The Facebook like button
is the topic of many posts here but it's such an important innovation that it deserves to be. I think it's very similar to the Apple App store in that nobody, not even Facebook themselves, could have predicted the huge reach it would have. Today I wanted to have a little think about how important the like button is as a revenue generator to Facebook and just how reliant they are on it as a business.
The Race Is On
Brands and businesses all over the world are competing for likes. Sites like Socialbakers even show league tables to show how you are doing against your competitors. Facebook has managed to turn a function on it's own site in to one of the most desired items on the internet today. There are tons of creative ways in which you can get likes but the biggest and easiest of all is to buy them via Facebook advertising.
More Ad Formats
As you may have seen Facebook have just rolled out more ad formats today to the general public including sponsored stories which essentially relies on stories that you have published to your wall and that have been liked and commented on by others. The logic here is that if you see something that has been liked by others you'll be more likely to check out the content and engage with it yourself.
It's All That Matters To 90% Of People
You can buy likes on Facebook's platform for as little as a couple of pennies (I am not going to link to the sites that offer these services as they are very dodgy but this Google search will give you some idea) and Lauren wrote a couple of days ago about the value of Likes. In short having 100,000 likes might be actually worthless to you as they could be filtering out your updates and have no relevance to your business. The best metric is engagement but from talking to businesses and brands 95% of people care about nothing except the number of likes. If a competitor in the niche is ahead on likes then most people want to overtake them as soon as possible. The person heading up social media or the agency responsible might have some other great data but when it gets to the CEO, board level or managers it always comes back to the likes. It's this sort of mentality that is pumping wads of cash in to Facebook's bank account as the endless race to get more likes accelerates.
Getting people to pay to go from one part of your site to another is the ultimate trick and Facebook have to be applauded for that but I think they know themselves that they'll have to offer more than that. Facebook now generates huge revenues from social gaming and demand a 30% slice of the Facebook credits users are forced to spend within games. Facebook credits will become more omnipresent over the next year and may even power commerce and other areas of Facebook. You also have homepage takeovers and engagement Ads which are bringing in larger chunks of revenue as time goes on. In short Facebook's advertising is not all about the Like button but it certainly is an important part of the site. Who knew one little button could generate so much revenue!