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Facebook Advertising is Fool's Gold

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Re: Facebook Advertising is Fool's Gold

#31

Post by planetguy »

cageface wrote: post #20
tomelders wrote: post #14

Earlier quoted context omitted.

You sell cars. I listen to Donovan, The Beatles, The Stone Roses, Mozart, Au, REM, Dj Shadow, Handsome Boy Modelling School, Chopin, Ludovico Einaudi and Daft Punk (to name but a few). I've liked pages for five star greek hotels, the burger place on the corner, the guy who sells awesome falafel's on Hoxton market. You know I saw this video of a talking dog that I thought was totally awesome. Just this month, I read a…

I actually like Volkswagens and Volvos, but you won't find that anywhere in my Facebook data. I'd bet there's actually a pretty high correlation between many of the things you just listed and a preference for VWs and Volvos. It doesn't really take that many data points to start filling in the blanks. But I think this kind of targeting is going to be more useful in selling you a product you don't yet know about but ar…

Yeah, the preferences listed may not indicate a preference for Volvo over Audi, but they're certainly consistent with someone I'd target for near-luxury European cars rather than giant Chevy pickup trucks, Korean mini-vans or tiny econo-boxes.

Daft Punk? You're 30-ish. Mozart and Chopin? College graduate. Like a 5-star Greek hotel (but not that many other luxury items)? Shit, I've narrowed down your disposable income into a fairly narrow bucket. I can also tell that you don't have any children. I would target the shit out of you for Volvo, Volkswagen, Acura, Infiniti, Mercedes, BMW and Audi.

And that's just my own guesstimates. Backed up by proper data I'm sure I could do way better.

Re: Facebook Advertising is Fool's Gold

#32

Post by redwood »

There are two primary types of ads

1) ones that give you what you want

2) ones that drive demand

Google dominates (1) and I assume Facebook is trying to dominate (2) which includes a lot more display advertising (and TV, and billboards). Facebook probably thinks a lot of demand-driving advertising can be accomplished through viral online marketing through FB platforms and they are likely trying to exploit these channels with services for paying customers.

Imagine paying Facebook to simulate something being trendy among people's trend-setting friends. It'll be a fine line but this must be what they hope to do.

Agree the $100B is too high, but certainly they're easily a profitable company, long-term.

Re: Facebook Advertising is Fool's Gold

#33

Post by RegEx »

cletus wrote: post #18

I agree with this and have posted numerous comments here to that effect, particularly on the value of intent (with respect to the effectiveness of online advertising). Th attitude of "eyeballs not revenue" and finding that repeatable, scalable formula are almost a religion on HN and in startups. It's generally a strategy I approve of. Even dropping 20% since the IPO (currently trading at just over $30 as I write this…

I'm confused over the significance of the P/E ratio. It seemed like a big deal when I was reading these stories about the FB IPO, but then I got to look at other ratios in tech. Amazon's is much higher than FB's 93.72 at 175.23 [0]

[0]: http://www.google.com/finance?q=NASDAQ:AMZN&authuser=0

Re: Facebook Advertising is Fool's Gold

#34

Post by kelvin0 »

Ever since FB has gone public, I've noticed so much 'negative' stories/comments, and I really wonder why these are only coming out now... FB has been around for a long time and nothing has changed in its marketing strategies since it seems.

Personally, I don't have a FB account, or own any stock but this targeted 'bashing' seems useless and has the smell of targeted anti-FB propaganda. Why don't we focus on the real issue being people rights to privacy and the shady practices of FB?

More focus on the real issues please, do not get distracted by the 'anti-hype' of the week.

Re: Facebook Advertising is Fool's Gold

#35

Post by tatsuke95 »

RegEx wrote: post #33
cletus wrote: post #18

I agree with this and have posted numerous comments here to that effect, particularly on the value of intent (with respect to the effectiveness of online advertising). Th attitude of "eyeballs not revenue" and finding that repeatable, scalable formula are almost a religion on HN and in startups. It's generally a strategy I approve of. Even dropping 20% since the IPO (currently trading at just over $30 as I write this…

I'm confused over the significance of the P/E ratio. It seemed like a big deal when I was reading these stories about the FB IPO, but then I got to look at other ratios in tech. Amazon's is much higher than FB's 93.72 at 175.23 [0] [0]: http://www.google.com/finance?q=NASDAQ:AMZN&authuser=0

Oh, don't worry, the bears consider it out of whack and a good short as well.

I'm not exactly sure what the deal is with Amazon, but their p/e was much more realistic in the not-so-distant past:

http://ycharts.com/companies/AMZN/pe_ratio

Re: Facebook Advertising is Fool's Gold

#36

Post by tatsuke95 »

kelvin0 wrote: post #34

Ever since FB has gone public, I've noticed so much 'negative' stories/comments, and I really wonder why these are only coming out now... FB has been around for a long time and nothing has changed in its marketing strategies since it seems. Personally, I don't have a FB account, or own any stock but this targeted 'bashing' seems useless and has the smell of targeted anti-FB propaganda. Why don't we focus on the real…

>"Why don't we focus on the real issue being people rights to privacy and the shady practices of FB?"

