Creating user incentives

I’ve recently spent a good amount of time looking at systems used to motivate users of consumer websites. Across the board, the systems that are most successful 1) have a social component 2) highlight relevant scores within user profile and 3) award points that have no actual or implied dollar value.

Facebook: Reach and Saturation by Country, Part III

I checked in on Facebook’s growth and added to the data set used in Part I and Part II. The data is a bit too big for a spreadsheet so I used iCharts to make a dynamic chart that allows for easy visibility. Use the slider on the side to zoom in on the other 90+ other countries. Notice that their global growth continues to accelerate.

It’s the recruiters, stupid!

Jobs have long been targeted on the web. The economics involved are attractive. People want good jobs and employers are willing to pay for good employees.

In the last ten years, hundreds of businesses have launched with the goal of using the web to bring efficiencies to job markets and capturing value in the process. As a result, newspaper classifieds have died, consumed almost entirely by dynamic, searchable sites with tens of millions of listings.

Recruiters and headhunters, on the other hand, haven’t gone anywhere.

The classified puzzle

It’s a funny coincidence that Microsoft will be pulling the plug on their little known Live Expo classified service just three days after MySpace announced that they will be ramping theirs up with Oodle. These changes are indicative of the larger trend: the classified game remains elusive for large major new entrants. Facebook‘s classified service has been less than stellar (I can’t even find a link to it right now) and Edgeio has been shuttered while Craigslist and eBay continue to dominate the all-in-one classified scene.

Where’s SelfServe by MySpace?

Back in November of ’07, MySpace announced the future launch of “SelfServe by MySpace” which would “allow advertisers to directly purchase, create and analyze the performance of ads throughout the MySpace network.”  It was supposed to be in beta for two months then launched in early ’08.  It didn’t happen and ClickZ reported last month that SelfServe may launch in later summer or early fall.  MySpace is being left in the dust by Facebook Social Ads and LinkedIn DirectAds.  Now Orkut, Hi5, Bebo, Ning and the others need to step up to the targeted advertising plate as well.

LinkedIn quietly launches Research Network and DirectAds…let the monetization begin.

LinkedIn DirectAds
LinkedIn has quietly launched a beta version of a dynamic CPM text advertising platform called LinkedIn DirectAds. No formal announcement of the launch was made on the LinkedIn blog or elsewhere. According to the DIrectAds FAQ, advertisers will be able to dynamically target ads by age, gender, geography, educational institution, industry, and seniority. Minimum order size for an advertisement is $25, with the minimum number of impressions dependant on the targeting audience chosen by the advertiser. The rate that you pay for a CPM (1000 impressions) changes as you add or remove targeting options from your ad. Apparently the product will give click-through rates to advertisers, but billing will be based on CPM. In a unique twist, ads will also include the advertisers name and a link to their LinkedIn profile in hopes of “increasing transparency and visibility into the advertiser.” Much like the Facebook SocialAds platform, advertisers must have a profile on the network to launch an ad, although LinkedIn says they are limiting advertisers by completeness of profile, number of connections, date of profile creation and a number of other factors. I was unable to access the platform through my profile.

The DirectAds platform will bring LinkedIn closer to Facebook’s Social Ads technology, with these two leaving Bebo, MySpace, Plaxo, Friendster and the rest of the social networking world behind for now. I hope to be able to try the LinkedIn platform soon and give a head-to-head comparison. LinkedIn will continue to extract a premium on their advertising, as it seems they will be setting the price per CPM internally. A true market (e.g. Overture/pre-Panama Yahoo) or partial market (e.g. Google quality score) influence on price would likely result in prices lower than they would like, and they are clearly avoiding a CPC model for a reason since they are measuring CTR anyways. I think this slow transfer is very smart on their end especially considering their pre-IPO status, but as an advertiser I wish they would switch to a free market faster. Their ad margins will likely be lower than what they were getting with their rate card (although perhaps not), but the volume of advertisements will definitely spike upwards as you no longer have to go through a traditional advertising salesperson process to launch a targeted ad on their network.

LinkedIn Research Network
Additionally, on Thursday of last week LinkedIn quietly launched the LinkedIn Research Network, a product the company first mentioned back in February. No formal announcement of the actual launch was made on the LinkedIn blog or anywhere else, but the Research Network product page is live and linked to from the Premium Product footer, along with job, corporate, and upgrade links. Also linked is a 2 page product summary PDF. The product page outlines what is essentially a premium version of InMail (pdf). A Research Network subscriber can send send 20 InMails at once, and no monthly or daily limits are mentioned. Previously, LinkedIn BusinessPlus subscribers had the most InMail access and were limited to 10 InMails per month, so this is a dramatic increase in potential InMail volume. In the past advertisers could send targeted InMail blasts through LinkedIn’s advertising platform at $1 – $5 per recipient.

