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Facebook is cozying up to small businesses in a big way with a new program that gives away $10 million in free advertising.

Facebook-Fit-small-business

The program, Facebook Marketing Solutions, which includes a partnership with the National Federation of Independent Business and the U.S. Chamber of Commerce, will roll out over the next few months. In early 2012, Facebook will give each qualified business at least $50 of free advertising on Facebook.

The social network also promises free resources and information on how to market your business on Facebook. The company is sending its reps out to meet with small business owners in person. Since Facebook has a self-service ad platform that’s actually geared more to small advertisers than large ones, the program seems to be about building awareness, especially since 64% of small businesses think social media is unnecessary. The company took a similar approach to wooing the advertising industry in April with Facebook Studio, which also offers free resources, though there’s no free advertising component. [ Continue Reading… ]

4 Ways the New Twitter Is Taking on FacebookTwitter’s native video- and photo-sharing features may have hinted at its desire to go after Facebook, but the redesign it launched on Thursdaystated them loud and clear.

Twitter now looks a lot more like the world’s largest social network, with features that focus on social interaction and brand pages.

Twitter once differentiated itself as an “information network” while Facebook defined itself as the “social graph.” But just as Facebook added real-time features that make it look more like Twitter, Twitter has inched into its competitor’s turf.

In June, Twitter’s video and photo-sharing tools positioned the network to increase engagement by breaking the mold of its 140-character tweets. Meanwhile, a new “Activity Feed” was added in August to keep track of followers’ interactions with other Twitter users, and later that month it added photo galleries to every user’s profiles — it’s first step toward establishing profile pages that are more than just an aggregation of tweets.

The new public-facing Twitter profile page is not another step toward that goal, it’s a giant leap. In the company’s own communications-department-approved words, the new profile “puts you and your interests front and center.” It wants to be “your opportunity to introduce yourself to the world” and “stay close to everything you care about.” All of these objectives encroach upon Facebook’s territory.

These four new features in particular challenge Facebook’s reign as the default social site for managing online identity, keeping up with friend-recommended (and created) content and serving as brands’ social media hub.

If you’re trying to understand why Facebookelicits such an emotional response, look no further than the name.

A study commissioned by Facebook examined how consumers’ brains responded to the site as well as to Yahoo’s and The New York Times‘s homepages. NeuroFocus, the Berkeley, Calif., firm that executed the study, found that of the three, Facebook scored highest on attention, emotional engagement and memory retention. [ Continue Reading… ]

According to recently released figures from eMarketer, Facebook‘s revenue for advertising alone — which excludes revenue for virtual currencies and other sources — came to an astonishing $1.86 billion for all of last year. Not bad for a web startup that’s yet to see its seventh birthday.

As we reported last month, Facebook was on track to reach the $2 billion mark for revenue in 2010. When other revenue streams are counted along with ad revenue, it’s easy to imagine that the $2 billion revenue was achieved and possibly exceeded in the past year.

As users spend more and more on Facebook Credits, which got an extensive roll-out through online and brick-and-mortar retailers throughout 2010, the virtual currency is likely accounting for an increasing amount on Facebook’s balance sheets. After all, Facebook collects around 33 cents on the dollar for Credits spent within the Facebook ecosystem of apps and games — games that grow more popular with each iteration.

As for the ads, Facebook’s serving more than 50 billion display ads per month and was on track to serve 1 trillion display ads for the year.

The 3 Most Effective Approaches to In-App Advertising A widely discussed article in Wired last summer posited the idea that the web is dead. The argument, which, on closer inspection appeared based on semantics, predicted that consumers would experience the web via peer-to-peer networks like Facebookand, increasingly, apps, in the future.

If that proves to be the case, a dead web may be good for advertising.

The reason? Aside from search, advertising on the web has been tricky. Consumers generally don’t click on banner ads — especially not on Facebook — and tend to view ads as an intrusion on their web-browsing experience. In contrast, a recent report by Appssavvy (admittedly not a disinterested observer) found that in-app ads perform 11.4 times better than standard banner ads, which means they are almost as effective as search.

That said, app publishers have been working on tweaking the “appvertising” model to make it more effective. Below is an overview of what seems to be working.

