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Facebook Back of the Envelope Calculation I

7 points by epi0Bauqu 19y ago

nuggien 19y ago
If I wanted to advertise something online, there's no way in hell I'll pay for views. I'd only pay if someone clicked through to my site/service.
- epi0Bauqu 19y ago
  Understood. Me too. But we're not Ford, or <insert huge consumer company here>. Those companies are often paying for brand awareness on TV. They might be satisfied with (and might actually have the goal of) trying to get the average FB college student to buy a Ford five years from now when they buy their first car. And in that case, they don't really care about clicks now.
gibsonf1 19y ago
Did the calculation account for the fact that there are only about 6 minutes of ádvertising every hour? (Off by a factor of 10) The calculations then would more accurately be: $0.750M/30sec * 60sec/min * 6 min/hr = $9M/hr At 30M viewers, that is around $0.30/hr per viewer. If we put that together we get: $.30/hr * 33hr/year ~ $10/year per user. And then with $30M users, we get our answer: $300M/year.
- epi0Bauqu 19y ago
  On FB the advertising runs all the time, which is why you expand it to the full hour. The brand awareness banner ads can just sit on the side all the time.
  - sadiq 19y ago
    Isn't that apples to oranges then? If we used the full time then we'd be comparing a modal form of advertising, the commercial break ad (which takes control of the channel) to a passive concurrent advertising akin to a translucent logo in the corner of a TV show. I'd wager both those things are worth different quantities. Now if Facebook used click-through modal advertising, that'd be a different kitten.
    - epi0Bauqu 19y ago
      I agree they aren't clearly equivalent things. But where they come down in value is also unclear. That is, I wouldn't say out of hand they were orders of magnitude different. One example. Suppose it turns out that if you are exposed to a certain type of ad for 20 min, it really has an effect. (A bigger and possibly more interactive ad than a translucent logo.) You could get that on FB, but it would be harder to get that on the TV. Also, there are things like people often get up during the TV, talk during TV commercials, etc. And FB ads could be more interesting than the translucent logo because of programming abilities and more screen resolution. I think a more equivalent comparison might be some form of yet-to-come interactive TV. Hey, maybe we'll get that on FB.
zkinion 19y ago
American Idol mainstream tv advertising != Facebook
- epi0Bauqu 19y ago
  Why not?
epi0Bauqu 19y ago
FYI (as promised in the post), the second back of the envelope calculation thread is here: http://news.ycombinator.com/item?id=161810 http://news.ycombinator.com/item?id=161810

7 points by epi0Bauqu 19y ago

If I wanted to advertise something online, there's no way in hell I'll pay for views. I'd only pay if someone clicked through to my site/service.

epi0Bauqu 19y ago
Understood. Me too. But we're not Ford, or <insert huge consumer company here>. Those companies are often paying for brand awareness on TV. They might be satisfied with (and might actually have the goal of) trying to get the average FB college student to buy a Ford five years from now when they buy their first car. And in that case, they don't really care about clicks now.

gibsonf1 19y ago

Did the calculation account for the fact that there are only about 6 minutes of ádvertising every hour? (Off by a factor of 10) The calculations then would more accurately be: $0.750M/30sec * 60sec/min * 6 min/hr = $9M/hr At 30M viewers, that is around $0.30/hr per viewer. If we put that together we get: $.30/hr * 33hr/year ~ $10/year per user. And then with $30M users, we get our answer: $300M/year.

epi0Bauqu 19y ago
On FB the advertising runs all the time, which is why you expand it to the full hour. The brand awareness banner ads can just sit on the side all the time.
- sadiq 19y ago
  Isn't that apples to oranges then? If we used the full time then we'd be comparing a modal form of advertising, the commercial break ad (which takes control of the channel) to a passive concurrent advertising akin to a translucent logo in the corner of a TV show. I'd wager both those things are worth different quantities. Now if Facebook used click-through modal advertising, that'd be a different kitten.
  - epi0Bauqu 19y ago
    I agree they aren't clearly equivalent things. But where they come down in value is also unclear. That is, I wouldn't say out of hand they were orders of magnitude different. One example. Suppose it turns out that if you are exposed to a certain type of ad for 20 min, it really has an effect. (A bigger and possibly more interactive ad than a translucent logo.) You could get that on FB, but it would be harder to get that on the TV. Also, there are things like people often get up during the TV, talk during TV commercials, etc. And FB ads could be more interesting than the translucent logo because of programming abilities and more screen resolution. I think a more equivalent comparison might be some form of yet-to-come interactive TV. Hey, maybe we'll get that on FB.

zkinion 19y ago

American Idol mainstream tv advertising != Facebook

epi0Bauqu 19y ago
Why not?

epi0Bauqu 19y ago

FYI (as promised in the post), the second back of the envelope calculation thread is here: http://news.ycombinator.com/item?id=161810 http://news.ycombinator.com/item?id=161810