There's A Major Flaw In Zynga's Plan To Fix Itself

Zynga has a plan to fix itself that involves becoming a more mobile-focused company and putting more resources behind the "With Friends" brand.
It has no choice but to figure out mobile. Zynga's mobile users are growing three times faster than its web users. Meanwhile, Zynga's Facebook users have dropped 16% from last year to Q2 this year.
But creating more "with friends" branded games might not be the smartest strategy. Zynga has only ever had one real success in that category, Words with Friends. The rest of its attempts have gone bust.

Words With Friends currently has about 5.7 million daily active users (DAUs), according to AppData. But every social game it has launched since, Hanging with Friends, Scramble with Friends and Matching with Friends, have petered out.
"None of those games are or have been successful," a source close to the company says. "Scramble DAU is down almost 50% over several months and Matching With Friends couldn't hold on to #1 spot for more than two days."

Zynga has tried replicating its smash hits before without much luck. Farmville, which first put the gaming company on the map, has led to a slew of other "ville" attempts, like Castleville, Cityville, YoVille, PetVille and FishVille. Most have not been able to attract the same user-base as Farmville.
"The 'With Friends' network is the same strategy as ville games," says the source "Pick a franchise that has one hit and double down on the franchise as each game performs worse and worse."
What should really have Zynga concerned, and has gone unsaid by the Journal, and others, is that Zynga has never built its own successful mobile game. It bought Words with Friends. It bought Farmville. It bought Draw Something, which was a successful mobile game.
Even if it doubles down on a semi-successful brand, it doesn't necessarily mean it's going to be able to build a successful mobile game.

Photos Increase Facebook Reach, But Does It Drive Traffic?

Photos are said to improve engagement on Facebook, but does that engagement in turn boost traffic or fans? No, our testing found — but there still might be value in using them.
Ever since Facebook started displaying Reach data directly on Facebook fan pages, here at Marketing Land and Search Engine Land we have been diligently watching the fluctuations happen day-to-day.  Knowing that using photos is a sure way to attract a more engaged audience, we started to deliberately manually post more photos on Facebook, and not via our third-party tool. We spent about a week posting photos with links in the caption where it made sense – after all, we’re publishers, and our goal is to drive traffic to our sites.

Photo Posts vs. Link Posts Performance

When we compared photo posts to link posts in a 30-day period in PageLever, one of the many tools we use, we realized immediate results:

• 4x engaged users per post
• 4x the amount of shares
• 4x more consumption
• 4x as many shares
• Twice as many likes
• 2.5x more virality

Great news, right? Concrete actions with concrete results. Lots of visibility, lots of engagement. With more visibility, you can make the assumption that site traffic and followers would see the benefit.

No Big Increase In Fan Growth

From the chart below you can see a bit of a peak in growth the week of July 9, which is when we started posting photos with links. But the Removed Fans metric also increased at that time, so it’s safe to say that there really hasn’t been any impact on Fan growth.

How Was The Traffic?

As you can see below, despite the social success, there was not much to write home about.

Marketing Land Facebook Campaign Traffic

Search Engine Land Facebook Campaign Traffic

Since there didn’t seem to be a blip anywhere on either site, I looked at the top five photo posts and the top five link posts with most reach. I did the same with Search Engine Land. Then I grabbed the top ten Facebook posts from each site that drove the most traffic. What I discovered was this:

• For Marketing Land, six out of the ten top traffic-driving posts were links, not photos.
• For Search Engine Land, seven out of the ten top traffic-driving posts were links, not photos.

But does this mean the efforts were unsuccessful? Brands and businesses everywhere have struggled defining the value of content broadcasted across the social space. Just a few months ago I wrote a post asking the same questions, only using Pinterest as an example. On Facebook we know people are seeing our content, the Insight metrics show that. So I repeat the question, is there a value if it’s not driving traffic or audience?
Absolutely. Content consumption happens everywhere, and publishers need to be ready to have their content read and distributed outside of the confines of their site. And the broader audience, the better. Does it really matter whether your brand engages with you on your turf, or on a site they spend time on? And as you already likely know, the SEO benefits of social activity is there, and in light of all of the link building confusion happening these days, building a reliable, honest social presence will likely benefit long-term.