These things are all connected. The public is being sold the idea that this is a $100BB company, one of the biggest in the world. Yet when some of us look at it (yourself, even) we see a great tool that doesn't justify the price as a business: as cletus says at the top of the thread, Facebook may just be another ad network that depends on its massive, engaged user base. Yet FB has problems with how it actually treats those users, through privacy issues and shady practices..

Re: Facebook Advertising is Fool's Gold

#37

Post by dj_axl »

RegEx wrote: post #33
cletus wrote: post #18

I agree with this and have posted numerous comments here to that effect, particularly on the value of intent (with respect to the effectiveness of online advertising). Th attitude of "eyeballs not revenue" and finding that repeatable, scalable formula are almost a religion on HN and in startups. It's generally a strategy I approve of. Even dropping 20% since the IPO (currently trading at just over $30 as I write this…

I'm confused over the significance of the P/E ratio. It seemed like a big deal when I was reading these stories about the FB IPO, but then I got to look at other ratios in tech. Amazon's is much higher than FB's 93.72 at 175.23 [0] [0]: http://www.google.com/finance?q=NASDAQ:AMZN&authuser=0

> I'm confused over the significance of the P/E ratio.

Ratios have to be considered in context of expected future growth and expected future profit margin (revenue grows a little but profit grows a lot). Even considering that, some ratios seem extreme.

FB Forward P/E: 44.85

FB PEG Ratio: 1.67

AMZN Forward P/E: 85.52

AMZN PEG Ratio: 5.92

CRM Forward P/E: 69.06

CRM PEG Ratio: 3.29

Re: Facebook Advertising is Fool's Gold

#38

Post by afterburner »

RegEx wrote: post #33
cletus wrote: post #18

I agree with this and have posted numerous comments here to that effect, particularly on the value of intent (with respect to the effectiveness of online advertising). Th attitude of "eyeballs not revenue" and finding that repeatable, scalable formula are almost a religion on HN and in startups. It's generally a strategy I approve of. Even dropping 20% since the IPO (currently trading at just over $30 as I write this…

I'm confused over the significance of the P/E ratio. It seemed like a big deal when I was reading these stories about the FB IPO, but then I got to look at other ratios in tech. Amazon's is much higher than FB's 93.72 at 175.23 [0] [0]: http://www.google.com/finance?q=NASDAQ:AMZN&authuser=0

One thing that is said about Amazon a lot is it sinks its profits into growing the business. That makes it more attractive as a growth stock since they are actively expanding their business into new areas, but affects their current bottom line with all the R&D overhead.

Re: Facebook Advertising is Fool's Gold

#39

Post by tatsuke95 »

planetguy wrote: post #31
cageface wrote: post #20

Earlier quoted context omitted.

I actually like Volkswagens and Volvos, but you won't find that anywhere in my Facebook data. I'd bet there's actually a pretty high correlation between many of the things you just listed and a preference for VWs and Volvos. It doesn't really take that many data points to start filling in the blanks. But I think this kind of targeting is going to be more useful in selling you a product you don't yet know about but ar…

Yeah, the preferences listed may not indicate a preference for Volvo over Audi, but they're certainly consistent with someone I'd target for near-luxury European cars rather than giant Chevy pickup trucks, Korean mini-vans or tiny econo-boxes. Daft Punk? You're 30-ish. Mozart and Chopin? College graduate. Like a 5-star Greek hotel (but not that many other luxury items)? Shit, I've narrowed down your disposable income…

>"I would target the shit out of you for Volvo, Volkswagen, Acura, Infiniti, Mercedes, BMW and Audi."

And why not Lincoln, Cadillac, Lexus, Saab and Jaguar? In fact, Volkswagen isn't a luxury brand (no more than Honda, Nissan, Toyota), and hardly fits among the brands you mentioned above. Yet it's a preference of the OP. So, I think you've proven his point; your targeting hardly tells us anything.

Re: Facebook Advertising is Fool's Gold

#40

Post by loumf »

RegEx wrote: post #33
cletus wrote: post #18

I agree with this and have posted numerous comments here to that effect, particularly on the value of intent (with respect to the effectiveness of online advertising). Th attitude of "eyeballs not revenue" and finding that repeatable, scalable formula are almost a religion on HN and in startups. It's generally a strategy I approve of. Even dropping 20% since the IPO (currently trading at just over $30 as I write this…

I'm confused over the significance of the P/E ratio. It seemed like a big deal when I was reading these stories about the FB IPO, but then I got to look at other ratios in tech. Amazon's is much higher than FB's 93.72 at 175.23 [0] [0]: http://www.google.com/finance?q=NASDAQ:AMZN&authuser=0

Some interesting observations about Amazon's P/E ratio here http://www.mondaynote.com/2012/05/27/decoding-share-prices-a... on Jean-Louis Gassée's "Monday Note".

Basically, Amazon forgoes profit to get market share, will push out all competitors, build a huge barrier to entry with excellent execution and logistics, and then raise prices to increase profit. Traders are buying now and holding until that happens.

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