The COMRADITY Journal

Splitting Hairs

An article on a non-profit marketing blog, www.frogloop.com, entitled: "New Study: Facebook Hashtags Decrease Engagement" demonstrates how accepting internet marketing experts are of low performance.

As background, hashtags, for example #fishbait, are used in social media to drive traffic to a post.  Hashtags are to Social Media what keywords are to Search.  The more popular the keyword, the more valuable it is to search, the more popular the hashtag, the more valuable it is on Social Media. 

The headline suggests we're going to see significant engagement and a statistically significant decline in engagment with #hashtags.   

For example, I'd expect that a fishing "community" Facebook Page using the hashtag, #fishbait, would see a significant number of its Fans clicking on the post - i.e. engaging.  But the article reports: "the study showed that not even the Facebook Pages with the largest audiences were benefiting from hashtags."  

But doesn't the accompanying chart tell a very different story?  Since the top engagement rate on the chart is 0.05% shouldn't the conculsion be: THERE IS NO SIGNIFICANT ENGAGEMENT ON FACEBOOK PAGES . . . EVEN AMONG FANS.

 

I mean really.  0.05%.  I guess Sheryl Sandberg has to "Lean In" to tell a story about these results.

 

 

The New Business Model: Passive Aggressive

GOOGLE will do no evil.  FACEBOOK is making the world open and connected.  So when financial results reveal these companies are making their founders and management among the richest people in the world, everyone thinks their good intentions have been rewarded.

But press in just the last 24 hours reveals these mission statements mask aggressive, even criminal behavior.  GOOGLE is setting aside $500 Million to settle a complaint by the Department of Justice which “. . . would rank high among the criminal or civil penalties paid by companies in disputes with the U.S. government.”  FACEBOOK "inadvertantly" (ed. :}) shares individual data with advertisers. And FACEBOOK was disclosed as the secret client behind Burston Marstellar’s whisper campaign against GOOGLE. “Confronted with evidence, a Facebook spokesman last night confirmed that Facebook hired Burson” .

Why do these businesses act in such a two-faced way?  Because both companies are catering to a generation who believes that business, money, and competition are responsible for all the wrongs in the world.  So in order to succeed these businesses create the perception that their business is not motivated by money or competition and then do so surreptitiously.  And in the cover over darkness, people behave differently than they do in the light of day.

It is not money and competitiveness which turn a good business bad.  Money employs more people.  Competitiveness improves services and products and fosters innovation. When money is tight business looks for shortcuts.  When there are few competitors left (or what seem like competitors are actually co-dependent) the survivors will go to any extent to protect their domain.

A business model designed to look like it makes money passively is a wolf in sheep’s clothing. And the "uneducated are their best customers."

Editor's Note: Thanks to @dsearls and @megwith for links to articles above

What the Future Will NOT Be

NOTE: Mark Suster added a comment below pointing out that I advocate no alternatives.  Which is correct.  We design solutions for the problem.  Our use of digital tactics is limited by how weak the tools are, in effectiveness and integrity.  Which is the point of this post.  But since he asks for a direct marketer's alternative and its numbers to compare to his $22.00 acquisition cost, I have provided one with better quality and integrity that is $5.71.  Since I could not insert a jpeg of a chart into the comment, I'm inserting it here to make the comparison easier to see (albeit not as pretty as Mark's), but please see my reply to his comment for the rationale for the numbers estimated here:

DAILY PERFORMANCE

NOTE: Have not included the cost to create, customize and traffic "integrated advertising" in the 1.600 websites (multiplied by the number of days of the program) or developing conversation playbook, casting, costuming/equipment and rehearsing 22 Ambassadors (one time for the whole program)

Here's the post:

Mark Suster writes a guest post for Techcrunch: The Future of Advertising Will Be Integrated.  Kudos to this VC for admitting the truth - that his customers are wasting 99.9% of their digital advertising, in general, or that social media advertising wastes even more. There must be a reason he is sharing this shocking information. But when you consider his info in the context of other news stories about brands shifting marketing dollars to proven high ROI alternatives, his recommendation to improve such low Click Through Rates by integrating advertising into editorial content seems irrelevant at best or just plain desperate.

