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Twisted Toast Digital (Pty) Ltd

The two Facebooks

How Facebook is changing advertising forever

By Louis Eksteen

Facebook is now rapidly morphing into a two-headed beast. The reason is its intended initial public offering (IPO), a stock exchange listing that will happen this year. The company says it “expects to start filing public financial reports no later than April 30, 2012”. 

The first, familiar Facebook is the ubiquitous social network site where users post own, personal content, from mid-December last year in cleverly constructed timelines

The second face of Facebook is what current and future shareholders are salivating about. This is the commercial side of the social behemoth that brings in cash through advertising. As a stark reminder to conventional media companies that they now live in a brave new media world, Facebook is quickly gearing up to generate a truly massive advertising income stream. All without actually producing any of its own content.

This kind of advertising money used to only go to traditional media companies. Thank goodness South African media giant Naspers owns a small but valuable indirect stake in Facebook through its subsidiary company MIH Russia Internet BV, via Russian super internet investor Yuri Milner’s Mail.ru Group, in which Naspers owns about 30%. Mail.ru Group in turn owns in the region of 2.5% of Facebook. (Milner’s other internet investment company Digital Sky Technologies owns around 8% of Facebook.)

Facebook said at the end of 2011 that certain advertisements, what it calls “sponsored stories” will start appearing in users’ news feeds, not only in the traditional ad boxes listed on the right hand side of the site. How they intend doing this in a way that works for both users and advertisers remains to be seen. (Facebook used to run three ad boxes on the right, now they run six, plus other placements within picture displays. They have also selectively introduced high-value expanded “premium” advertising options, through their own and third-party direct sales agents.)

The major trend that will make traditional media owners frown, is this commercialisation of content directly (the Facebook news feed and therefore, possibly, its timeline). In old world media such as newspapers, magazines and the non-social web, advertising and content don’t mix well. But if Facebook’s way of monetising content streams works (relevancy is key), with buy-in from both users and advertisers, it will give a significant boost to its ad revenue.

The blatantly commercial side of Facebook is relatively unknown outside its current advertiser base, but this is likely to change dramatically as commercialisation is boosted by the demands of a public listing.

The killer advertising sales tool Facebook has that traditional media (and Google) don’t have, is that they know exactly who you are. "Birthday coming up in less than a week? Great advertising prospect. Engaged to be married? We can serve you just the right ad at just the right time. Your buddy loves Brand X, you might too and here’s why."

Facebook sits on the world’s most valuable advertising database, updated in real time. They’re about to unleash its power.
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Twisted Toast's focus for 2012

It’s a new year, and with it, a slew of new challenges for Twisted Toast Digital. Check out our take on what we're expecting for 2012.
Kim Browne, CEO

Musings from Kim, our CEO

Hello 2012!

Running your own business (I use the term “own” loosely 
— as in our case we’re a team of four), is in my limited experience of 10 months very much like running a marathon  as part of a team.

This month I was fortunate enough to take part in the 70.3 Ironman in East London as the runner in a team of three. By now I’ve done many 21.1km races, but I can honestly say I have never felt as pressurised to do well as I did for this race. Why? Because the other two members of our team were relying on me to deliver a sub two-hour run. We achieved our target and had an enormous amount of fun doing it  there where fantastic highlights and some tough moments. In the end, asked whether I’d do it again, there was no hesitation in my answer: YES! The journey made it all worthwhile.

At Twisted Toast life is like one long, never-ending Ironman, including the training, injuries, frustrations and elation. We too have, as a team, set targets and when we manage to smash them, the feeling is incredible. Things don’t always go our way though and an interesting learning for us has been the massive slowdown in the industry over December/January.

As an active band of four, we push each other, troll each other, love each other and need a holiday from each other, sometimes all in one day!

But in the end, our clients get the very best from us as we all have a unique set of skills that together create passion and magic, reflected in the work we produce.

As February rolls in, we’re again hectically busy getting jobs out. Training is going well and there are no injuries to report. Our immediate goal remains 12 clients for 2012, watch this space :)


 
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