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Why I’m betting my retirement on Facebook stock today

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Re: Why I’m betting my retirement on Facebook stock today

#21

Post by prof_hobart »

vibrunazo wrote: post #12
tworats wrote: post #3

I hope he's not actually putting his retirement money on the line here. It's not about the quality of the ads, which he argues will get better with more data. It's about intent. When I search on Google, my natural next action is to click a link. That link can be organic or an ad. If it's an ad Google stands to make money. When I browse Facebook, my natural next action is not to click a link to an outside service/stor…

I just checked and Facebook gives you the option to buy ads per click, around $0.25 per click in my category. So why does it even matter if it has a low CTR? If the user didn't click, you didn't pay for it anyway. If the user does click, well there's your intent. From my point of view as an advertiser, how is the CTR even relevant? Why do I care if google has 1% CTR and Facebook has 0,1%? If you assume both has the s…

You may get the same clicks/$ but you may get a significantly different numbers of clicks/day, and surely that's going to be an important consideration when you're deciding where to spend you advertising $.

Re: Why I’m betting my retirement on Facebook stock today

#22

Post by apalmblad »

I feel like the author is overstating the benefits of a like button on every page. Google - and many other ad networks - also know the products being viewed if the site owner is using retargetted ads. Might facebook offer compelling retargetting? Sure. But I imagine the conversion rates would be, at best, comparable to other retargetting networks. Probably not a game changer.

I'm not even mentioning the reach of analytics.

Re: Why I’m betting my retirement on Facebook stock today

#23

Post by jack-r-abbit »

vibrunazo wrote: post #12
tworats wrote: post #3

I hope he's not actually putting his retirement money on the line here. It's not about the quality of the ads, which he argues will get better with more data. It's about intent. When I search on Google, my natural next action is to click a link. That link can be organic or an ad. If it's an ad Google stands to make money. When I browse Facebook, my natural next action is not to click a link to an outside service/stor…

I just checked and Facebook gives you the option to buy ads per click, around $0.25 per click in my category. So why does it even matter if it has a low CTR? If the user didn't click, you didn't pay for it anyway. If the user does click, well there's your intent. From my point of view as an advertiser, how is the CTR even relevant? Why do I care if google has 1% CTR and Facebook has 0,1%? If you assume both has the s…

CTR is one piece. But conversion in another. And intent is important. Take two identical ads on Facebook and Google, with the same CTR and CPC, if the Google traffic has more intent to take action beyond the click (I'm not saying they are necessarily) then Google traffic is worth more. I worked in the LeadGen space for a good number of years and conversion rate is a very important piece of the puzzle. Generally speaking, intent leads to a better conversion. Plus, advertisers do them selves a disservice to attract higher clicks if that means their conversion rate is lower because the ad was bait. I've noticed that FB ads tend to have a spammy/scammy feel to them... bait.

Re: Why I’m betting my retirement on Facebook stock today

#25

Post by Havoc »

All the author of that article managed to convey is an overwhelming sense of fuzziness in his thinking. e.g.

>Do the math on this: instead of growing it organically, we wake up one day and Facebook has taken over Google’s Adsense business. That’s $10B in revenues alone.

Re: Why I’m betting my retirement on Facebook stock today

#26

Post by debacle »

galenward wrote: post #11
debacle wrote: post #2

Google's pageviews have more value (because they know exactly what people are looking for), Google IPOed at a valuation of 20% of what Facebook wanted in valuation, and Google is already entrenched into the market that the author is suggesting Facebook is going to have such an easy time moving into. My money is on Google.

Sure, 20% of Facebook's valuation but also 1/2 of Facebook's revenues. Facebook still has a lot to prove, but they also have a lot more opportunity to improve.

> but they also have a lot more opportunity to improve.

What's your case for that? They have almost a billion users. How many more are they going to get, and are users outside of the US and Europe (and a few scattered nations) of any value to Facebook at all?

Re: Why I’m betting my retirement on Facebook stock today

#28

Post by dpearce »

tworats wrote: post #16
galenward wrote: post #10

Earlier quoted context omitted.

Adsense is a $10b a year segment not based on intent - it's based on advertising you see when you are on random pages on the internet (like the New York Times). Facebook will know what you want better than Google: they track you across multiple retail sites, see what you are looking at and even get structured data volunteered to them about that stuff.

I think you're making my argument for me: if anyone has stats on the total number of adsense ads served vs adwords ads served, we can derive the value of adsense vs adwords ads. There are many more adsense ads displayed than adwords - it's google searches vs. most of the rest of the web. Yet it only makes up 1/4 of google's revenue. Last I checked there was an order of magnitude difference between the value of an adw…

1/4 of Google's revenue is a pretty big deal. The author is suggesting that's the worst case scenario for Facebook, that they take over that $10B in revenue from Google. Add that to whatever they can do with Facebook Credits (with acquisitions like Karma), and their future looks bright.

Re: Why I’m betting my retirement on Facebook stock today

#29

Post by [deleted] »

vibrunazo wrote: post #12
tworats wrote: post #3

I hope he's not actually putting his retirement money on the line here. It's not about the quality of the ads, which he argues will get better with more data. It's about intent. When I search on Google, my natural next action is to click a link. That link can be organic or an ad. If it's an ad Google stands to make money. When I browse Facebook, my natural next action is not to click a link to an outside service/stor…

I just checked and Facebook gives you the option to buy ads per click, around $0.25 per click in my category. So why does it even matter if it has a low CTR? If the user didn't click, you didn't pay for it anyway. If the user does click, well there's your intent. From my point of view as an advertiser, how is the CTR even relevant? Why do I care if google has 1% CTR and Facebook has 0,1%? If you assume both has the s…

[deleted]

Re: Why I’m betting my retirement on Facebook stock today

#30

Post by jack-r-abbit »

galenward wrote: post #10
tworats wrote: post #3

I hope he's not actually putting his retirement money on the line here. It's not about the quality of the ads, which he argues will get better with more data. It's about intent. When I search on Google, my natural next action is to click a link. That link can be organic or an ad. If it's an ad Google stands to make money. When I browse Facebook, my natural next action is not to click a link to an outside service/stor…

Adsense is a $10b a year segment not based on intent - it's based on advertising you see when you are on random pages on the internet (like the New York Times). Facebook will know what you want better than Google: they track you across multiple retail sites, see what you are looking at and even get structured data volunteered to them about that stuff.

But timing can be important. Facebook may know that I have "Liked" someone's post related to hamburgers/milkshakes... but serving me a McDonalds ad when I'm reading my news feed may not be as effective as serving me one when I've just searched online for something related to hamburgers or milkshakes or viewing a food blog or something along those lines.
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