1. Become Part of the Game

Advertising in games is nothing new, but the the old model revolved mostly around product placement. But, as is the case with the TV and movie version of product placement, advertisers learned that having a Coke can in the background of a scene isn’t likely to sell many Cokes, but having a character drink it in a key moment — especially when the character is really thirsty and that Coke looks so good — is another story. When it comes to in-app games, the thirst-quenching Coke’s equivalent is having a brand pop up in a way that enhances the game experience.

For instance, last year, Microsoft ran a program with Appssavvy for Windows 7 in nqmoco’s GodFinger All-Stars. In that game, players control their own planet. The aim is to expand the planet and earn money, among other things, to get to the next level. So, Appssavvy, working with Universal McCann, brought a Windows Cloud into the game. Players could visit the Cloud the same way they’d visit their friends’ planets and earn in-game currency for doing so. If they wanted to, they could also click through a mobile landing page and learn more about Windows 7. “It leveraged activity [users] were already doing,” says Michael Burke, co-founder of Appssavvy. “They don’t mind the advertising.” Well, at least an impressively large minority didn’t — during the six-week promotion, 10% of the game’s players visited the Windows Cloud for a total of 6.1 million visits.

2. Bribery

Another approach is to forget about blending into the game and instead ask players to sit through an ad in exchange for virtual game currency. That’s the premise behind SocialVibe. In a recent campaign, for instance, SocialVibe gave away currency for Zynga’s various games if users visited The Big Game Tournament,  which pitted characters from FarmVille, YoVille, FrontierVille and others in a football game sponsored by Kia. The effort had the highest time-spent-per-user of any SocialVibe game to date — 170 seconds.

Does bribing consumers to watch a commercial really work though? Clearly, some investors think so — SocialVibe just got a $20 million infusion of cash from Norwest Venture Partners last month. And a new company, Kiip, has a twist on this idea. Instead of virtual currency, they get real prizes. For example, if a player reaches a new height record in Doodle Jump, a Kiip notification will let the player know they’ve won a prize. Then a user can enter his email address to redeem the prize. Kiip has a roster of brand partners including Dr Pepper, Carl’s Jr., Popchips and GNC.

3. Make Better Ads

Not everyone thinks you have to twist consumers’ arms to get them to look at ads. Many believe that the rise of apps — especially among mobile users — will usher in a new era of more engaging advertising. Chief among the proponents of this belief is Apple’s Steve Jobs, who introduced Apple’s iAd platform in April 2010 as “mobile ads with emotion.” For Apple, though, the platform hasn’t been entirely successful. The company recently cut the entry price for an iAd in half to $500,000 and has reportedly had trouble selling the ads.

But Garrick Schmitt, managing director of experience and platform at Razorfish, says that rich media ads within apps perform much better than standard display ads — though he declines to get specific. Apple, he says, is just reacting to competition. Ads that Razorfish creates on behalf of clients like Best Buy and Westin Hotels are meant to offer more utility — you might say they’re more app-like — than the typical banner ad.

Google which long ago passed Yahooin search advertising, now has overtaken the company in display ads as well, according to IDC.

Google claimed the number-one spot in U.S. display advertising in the first quarter, with 14.7% of the market ($396 million), up from 13.3% in Q4 2010. Yahoo’s hold on the market declined from 13.6% to 12.3%, or $330 million, in that same period.

Facebook, meanwhile, had 8.8% of the display market, or $238 million. Karsten Weide, IDC vice president and the author of the report, says he expects Facebook‘s share to overtake Yahoo’s in the third or fourth quarter.

Weide says the latest numbers reflect Google’s strength rather than Yahoo’s weakness. “They have a huge search network,” Weide says, “And anything you offer based on that is likely to work well.”

Google got into the display ad arena in earnest in September 2009, after its acquisition of DoubleClick. Since then, the business has grown rapidly and is now estimated to be worth $2.5 billion a year, including YouTube.

Other findings of the IDC report:

  • Global online ad spending grew 14.3% to $18.2 billion in the first quarter.
  • U.S. spending was up 14.2% to $8.1 billion.
  • For the ninth quarter in a row, display is growing faster than search advertising. Display’s share is now at 33.3% vs. 29% two years ago.
  • Google’s share of search advertising rose to 59.6% (vs. 59.1% in Q4 2010). Microsoft’s share was 7.9%. Yahoo’s was 7%.

Just like the IAB’s first-quarter online advertising estimates, released on Thursday, IDC’s reports shows quarterly ad revenues at a new record.

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