Other news stories to consider are Unilever and Pepsi (#2 to P&G and Coke, respectively, so must do more with less) emphasizing marketing return on investment.  Digital advertising's .09% response rate couldn't meet the minimums for any ROI analysis, could they?  Not even if Mr. Suster's recommendation doubled its response rate to .18%  - which is doubtful since "clicking" on an ad is so fundamentally contrary to what the customer wants to do: "They Don't Want to Be Diverted From Their Current Online Activity"

Then there are the two stories in the last month about Pepsico which suggest that better marketing ROI is outside the US, especially in emerging nations.  Brand Pepsi-Cola lost its #2 position to Diet Coke in the US.  But Pepsico beat street expectations due to rising food sales oversees, following a year of increasing marketing spending in emerging markets, but not in the US.

When you think about it, it makes sense that marketing ROI for US brands is higher in emerging nations.  First, US brand penetration is lower, so there is an opportunity to find new customers. Second, US brands are reliable.  If a new customer likes the performance, they will get the same each time they buy it again.  Since US brands have had a long lead time to develop processes to assure customers they will get the same thing everytime time they buy, they may have an advantage over local, newer competitors.  So US brands are more differentiated vs competitors in emerging countries.

With better results from increasing marketing spending in emerging nations and the lack of new marketing tools to improve success in the much more competitive US market, it is more than likely that marketing dollars will continue to flow to emerging markets. 

The only way marketing dollars will remain and increase in the US is if new marketing tools emerge which do more with less. 

Unfortunately, digital advertising performance does less with more.  And tactics like integrated advertising into content lowers integrity of the medium.  Following Mark Suster's advice to "integrate" advertising is not only futile, it creates a potential for conflict of interest.  Which is the tragic flaw to new media's business model to sell low cost content.  For example, AOL's Arianna Huffington is allowing Michael Arrington of TechCrunch to invest in the companies he writes about.  As we comment to the Atlantic article, "Arianna Huffington's Legitimacy Problem":

Follow the Money.

Managers get paid more for getting content for less and selling advertising for more. One way is to be in denial about the potential for conflict of interest when editorial and commercial interests are not separate. An objective analysis would probably find a correlation between a decision that risks conflict of interest with unhealthy company financials - in other words a desperate act.

Warren Buffet apologized to shareholders for waffling when his heir apparent lapsed, reminding us that conflict of interest should be a black and white issue for any company with integrity.

 

 

 

 

What Customers Want to Pay For

For decades now, many argue that the future of the US economy is about replacing manufacturing with information and communication technology.  Technology innovation thought leaders have argued that the free internet makes it possible for innovation to come from the bottom up instead of top down from big corporations.  And by making technology development open, anyone can contribute to making it better.  The theory is that by removing the friction of money and “ownership” from the creative process, the end result will be faster, better.  This “democratic” innovation process is evangelized by Steven B. Johnson in his recent book Where Good Ideas Come From: The Natural History of Innovation.

After twenty years of "Shoot, Ready, Aim", this product development process isn’t yielding economic growth, according to the Financial Times:

In new calculations for the Financial Times, Eswar Prasad, a former International Monetary Fund official now at the Brookings Institution and Cornell University, finds that the rich economies will owe a rapidly rising share of public debt worldwide, while contributing relatively less to global growth.

Rich countries already experiencing heavy demographic pressures on their public finances, such as Japan, will be joined by others, such as the US, which is beginning to experience the full force of the postwar “baby boomer” generation retiring.

Professor Prasad finds, rich countries will see the average government debt per person of working age rise from $31,700 in 2007 to $68,500 in 2015.