The LinkedIn Research Network is an attempt to move into the expert network industry and will be sold primarily to hedge, private equity and venture funds. According to a recent Integrity Research Associates report, there are roughly 25 expert networks in existence today. Aside from my company KnowledgeBid, every other expert network service operates on a subscription model. LinkedIn is likely gunning for the fat subscription fees that players like the Gerson Lehrman Group are pulling from investors (+$50k for access to one industry vertical of experts for 6 months), but the product they have launched is far more like the resume search/direct email services offered by Monster, HotJobs, CareerBuilder, Dice, etc. than an expert network. Perhaps down the road LinkedIn will try to facilitate the actual expert matching, but this iteration of the product just enables subscribers to send a large volume of cold emails to potential consultants. Additionally, the product page makes no mention of facilitating consultant payment and the only compliance functionality mentioned is a “research history”. Legal compliance is arguably the largest issue faced by expert networks today, and something that expert network users have come to expert from service providers. It’s possible that LinkedIn is intentionally not involving themselves with payment of experts in an attempt to remove themselves from the chain of liability if their service were to be used to facilitate insider trading or the like.

Congrats to LinkedIn on the product launches. I’m glad to see them competing with Facebook on the advertising technology side of things (let’s see an API guys!) and will certainly be keeping tabs on these products as they mature.

Facebook Ads now targeting professional titles, taking LinkedIn head on…

Facebook continues to quickly and quietly improve their advertising platform. In yet another innovation launched without formal announcement, Facebook now allows advertisers to target ads based on professional titles in user profiles. Previously ads could only target by keywords listed in users’ “interests” field. Now Facebook has indexed professional titles and allows for dynamic targeting through the Facebook Ads platform. Perhaps the recent launch of the advertising feedback function was in anticipation of an aggressive move towards monetization via heightened ad targeting? We’re still waiting on the Facebook Ads API but LinkedIn is still using a massively inflated CPM rate card despite their recent $1B valuation and and MySpace still uses Google adwords, putting Facebook miles ahead of the rest of the social networking pack when it comes to advertising technology.

Facebook quietly launches advertising feedback

The Facebook advertising platform continues to advance ahead of the rest of the social network pack. We’re still waiting on the API, but they’ve recently snuck out a feature that allows users to indicate whether they like or dislike an ad served up to them. Where previously there was just a link for “more ads”, there are now StumbleUpon style thumbs. Clicking on one of them pops up a window with feedback options. Screenshots below. The fact that Facebook is implementing these kinds of features before they launch an Ads API shows that they are approaching mass advertising very carefully. They know that they need users to make ads have value, and the better the ads are the more valuable their ad space will be. Also, it’s quite possible that having some interaction with ads beyond just clicking them will incentivize users to click more ads. The Facebook advertising platform continues become more and more interesting.

620,000,000 profiles

I’ve recently been doing some analysis focusing on the growth rates of major social networks and resume databases (I’m saving major blogging platforms for another day, although I’m guessing there are ~400M blogs out there). For the purposes of this analysis I calculated the user profile CAGR for each major social network and resume database, assuming 1M profiles in the launch year and ending with the best estimate of user profiles today (May 2008).

The results show that there are nearly 620,000,000 robust user profiles among these services today, a figure that has grown at a 64% CAGR since ’95. Orkut has grown at the highest CAGR (231%) while MySpace claims the largest raw number of profiles (173M). The chart below nicely illustrates the social networking explosion staring in ’03, underlined by the steady growth of resume databases starting in the mid 90s. The exponentially higher growth rates of social networks can be attributed to the viral features that have come to define them. Traditional resume databases are useful but are generally non-viral so they continue to grow steadily. This analysis does not take into account spam and fake profiles and the chart massively simplifies the growth trends by retrospectively applying each company’s CAGR.

• CareerBuilder
• Alexa #8
• Launched 1995
• 24M resumes
• Average 1.85M additions per year
• 28% CAGR

• HotJobs
• Alexa #1 (Y! site)
• Launched 1996
• 30M resumes
• Average 2.5M additions per year
• 33% CAGR

• HI5
• Alexa #76
• Launched 1996
• 98M user profiles
• Average 8.16M additions per year
• 47% CAGR

• Monster
• Alexa #337
• Launched 1999
• 80M resumes
• Average 8.88M additions per year
• 63% CAGR

• MySpace
• Alexa #3
• Launched 2003
• 173M user profiles
• Average 34.6M additions per year
• 180% CAGR

• LinkedIn
• Alexa #54
• Launched 2003
• 22M user profiles
• Average 4.4M additions per year
• 86% CAGR

• Facebook
• Alexa #5
• Launched 2004
• 70M user profiles
• Average 17.5M additions per year
• 189% CAGR

• Orkut
• Alexa #51
• Launched in 2004
• 120M user profiles
• Average 30M additions per year
• 231% CAGR

Facebook: Reach and Saturation by Country, Part II

Updated here.