Two More Facebook Execs Are Leaving

Facebook Inc.

Katie Mitic and Ethan Beard are leaving Facebook.

Ethan Beard, Facebook's director of platform partnerships, and Katie Mitic, the company's director of partnership marketing, are both leaving the company.
As the dust from Facebook's IPO settles and the company reorganizes its management ranks, it's no surprise that some executives are leaving.
But both departures leave us feeling like Facebook is having trouble holding onto the talent it needs to become a hypergrowth story once again.
Beard, a former Google executive, stabilized Facebook's platform efforts after a period of political infighting and management confusion in 2008. The platform, which third-party developers use to connect their software to Facebook's social network, is now a key part of Facebook's ubiquity and still offers the company a lot of potential for new business opportunities.
Mitic, a former eBay and Palm executive, is a member of eBay's board of directors—an unusually high-profile perch for an executive at her organizational rank—and helped spearhead a partnership between Facebook and eBay.
Facebook's spin on these departures is that the company is better off for being able to attract entrepreneurial talent, even if they don't stay for a long time.
But if Facebook is going to grow like a startup, seems like it would be better just to keep its entrepreneurs in-house.
Beard and Mitic are both worth watching, whatever they do next.

Facebook Is Running Out Of Time To Figure Out Its Mobile Advertising Strategy

Facebook users are increasingly abandoning the desktop version of the social network in favor of the mobile version, the company revealed in its latest 10-Q filing.
About 102 million users accessed Facebook solely through mobile devices in June, a whopping 23% increase from the number who did so in March, according to a telling stat in the 10-Q filing first spotted by TechCrunch.
To put that in perspective, this means nearly a fifth of Facebook's 543 million monthly active users now access the social network exclusively through mobile apps or a mobile browser.
This proves yet again that mobile is Facebook's future, and it only increases the urgency for the company to figure out its mobile advertising strategy. Facebook's mobile ads do have a click-through rate that is reportedly as much as 15 times greater than on the desktop, but as TechCrunch points out, Facebook can only place a small fraction of the ads on the mobile page that it does on the desktop page.

Mark Zuckerberg's Sister Arielle Now Works For Google

Google's acquisition of Wildfire Interactive, one of Facebook's top marketing partners, is awkward for the social network on a business level.
But it's even more awkward on a personal level.
That's because one of Facebook CEO Mark Zuckerberg's sister, Arielle, works for Wildfire as a junior product manager.
So she's soon going to be a Google employee, working to undermine her brother's dominance in the social sphere.
We hear Mark tried to get Arielle to join Facebook. Unlike their older sister Randi, who succumbed to Mark's entreaties and ran consumer marketing for Facebook for years before recently striking out on her own, Arielle decided to set an independent course from the get-go.
She's spoken out on her blog about Facebook's recent design changes.
And she's also active on Quora, the question-and-answer site started by some ex-Facebookers. One of the questions she answered: "Which startups would be good acquisitions for Facebook?"

Facebook Is Getting Crushed -- Down 4%

Facebook can't buy a break.
The stock is off 4% this morning after it got a mixed report from Bernstein analyst Carlos Kirjner.
Kirjner raised his rating on Facebook to Market Perform from Underperform, reports Eric Savitz at Forbes. He has a $23 price target on the stock.
While that all sounds good, he also basically tells investors he only thinks the stock is really worth $19. The other $4 is what Facebook might do some day that will be awesome:

“We believe that  Facebook is worth $19/share (10 times estimated 2014 EBITDA plus cash) valued just as a display advertising business gaining market share due to its fundamental competitive advantages based on scale, user data and identity ... These $19/share do not assume upside from its social advertising capabilities and do not give Facebook any credit for upside from yet-to-be-defined businesses based on its distinctive assets, such as its social graph. Because these ‘upside’ opportunities are still highly uncertain, we value them at $4/share based on our sizing of such upside opportunities and our judgment of the probabilities they will come through, leading us to our $23/share valuation."