To both replace manufacturing and grow the economy with information and communication technology, we need a creative process that yields something worth paying for.   That creative process needs to start with an objective to serve a benefit customers will pay for not What Technology Wants, as argues Wired founder Kevin Kelly in his new book. 

What do customers want to pay for?  They pay to share live, interactive learning and entertainment among complete strangers with a common interest. They pay hundreds to attend a live sports event or concert for a few hours.  They pay thousands to attend a course in an institution of higher learning or a professional conference.  They pay only pennies per minute for access to the cable and the internet where at a recent “Future of Media” conference everyone agreed 95% of all content is junk. 

The challenge facing technology thoughtleaders is the same one facing leaders of big corporations.  How ironic that both are so disconnected from what customers want to pay for at a time when communication is so possible.

Marketing Alternatives to Facebook for the Rest of Us

Facebook uses the success of Nike's World Cup campaign as an example of its effectiveness to promote entertainment.  But if Nike’s World Cup campaign did receive high response, raising the average presumably, that means everything else receives in even lower response rates than the already low reported average in this article in Businessweek.

. . . the average ad is clicked on by less than a tenth of a percent of the site's users, according to advertisers and analysts, including Greg Sterling, a San Francisco-based Internet marketing consultant.

Big brands are showing up because Facebook is popular among the hard-to-reach and appeal-to 18-34 year olds.  Not because they think it is an effective medium.  Some do it to draw their smaller competitors’ dollars into an ineffective medium.  Remember these companies are not about sharing knowledge with others for the benefit of mankind.

Facebook may be a place where already popular entertainment properties, like the World Cup, can successfully engage the audience to participate. Facebook is a very personal and “me-centric” social media.  So the networking is among friends or friends of friends.  To be even more accurate – they are really lost friends, distant relatives, and acquaintances with whom one doesn’t already regular talk to.    It makes sense that already popular entertainment are common “shares” since this is something one expects to receive positive receptivity for from people one doesn’t know very well nor have anything in common with from a vocational or avocational point of view.

There are alternatives for the rest of us - not yet popular entertainment or small to medium business.

Twitter is a better source to find individuals who aren’t just waiting for the next “popular“ thing to come along.  They have interests, expectations, and knowledge through experience which move them more than popularity.  Anyone who takes the time to build a list of Twitter accounts to follow - consistent with a category other than mass popularity – is actively sharing information by whom they follow. They are the most active in a community, potentially highly influential, and are publicizing their specific needs and interests. They are there to network with prospects (not friends) so they will respond.  

Twitter is free, but analyzing twitter accounts to build a list of prospects is very time-consuming.  Use keywords in Twitter Search to find interested twitter accounts, look at whom they follow.  You can organize them in a public or private list (without following them), and then watch the list to learn who may care the most about what you have to offer.  Then follow those and when they follow you back send them a reply (not a direct message that no one else sees) with a personal message to start a conversation. 

An alternative for small to medium business-to-business is LinkedIn.  Anyone can search the database to find individuals who may hire or buy outside services.  But to contact strangers requires a premium membership which permits a limited number of “In Mails”.  Additionally, on Linked-In you can search and join groups, research the members and outreach with personally relevant messages through In Mail.  If you don’t want to pay for the premium membership to send In-Mails, then use it to identify people to look for on Twitter. 

Facebook appears to be less expensive than Google’s keyword bidding process, but Google’s self-reported average 10% response rate (also according the to BusinessWeek article referenced above)  is a lot higher than Facebook’s less than a tenth of a percent.  So spending money on Facebook is like buying a metal detector to find a gold coin in a garbage heap. Twitter is very time-consuming, but the minute someone figures out how to accelerate the process for a fee, it would probably be worth trying.

So:), here's what I took away from the Future of Media Forum

 No one talked about the future of media.  There is no focus.  The battle continues.

The media blamed the agencies for not spending their client's money in proportion to the way the audience/customers spend their time.  

