:25 AM

  Read more:  http://www.businessinsider.com/facebook-is-quietly-implementing-a-plan-to-destroy-television-2012-12#ixzz2EfJLBP3rFacebook’s management has recently adopted a new mantra: that Facebook’s  audience is the equivalent of three Super Bowls every day. COO Sheryl  Sandberg said it on the Q3  2012 earnings call. And vp/global marketing solutions Carolyn Everson said  it at our Ignition 2012 conference in New York recently.

  Read more:  http://www.businessinsider.com/facebook-is-quietly-implementing-a-plan-to-destroy-television-2012-12#ixzz2EfJBzWVxIt turns out that this mantra is a clue to how Facebook  intends to start stealing the advertising dollars that currently go to  television. Facebook has made three recent moves that all point to an attack on  the ad dollars that previously went to TV:

  • Facebook is now the second biggest server of online video,  behind YouTube.  Although Facebook is a distant second to YouTube, that’s still huge progress.  Facebook now shows more video than Yahoo!, Vevo, Microsoft, AOL  and everyone else.
  • Facebook has a partnership with Nielsen, to develop “Nielsen Online  Campaign Ratings” (OCR), which measure the audience for Facebook ad  campaigns in a similar way to how Nielsen measures TV audiences, by reach and  frequency. The result is that it is now a lot easier for big advertisers to  compare their TV ROI with their Facebook ROI.

  Read more:  http://www.businessinsider.com/facebook-is-quietly-implementing-a-plan-to-destroy-television-2012-12#ixzz2EfIziY00Facebook has a partnership  with Datalogix, a consumer data company. It allows advertisers — particularly big packaged goods companies like Procter & Gamble and Unilever — to target their own customers with ads inside Facebook, and to compare those  campaigns against control groups that did not see them, and thus calculate  exactly how many sales any Facebook campaign created.

Put this altogether — along with the notion that Facebook is bigger than the Super  Bowl, TV’s ne plus ultra of audiences — and it appears that  Facebook sees TV’s old media dollars as ripe for the picking.

Lucy Jacobs / Spruce Media

Spruce COO Lucy Jacobs

“Facebook is 100 percent  primed to take down those TV budgets,” according to Lucy Jacobs, COO of Spruce  Media, which handles about $150 million in Facebook ad buying annually, from  advertisers like Samsung  and P&G. The Nielsen aspect allows Facebook campaigns to be measured with  “gross ratings points,” which are a measure of the reach and frequency of a  campaign as a seen by the target consumers. “They are building a case for moving  TV dollars to Facebook as they help brands quantify how Facebook reach and  frequency maps to GRP’s,” Jacobs tells us.
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She notes, of course, that this is not going to happen overnight. It’s still  really “easy” for advertisers to continue buying TV: The infrastructure and the  habits have been in place for years and will not easily be dismantled.

But it could happen, if Facebook gets its way.

Likewise, Rob Leathern, CEO of Optimal, a social media analytics company,  says “I think they’d love that to happen.” Again, like Jacobs, he’s careful to  note that the shift of dollars from TV to Facebook would be a long-term event.  But, he says, “They’re definitely going to be doing more video stuff next year.  … there’s a lot of evidence to suggest that’s gonna be shifting and allowing  people to do more interruptive advertising, rather than just the [display ads]  on the right hand side. Obviously, TV is the original interruptive medium.”

 

Rob Leather / Twitter

Facebook has no choice: It  needs video to prosper.

Facebook is actually under some pressure to build a big, robust video  offering to fend  off international competition. In Russia,  Facebook has only 7 million members. The big domestic social network there  is VKontakte, which is a rip-off of Facebook. It has 40 million members.

Read more:  http://www.businessinsider.com/facebook-is-quietly-implementing-a-plan-to-destroy-television-2012-12#ixzz2EfIg1RLUThe reason it’s popular is because it allows the free streaming of pirated  movies. Many, many Russians spend their evenings logging in to a watch a movie  (illegally) — free of charge.

Of course, Facebook, can’t offer illegally copied movies. But it can do what  Google’s YouTube has done — offer a huge amount of rights-managed video for  free. Online video  watching is already eating into TV ratings and ad dollars.

This is where it gets really interesting: The main difference between  Facebook video and YouTube is that Facebook’s audience is logged-in while it  watches, and Facebook can let advertisers target viewers using all its available data  on each user. On YouTube, by contrast, a huge chunk of the audience watches  anonymously because you do not need to sign-in to see the content.

Facebook video is, therefore, the kind of dream situation that the television business  can never hope to match. The only question is, can CEO Mark  Zuckerberg build it?

Disclosure: The author owns Facebook stock.

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