His note only gets more negative from there:

"The decline in European CPMs [in the June quarter], attributed by management to poor macro environment, suggests that Internet advertisers in Europe are not yet convinced of Facebook’s high ROI ... The fact that Facebook’s revenue trajectory and key metrics are already affected this heavily and this early by external drivers such as seasonality and macro give us pause. To us, this suggests that either the ROI on Facebook  advertising is just not that attractive, or the company has a long and arduous path to making it transparent to advertisers."

And finally ...

"As it has been well known, over 211 million shares will be added to Facebook’s current float of 484 million shares in August, an increase of nearly 40%, up to 355 million shares will be added to the float in October (an 73% increase versus the current float), and 1,339 million in November (an 276% increase compared to the current float)... While these are well known facts and should (in theory) be already reflected in the stock price, history suggests that there is a good chance of transient pressure on the stock price as liquidity increases abruptly. We would see a buying opportunity if FB were to trade around or below $19/share."

Microsoft adds Facebook-friend tagging to Bing searches

Bing now lets you tag your Facebook friends while searching so you can ask directly about queries.
Microsoft has added yet another Facebook feature to its Bing search engine. Now you can tag up to five of your Facebook friends by typing their name in the sidebar on the right when sharing a search, in the hopes that they will give you input on your query.

Assuming you've given Bing permission to access your Facebook account, the question will be automatically posted on your Facebook Timeline. At the same time, your tagged Facebook friends will get a notification so that they can help you find what you're looking for.

Microsoft gives three example scenarios where this could be useful: asking your travel guru friend for help planning a summer vacation, a "foodie" who can lend some suggestions for your next backyard barbecue, and just your general Facebook friends who may want to join you after you find some great hiking trails. For a more visual explanation, Microsoft put together this video:

Facebook's First Earning Report Is Respectable: $1.18 Billion Quarterly Revenue, 955 Million Total Users

NEW YORK (AP) — Facebook is reporting stronger-than-expected revenue in the social media company's first earnings report since its rocky initial public offering two months ago.
But investors weren't impressed and after a brief spike, its stock tumbled nearly 9 percent in after-hours trading.
Facebook Inc. said Thursday that it booked a net loss of $157 million, or 8 cents per share in the April-June period, mainly due to stock compensation expenses following its IPO. That compares with earnings of $240 million, or 11 cents per share, in the second quarter a year ago.
Revenue grew 32 percent to $1.18 billion from $895 million a year ago.
Adjusted earnings of $295 million, or 12 cents per share, matched Wall Street's expectations.
Analysts, on average had expected slightly lower revenue of $1.16 billion, according to FactSet.
The results come two months after Facebook's stock landed with a thud on its first trading day, on May 18. The day began with glitches with the Nasdaq stock market that delayed trading by half an hour. It didn't get much better from there. Despite months of hoopla that had investors thinking it would soar, the stock closed just 23 cents above its $38 IPO price. It has not reached that level since then.
Though as its first public report, Facebook had a lot riding on this quarter, Wall Street's expectations were muted, which could be a reason for the stock price decline.
Facebook had effectively warned investors before its IPO that Wall Street's expectations were too high. In a filing issued a week before its IPO, Facebook said its mobile users are growing at a faster pace than the number of ads on its mobile platform.
Analysts took that as a sign that their estimates were out of whack and many of them reduced their estimates for Facebook's projected revenue and earnings.
That said, Facebook didn't start showing ads on its mobile app until this spring. While it's true that it was late to the game — after all, its mobile user base is growing fast — it doesn't mean it won't be able to in the future.
Overall, Facebook said its revenue from advertising totaled $992 million, representing 84 percent of total revenue and a 28 percent increase from the same quarter last year. It did not say what percentage was from mobile.
Facebook said it had 955 million active monthly users as of June 30, up 29 percent from a year earlier.
Facebook's stock fell $2.38, or 8.9 percent to $24.47 in after-hours trading.