Agencies sent three different messages to online media . . . 1) give us more design control . . . 2) give us your data . . . 3) If you don't, we'll keep telling our clients to pay us to design the media context where the client message is relevant and we have access to the data. (read: touché)

 Traditional media said they are no longer pitching ad budgets based on CPM's, they are pitching marketing budgets with an integrated mix of content & both virtual and live interactivity.  (read: Et tu bruté)

Agencies and media once found mutual benefit in partnering, but not anymore. 

Michael Wolff was the only person to address the elephant in the room - how will content be funded?  (He knows the reality of the "Make vs. Consume" ratio discussed by Scott Berkun here.) He was very pessimistic about selling $.99 content to one person at a time (do give me a call Michael Wolff, we've been there and have insights into what it takes) instead of selling the audience in bulk for $.005 per capita to advertisers, very efficiently, by calling on a handful of agencies. (those were the days, weren't they? . . . I remember eating lunch at 5 star restaurants and pb&j's for dinner when I started at Leo Burnett buying media for United Airlines)

Fred Wilson announced he thinks it's possible to sell content a la carte at scale - because of the behavior of young people.

Ev Williams said there's an opportunity for media to capitalize on organic fan engagement with paid sharing of their tweets on Twitter.  

Separately, everyone seemed to agree that 95% of content sucks.  

But Ev's idea probably isn't going to change that until the content is better because there will only be tweets about the 5% worth tweeting about.  

No one talked about how to raise the bar in the future. For example:

• leveraging interactive technology to deliver more of the experience people pay a premium for when they buy a ticket to a live event 
• improving the chances of the quality untapped talent to find the receptivity they need to cultivate their talent and rise above the 95% junk and be discovered by producers with high value video production and distribution assets.

Zuckerberg's Facebook - a new low or a new high?

[Also on Huffington Post here: http://www.huffingtonpost.com/katherine-warman-kern/zuckerbergs-facebook-new-_b_739215.html]

Facebook and particularly Mark Zuckerberg are in the spotlight.  The movie, which premiers this week-end, depicts the founder as being untrustworthy.  Despite his lack of integrity (or because of it?), Mark Zuckerberg has risen in less than 2 years to the number 35 richest individual in Forbes, surpassing Steve Jobs.   Displaying total confidence that his net worth will never disappear, he just gave $100 Million to the Newark, NJ school system.  Even the Rockefellers and Fords waited a little longer before setting up their foundations, didn't they?

Is it all based on myth or is Facebook really that magical?

Business Week/Bloomberg’s long article, by Brad Stone, “Facebook Sells Your Friends” explores both possibilities. 

Facebook’s financial success is largely due to adoption by advertisers, including brands like Pepsi,  Coke, McDonald’s, and Nike.  There are two parts to the formula to generate advertising value: scale + response rate.   Advertisers know that you can increase response rate by targeting the message for more relevance, but that limits the scale or increases complexity (producing a different message for many targets). The dream is to generate a higher response rate with one message targeted to the largest scale possible.  

Combining mammoth scale and high response rate is the dream Facebook promises to deliver. 

First scale:

Speaking at the Cannes Lions International Advertising Festival this summer, Zuckerberg said that reaching a billion members is “almost a guarantee.”

This is about double the current global 550 million monthly Unique Visitors (according to the article) and about 6 times the US monthly Unique visitors, which the article claims is now up to 165 Million.  This remarkable growth rate versus the three month stall at about 110 Million, December 2009 – February 2010, has been going on since Facebook made everything you publish public (unless you “opt out”) and introduced the Like Button on partner websites across the internet. 

