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SOCIAL MEDIA
IS
BIG BUSINESS
Ben Rubenstein
Tufts University EXP-50
BIG QUESTIONS
How does social media make money?
What drives the value of social media for users? For
advertisers? For inve...
HOW MUCH IS SOCIAL MEDIA
WORTH? (JUNE 2015 EDITION)
HYPE OR HOPE?
HYPE OR HOPE?
2009:
$250
million
valuation
April 2010:
$1.35
billion
valuation
Nov 2010: Rejects $6
billion Google offer
N...
HYPE OR HOPE?
Nov 2013: Rejects $3
billion Facebook offer
May 2015: $16
billion valuation
Apr 2012: $4.25 million
valuatio...
HYPE OR HOPE?
2015: $21 billion
valuation?
2013: $1.5 billion
valuation
2014: Acquired by
Facebook for $19 billion
Would you invest
in social media?
BUSINESS MODELS
Advertising
Virtual Goods
Freemium
Subscription
ADVERTISING
VIRTUAL GOODS
FREEMIUM
SUBSCRIPTION (PREMIUM)
Would you pay for
Facebook? (or
Instagram)
““If you’re not paying for the
product, you are the product.”
Anonymous internet pundit
“
USER VALUE: DATA
DATA MINING + SOCIAL LISTENING
USER VALUE: CONTENT
Instagram: “A non-exclusive, fully paid and royalty-free,
transferable, sub-licensable,worldwide licen...
Nope.
ADVERTISING +
THE INTERNET
TENSIONS
Business
Objectives
User
Experience
ORIGIN STORY
Advertising became dominant because:
- Easy to implement
- Easy to sell to investors (‘investor storytime’)
-...
THE AD-SUPPORTED WEB
PROS:
‘Free’ content
Personalization
Openness
CONS:
Tracking
Centralization
Clickbait
Filter bubbles
ESCAPE HATCHES
ESCAPE HATCHES
ESCAPE HATCHES
WHY AM I SEEING THESE ADS?
WHY AM I SEEING THESE ADS?
WHY AM I SEEING THESE ADS?
WHY AM I SEEING THESE ADS?
WHY AM I SEEING THESE ADS?
RETARGETING
““Facebook has collected the most
extensive data set ever assembled
on human social behavior.”
Targeting
Targeting
Targeting
Targeting
Targeting
Social Media Is Big Business
Social Media Is Big Business
Social Media Is Big Business
Social Media Is Big Business
Social Media Is Big Business
Social Media Is Big Business
Social Media Is Big Business
Social Media Is Big Business
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An examination of the social media economy. Lecture from Tufts University EXP-50, Social Media: Participatory Culture and Content Creation

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Social Media Is Big Business

  1. SOCIAL MEDIA IS BIG BUSINESS Ben Rubenstein Tufts University EXP-50
  2. BIG QUESTIONS How does social media make money? What drives the value of social media for users? For advertisers? For investors? What risks and challenges should we be aware of? What’s the outlook for the social media economy (and related economies)?
  3. HOW MUCH IS SOCIAL MEDIA WORTH? (JUNE 2015 EDITION)
  4. HYPE OR HOPE?
  5. HYPE OR HOPE? 2009: $250 million valuation April 2010: $1.35 billion valuation Nov 2010: Rejects $6 billion Google offer Nov 2011: $12.8 billion valuation 2012: $5.8 billion valuation 2015: $5 billion valuation
  6. HYPE OR HOPE? Nov 2013: Rejects $3 billion Facebook offer May 2015: $16 billion valuation Apr 2012: $4.25 million valuation Apr 2013: $800 million valuation
  7. HYPE OR HOPE? 2015: $21 billion valuation? 2013: $1.5 billion valuation 2014: Acquired by Facebook for $19 billion
  8. Would you invest in social media?
  9. BUSINESS MODELS Advertising Virtual Goods Freemium Subscription
  10. ADVERTISING
  11. VIRTUAL GOODS
  12. FREEMIUM
  13. SUBSCRIPTION (PREMIUM)
  14. Would you pay for Facebook? (or Instagram)
  15. ““If you’re not paying for the product, you are the product.” Anonymous internet pundit
  16. USER VALUE: DATA
  17. DATA MINING + SOCIAL LISTENING
  18. USER VALUE: CONTENT Instagram: “A non-exclusive, fully paid and royalty-free, transferable, sub-licensable,worldwide license “ LinkedIn: “copy, prepare derivative works of, improve, distribute, publish, remove, retain, add, process, analyze, use and commercialise, in any way known or in the future discovered…” Facebook: “...does not end upon the deactivation or deletion of a user’s account, content is only released from this license once all other users that have interacted with the content have also broken their ties with it”
  19. Nope.
  20. ADVERTISING + THE INTERNET
  21. TENSIONS Business Objectives User Experience
  22. ORIGIN STORY Advertising became dominant because: - Easy to implement - Easy to sell to investors (‘investor storytime’) - Attention is everything (vs. print ads) “The primary benefit of online advertising is the ability to see who’s looking at an ad.”
  23. THE AD-SUPPORTED WEB PROS: ‘Free’ content Personalization Openness CONS: Tracking Centralization Clickbait Filter bubbles
  24. ESCAPE HATCHES
  25. ESCAPE HATCHES
  26. ESCAPE HATCHES
  27. WHY AM I SEEING THESE ADS?
  28. WHY AM I SEEING THESE ADS?
  29. WHY AM I SEEING THESE ADS?
  30. WHY AM I SEEING THESE ADS?
  31. WHY AM I SEEING THESE ADS?
  32. RETARGETING
  33. ““Facebook has collected the most extensive data set ever assembled on human social behavior.”
  34. Targeting
  35. Targeting
  36. Targeting
  37. Targeting
  38. Targeting
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An examination of the social media economy. Lecture from Tufts University EXP-50, Social Media: Participatory Culture and Content Creation

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