Roughly six months ago I posted some information that I dug out of Facebook’s then just launched Facebook Flyer Pro advertising platform. I’ve been poking around with Facebook again the last few days and recent talk about Facebook’s valuation inspired me to update my report. Facebook has improved their advertising platform, now just called Facebook Ads, and while ad creation is still manual, they offer CPC payment and social features on top of the incredible targeting they had with Flyer Pro. They still also display the number of users that an ad will target, so messing around with the UI can give you some interesting information about Facebook’s user base. Here I’ve added current data to the spreadsheet I started six months ago. In short, Facebook has added ~28 million users in the last 6 months, growing at an average 140% in the countries where they released data six months ago and today. 70% of their growth was in North America and Europe. I updated population figures so that saturation percentages would be accurate.

Updated saturation leaderboard:
Canada: 28.22%
Norway: 24.04%
UK: 16.88%
Australia: 13.30%
Sweden: 12.20%
Denmark: 10.73%

Trailing 6 month growth leaders:
Turkey: 875%
Israel: 393%
Colombia: 393%
France 294%
Malaysia: 255%
Switzerland: 199%

Gigaom: VoIP on Facebook is flat.

Very interesting article reviewing the weak state of voice apps on Facebook over at GigaOm. Given Facebook’s ~50,000,000 users, these numbers are really, really bad. Analysis included in the article from AppHound:

Facebook: Reach and Saturation by Country

Updated here.

Facebook’s recently launched Flyer Pro advertising platform offers a phenomenal, albeit manual, mechanism for targeting advertisements on Facebook.  It also shows some interesting statistics about Facebook’s reach. I ran some quick numbers to see which countries were most saturated with Facebook’s +48M users. The winners:

Canada: 22.12%
Norway: 18.68%
UK: 10.58%
Sweden: 9.09%
Australia: 6.64%
United States: 6.57%

Andreessen: “If you can program it, then it’s a platform. If you can’t, then it’s not.”

It’s not often that I disagree with Marc Andreessen, but his recent post on web platforms draws some pretty arbitrary lines. According to his definition of web platform, Craigslist, eBay, eLance and other web-based marketplaces are not web platforms, nor are any of the gazillion blogging platforms, not to mention payment platforms, video & photo sharing platforms, etc.

It’s no secret that Facebook’s recent explosive growth has in large part a result of their F8 platform, which allows outside developers to build applications using the Facebook API. Andreessen (a founder of Netscape, Loudcloud/Opsware, and most recently Ning, which allows users to make their own social networks) tries to clarify some of the resulting confusion surrounding the “platform” buzzword and describes three types of platforms that exist on the web but first states that, “If you can program it, then it’s a platform. If you can’t, then it’s not.“ However, much like F8, EC2, and S3 allow programmers to plug in and build on a service as they wish, sites like Craigslist and eBay allow non-programmer users to do the same. Further, placing an item on eBay is, techically, “progamming” eBay, as is placing a photo on flickr, putting this blog post on wordpress, or paying someone through PayPal…and the line between programmer and user is becoming thinner by the day (e.g. Yahoo! Pipes).

Not surprisingly, Andreessen’s Ning service, according to his definition, not only qualifies as a web platform, but is also a “Level 3″ platform, the only others being Salesforce.com, Second Life, and “sort of” Amazon (Facebook is only a “Level 2″). I think Ning is a great service, and Andreessen is clearly an amazing entrepreneur and writer, but these classifications seem arbitrary. “Platform” is being thrown around a lot these days, but this is likely in large part due to the explosion of flexible, adaptable web applications that let users and programmers alike manipulate services to fit their needs.

LinkedIn getting aggressive…feeling the heat?

I posted a few days ago about Yelp getting aggressive/deceptive with the tactic of getting users’ email login and passwords to scrape contacts. Yelp CEO Jeremy Stoppelman was kind enough to respond to my post and clarify that Yelp keeps scraped info private and offers the feature only for user benefit. LinkedIn has recently started intensifying similar efforts. Nearly every time I add someone as a contact I’m prompted with a screen asking for my email account info so they can get in there and take my contact information. I’m sure LinkedIn would state that they too are only using this information for legitimate purposes, but it’s still something I’m not about to give to anyone. LinkedIn has got to be feeling the heat with all the recent Facebook hype.

Ecosystems and Platforms

I’ve been kicking some ideas around in my head for a few weeks about a post on developer ecosystems and platforms, looking back to the battle for the desktop between Apple and Microsoft and their divergent developer kit strategies and then fast forwarding up to Salesforce.com’s AppExchange and most recently the Facebook Platform. I thought through some stuff and even started writing a few times…then I read this post on Marc Andreessen’s blog and realized I shouldn’t even bother. Definitely give it a read if you are trying to figure out what all the hype is about. Also realize that Andreessen himself is deep in the business side of social networking with his own company Ning which released a Facebook application today. Ning allows users to create their own social networks, but their Facebook application…get this…lets users develop branded Facebook applications, which will be hosted by Ning. All things to keep in mind when reading Andreessen’s post.

The moral of the story: hosting a platform on which others operate and run businesses is a good place to be…it’s tough as hell to get there though.