We have asked comScore if the timing of the Like button and the growth in Unique Visitors is a coincidence or if clicking the Like button on a Facebook partner site (which is automatically published on your Facebook page) counts you as a Unique Visitor even if you never directly access your page on www.facebook.com.   But we haven't received an answer yet.  UPDATE: According to Comscore representative, Stephanie Flosi, the answer is: “NO, they would not be counted unless they actually visited Facebook.com”.  Unfortunately, this means that Facebook’s low conversion rates for advertisers are low because in fact people don’t respond to ads.  And if Nike’s World Cup campaign did receive high response, raising the average presumably, that means everything else receives in even lower response rates than the already low reported average.

. . . the average ad is clicked on by less than a tenth of a percent of the site's users, according to advertisers and analysts, including Greg Sterling, a San Francisco-based Internet marketing consultant.[For alternatives to Facebook read more here.]

This incredibly low response rate suggests that Facebook’s ad targeting isn’t improving response rates.

But, Facebook acts as though the low response rates are not due to lack of people on the site, but because of ads with low recall – in other words, the ads aren't compelling enough for people to notice them.  So they encourage “engagement” ads which invite people to hit the “Like” button.  If individuals do press the “Like” button, Facebook then moves the ad into the users stream which is syndicated on all their friends’ pages - “So and so liked this ad”.  In case those friends miss your “Like” in their stream, Facebook also places the ad in the advertising area on friends’ pages, adding: “your friend(s), so and sos, liked this ad”.  The article reports that Nielsen detects a significant difference:

Nielsen, which started measuring the efficacy of Facebook ads a year ago, says that if users see their friend "likes" an ad or has commented on it, they are up to 30 percent more apt to recall the ad's message.

If the click through rate also increases by 30% that isn’t going to move the needle. 

• A 30% increase on a tenth of a percent is an increase from .001% to .0013%

This may be why small business owner, David Belden, didn’t have the revenues to continue marketing on Facebook even though he thinks it is so magical:  

David Belden, founder of Residential Solar 101, a San Francisco reseller of solar panels, knows exactly who his customer is: male, around 55 years old, and with an environmental conscience often demonstrated in the ownership of a hybrid car. That's right in Facebook's wheelhouse. "I can target my exact audience, rather than trying to come up with a proxy for it," like looking at search terms or which websites people visit, says Belden, who was spending about $4,000 a month on Facebook earlier in the year before he was forced to rein in his marketing expenses because of budget issues. He adds: "If I was bidding on expensive Google keywords like 'solar,' I'd be going against guys with a much larger marketing budget."

But it may be that competitors with the much larger marketing budget and the reach of television have the advantage on Facebook as well. for example, Nike's World Cup "Write the Future"campaign, which represented probably over $300 Million in league sponsorships and actual media investment. 

. . .Hundreds of millions of people saw ‘Write the Future’ on television. Before it blanketed traditional media, however, Nike launched the video on Facebook, the Web's dominant social network.

The video started as an ad on the site. Then it was passed from friend to friend, often with comments and members recommending it. In the resulting discussions, the clip was played and commented on more than 9 million times by Facebook users—and helped Nike double its number of Facebook fans from 1.6 million to 3.1 million over a single weekend. Getting the ad onto Facebook cost a few million dollars, according to the companies. All that passing around was free. David Grasso, Nike's chief marketing officer, says Facebook “is the equivalent for us to what TV was for marketers back in the 1960s. It's an integral part of what we do now.”

Facebook is given undue credit for the success of the Nike’s World Cup campaign.

When there is the fan engagement of the World Cup event, the appeal of the talent in the ads which Nike pays enormous amounts of money to have access to, the reach of Nike’s television advertising, and the entertainment value of Nike’s creative,  Facebook may give a marketer a chance to actually see and measure the "water cooler" multiplier effect of those combined assets, for "a few million dollars". 

But clearly this “case study” is hardly replicable by almost anyone else, especially not small to medium sized businesses.  Whatever the multiplier effect Facebook mirrors,  it only creates value if there's something to multiply.  (multiply any number times zero and you get zero) 

At the WARC Future of Advertising Research conference, “Ernie Kim, senior VP at the marketing research company, said that online channels' effectiveness is  . . . often overestimated”.   This article entitled: “Researchers Warn on Media Measurement” goes on to recommend the importance of studying the impact of marketing mix.  Certainly the use and timing of different media channels can alter the impact of any one medium’s performance.

Instead of encouraging media to fight each other over the shrinking advertising pie, by building a case that one medium is better than another, the brands and the media companies may find mutual benefit by identifying how one medium can multiply the response rate of another.  Once a new higher benchmark is established, then the individual media would be motivated to collaborate with each other to continue to find new highs. 

This would be much more productive than motivating the creation of myths to cover up new lows in response rates.   

What "They" Think They Know

[UPDATED]

The Wall Street Journal is publishing a series exposing the data collection practices by ad networks and search engines and is providing helpful, but little publicized information about links to "opt out". 

Although most of the controversy is about faceless commercial entities creating accurate intimate profiles of an individual, there is another equally important concern . . . when  so-called sophisticated analysis is nothing more than a Wild A** Guess and is dead wrong.

Take my 79 year old mother, for example, who is an avid Google user, but probably defies all assumptions made by the  "artificial intelligence" with which Eric Schmidt of Google anticipates "we can predict where you are going to go."  

Mother is an early adopter of every technology.  And she has used the internet to access information and educate herself about every medical condition, treatment, drug, etc. which my Father and she have encountered.  

The so-called "artificial intelligence" concludes she is a guy interested in enlarging her penis, access to porn, and well, do I need to go on?  She actually dreads checking her i-phone when an email comes in and has had a few embarrassing moments when her grandchildren are playing games on her phone and an email alert peaks their curiosity.

The idea that a 3rd party can profile you accurately based on your behavior on the web and commercialize that information may seem creepy and a violation of your personal privacy.  But it is even worse if they assume they are right and get it completely wrong.

Individuals would benefit by having the tools to securely store personal information, publish content, and critically, control the context in which information is released.  For example, my Mother would have the tools to signal the specific medical context of her interests and her receptivity to vendor information, so penis enlargement vendors would not make such an inappropriate Wild A** Guess and she would get the information she truly wants.

Both Paul Graham, YCombinator head, and Doc Searls, author of the Cluetrain Manifesto, point out that traditional advertising is not sustainable on the internet.  Paul Graham points out that one reason Yahoo! failed to develop a viable business model was because their focus was distracted to the bubble of demand for internet banner advertising (before advertisers realized it is less effective than traditional print).

"Hard as it is to believe now, the big money then was in banner ads. Advertisers were willing to pay ridiculous amounts for banner ads. So Yahoo's sales force had evolved to exploit this source of revenue."

Likewize Doc Searls predicted the web ad business bubble would burst.  As he points out, his prediction is now echoed by others like Eric Clemons, Professor of Operations and Information Management at Wharton, whom he quotes:

"The net will find monetization models and these will be different from the advertising models used by mass media, just as the models used by mass media were different from the monetization models of theater and sporting events before them.  Indeed, there has to be some way to create websites that do other than provide free access to content. . ."

Many believe that the net monetization model will be an evolution of the free/ad supported model used by mass media.   However, this assumption overlooks three basic facts.  First, mass media adopted the free/ad supported model because there was no other choice - there was no way to collect money directly from consumers for broadcast media when it was only available "over the air - and now that cable collects more money from consumers than the networks generate in ad revenues, the networks and cable are now re-negotiating for a share of those monthly cable fees.   Second, mass media advertising is no longer seen as a growth strategy, it is a share defender, resulting in a long term shift of advertising's share of marketing budget from pure mass advertising to other categories since the late 1980's.   Third, the premium paid for live event participation is growing exponentially.  

In the spirit of aiming for something to disrupt ambiguity - by not splitting hairs over what is a better form of advertising or taking sides in the retransmission fee negotiations and by aiming for something that makes all those discussions moot - Comradity is firmly in the camp of believing that innovation should be about creating something worth paying for.  And in our actual experience marketing access to content (i.e., this is not a Wild A** Guess), when people are paying, the payer must have total control over their personal information, and when people are participating, they must have control over the content they are creating.  In our opinion, all the investment in surreptitious data collection and analysis space will be absolutely  irrelevant to a paid model (unless it can be retrofitted efficiently to give control to the individual).

But "the challenge" to attracting investment, as Venture Capitalist, Fred Wilson is quoted by Stephen Baker here is to prove the business can "get someone [whether business or consumer] to pay $2-$10 dollars per month to ensure that sort of premium privacy."  

In our opinion, this discussion, although important, is putting the cart before the horse.  That's why "consumer" response to privacy issues seems so ambiguous.  It seems as though they don't care.  But that's because so far people have a way to protect their privacy.  They either do not share information or they remove it from services like Facebook when they shift their privacy policies to more open.   In other words, there is not enough value created by free services like Facebook to care.

To motivate anyone to pay for innovation, first there needs to be a reason to use it.  Therefore, as important as it is for technology to aim to innovate in the area of premium privacy, the value won't be there unless there is something to lose by NOT sharing information or participating.  First we need to develop experiences worth paying for and charge enough to share the revenue with the technologies which make it possible to participate and give individuals control over their information shared and content created.

Response to Clay Shirky's "A Rant About Women"

I give Clay Shirky's* "A Rant About Women" an #Oh-Please.  And anyone who knows me is probably saying but Katherine - you should take his advice!

Women: If a company or organization is attracted to men or women who have BSed their way to get there, the business is in trouble and there is nothing you can do about it by working there. 

Why? Read the "Dunning Kruger effect".  This Wikipedia entry begins with this explanation: "(an) unskilled person makes poor decisions and reaches erroneous conclusions, but their incompetence denies them the metacognitive ability to realize their mistakes".

IMO, competent people erroneously assume that incompetent people know better and can be convinced otherwise.  Interestingly, according to Wikipedia, the Dunning Kruger effect also contemplates the reverse: "people with true knowledge tended to underestimate their relative competence. Roughly, participants who found tasks to be relatively easy erroneously assumed, to some extent, that the tasks must also be easy for others."  

The Dunning Kruger Effect is the same for Men and Women.

So, Clay Shirky, instead of encouraging your students to be over confident  - why aren't you helping the competent men or women to become more self-aware and to connect them with companies or mentors who appreciate them?  That would make a difference - a contribution to changing the way things are instead of maintaining the status quo. 

* By the way, this isn't the first time I've questioned the over simplification of Clay Shirky's analysis.

HOW MANY FACEBOOK ACTIVE USERS ARE THERE?

UPDATED:  Facebook revenues are driven by scale and data mining.  Some say the May 31, 2010 "quitfacebookday" was a bust because Unique Visitor numbers continue to climb.  But there is evidence that the traffic may be inflated by people changing their Facebook status, and/or tools like Facebook Connect and the Like button.  However, the data mining value is protected - even the information of those who have deactivated, deleted accounts, or just removed Facebook content from their pages.

Unique Monthly Visitor numbers are used by Facebook to define "active" users in the press.   The "500 Million and growing" reports we hear so often from Facebook and the press are global numbers:   http://www.businessinsider.com/facebook-reaches-500-million-users-2010-5 and http://techcrunch.com/2010/04/21/facebook-500-million-visitors-comscore/. 

The US numbers are about a fifth,  at just over 100 Million.  Comscore data that says that monthly unique visitors were 111.9 million  Download ComScore 2009 US Digital Year in Review: Page 7 in December 2009.  Corroborating the latter, Nielsen reports 116.3 Million unique visitors in the month of January 2010.  http://blog.nielsen.com/nielsenwire/online_mobile/facebook-users-average-7-hrs-a-month-in-january-as-digital-universe-expands/

On May 17th (2 weeks before the May 31st, "QuitFacebookDay"), Fortune questioned the backlash and reported that Facebook added a net gain of 10 million after announcing the controversial privacy changes.  http://tech.fortune.cnn.com/2010/05/17/what-backlash-facebook-is-growing-like-mad/

A Comscore chart confirms that US monthly unique visitors increased at a much faster pace after a plateau from December 2009 - March 2010.  The increase coincides with the Facebook policy change to shift of the default "share" from private to public and the launch of the "Like" button in April 2010.  Makes you wonder what the change in momentum means.   

Are these unique visitors "active" or "deactivating"?  According to an ABC News investigation,  Facebook does track deletions and deactivations but does not publically report them.   In the ABC report, search marketing expert Danny Sullivan suggests interest in deleting Facebook accounts was significant since it did impact Google search trends:

To see how recent the Facebook trend was, Sullivan used Google Trends, which shows the popularity of certain searches over certain periods of time.

Although there was not enough search volume for "how do I delete my facebook account," he said he found something interesting when he entered "delete facebook account."

"Yes, there is definitely a rising trend," he wrote. "Over time, more and more searches at Google have involved it, it appears."  Quitting Facebook: What Happens When You Deactivate?

Likewise, according to Joseph Dee, who started the movement,  "quitfacebookday" was a trending topic on Twitter. 

Directionally, polls suggest the Facebook backlash was real:

"60% consider quitting facebook" http://news.yahoo.com/s/ytech_gadg/20100521/tc_ytech_gadg/ytech_gadg_tc2184 

"40%+ of Mashable readers say no" http://mashable.com/2010/05/31/quit-facebook-day/

"78% of CBS poll takers say Facebook privacy control changes did not go far enough" http://www.cbsnews.com/8301-501465_162-20006164-501465.html

In addition to considering deactivating or deleting accounts, Facebook members also reacted to privacy policy changes by removing content:

"only 2% say they would quit, but 81% say they are using Facebook more carefully" http://www.sfgate.com/cgi-bin/blogs/techchron/detail?&entry_id=64627

The other question raised by the change in Unique Visitor momentum in April 2010 is how Facebook user participation in Facebook "partners" is reflected in the Unique Visitor numbers.     Fortune reports "partners" have grown to 100,000  http://tech.fortune.cnn.com/2010/05/17/what-backlash-facebook-is-growing-like-mad. 

One way Facebook has developed partners is Facebook Connect (launched in Spring, 2008) in which Facebook member activity on other sites is dynamically published on their Facebook page, without ever going to www.facebook.com.  Does this count as a Unique Montly Visitor for Facebook?

Another way Facebook has developed "partners" is the Facebook "Like" button.  The launch coincides with the sudden increase in Unique Monthly Visitor momentum in April 2010.  Wonder how Facebook "Like" button use factors into the Unique Visitor numbers, even if you never visit www.facebook.com? 

Another Facebook partner are 3rd part y data miners.  You'd think that removing content, deactivating or deleting your account would devalue Facebook to 3rd parties.  But it appears 3rd parties still have access to information.  According to the ABC investigation (above): 

If a user decides to deactivate an account, the profile information is no longer available on Facebook, but the site still saves all of the information in case the user returns.

"We preserve the account in its entirety. People often deactivate for temporary reasons and expect their content and information to be there for them when they return," a Facebook spokesman said in a statement.

and Facebook is vague about what happens when the account is "deleted" rather than just "deactivated": 

After the 14 days, Facebook said it purges the user's information from the site. The policy says copies of some materials may remain for "technical reasons," but Facebook did not immediately explain this further.

 Those "technical reasons"  include obligations to 3rd parties or partners.   When you deactivate or delete your account they still have access to some materials.    The ABC investigation confirms:

Still, Facebook said third-party applications or sites might be able to hold on to that information "to the extent permitted by our policies."