How Eduardo Saverin Sold Facebook Ads in 2004

http://www.digiday.com/platforms/how-eduardo-saverin-sold-facebook-ads-in-2004/

by sohlis • 14 years ago

182 39 14 years ago

It's nice to see that a Goliath like facebook also started out a david.

dm8• 14 years ago

It's interesting to see how they saw Facebook in 2004. For them it was a college directory and their biggest milestone was reaching all the schools in US.

Their pitch deck looks mature. It covers all the major points; product, audience profiling, targeting, growth, future plans etc.

instakill• 14 years ago

That looks like a standard advertising pitch deck that you'd expect to see from any large publisher in the last year or so. Quite impressive for a college student in 2004.

cantbecool• 14 years ago

"... explaining that marketer’s could target by sexual orientation or even by dorm." Targeting by your dorm would seem a bit creepy.

conradfr2• 14 years ago

Marketing yourself toward some girls dorm across the campus seems great :)

throwaway54-762• 14 years ago

No, it sounds creepy.

RandallBrown• 14 years ago

Facebook used to be able to tell you what dorm you're in. "It would say "Online in East Quad" on my profile if I happened to be logged in at my dorm. I thought it was a neat feature, but it's understandable that some people wouldn't like it.

Edit: you're vs. your

grzaks2• 14 years ago

He didn't manage to get a single advertiser right?

PakG12• 14 years ago

I don't think that's plausible, he would have to had at least a few small ones. And if I recall my memory of reading Facebook Effect and Accidental Billionaires, both books say that he was able to get something, though nothing big.

But more importantly, does that matter? There are tons of great projects here on HN that are never able to get any customers. Does that make their work any less impressive? Let's judge the work for the work itself, not whether or not it achieved something. Obviously, it's a dog-eat-dog world, but you wouldn't look at a founder with a string of failures and automatically come to the conclusion that the person doesn't know how to do a startup. Luck, economic environment, and a host of other issues come into play. Judge the work for its own merit.

phogster• 14 years ago

Well the work being judged here is the marketing effort, not the engineering work.

grzaks2• 14 years ago

My question was more ... well, just a question. I was hoping somebody will either confirm that or deny.

codegeek• 14 years ago

quite impressive deck.

dlokshin• 14 years ago

In the very beginning (2004 when I was a freshman), I remember being able to buy ads myself, for something like $10 for 1,000 views. This was really, really popular. People would advertise all sorts of things like parties, furniture, etc. A really popular advertisement was for roommates to pitch in and buy 10,000 views of "HAPPY BIRTHDAY, EMILY! WE LOVE YOU!" and a picture of the blocking group to the left.

These advertisements were great because they were SUPER TARGETED, directed towards me by someone I probably knew. I remember sitting at my desk, refreshing the page just to see which new ads popped up. It was wonderful!

demione• 14 years ago

What a novel concept: users actually wanting to create and see ads because they are so incredibly targeted and relevant. I wonder at what point facebook lost their grasp around such a tightly coupled ecosystem.

polyfractal• 14 years ago

Probably because the amount of money to be made from college seniors advertising parties is a microscopic fraction compared to the amount of money that Nike is willing to pay to reach those same college students.

timdorr• 14 years ago

When they got rid of Networks. As they moved outside of schools, the natural grouping of everyone in the system around your college (and later by company) was lost. The Groups feature never really re-captured this kind of dynamic because the new groups are inherently smaller and not forced.

Another big factor was the introduction of the news feed. Now people are doing the same thing as ads (though, on a smaller scale) by posting updates and having them read through the news feeds of their friends. The old 2004 ads were the only way to communicate between users without posting on their wall.

MrDOS• 14 years ago

Interestingly, I did this for an event hosted by a student organization at my small university (~3,000 full-time students) last spring. According to the campaign statistics, CA$10.54 bought an astonishing 101,937 impressions. This is somewhat less impressive when you consider that we were paying by clickthrough to the event page, not by impressions, and only got 43 clicks, but due to the size of the university, I think almost every page view that whole weekend had an instance of our ad.

Edit: I feel I should clarify that last remark for those not immediately familiar with Facebook, or those who use ad-blockers: yes, of course there were a whole lot more than 100k page views that weekend, but our targeting was perhaps a bit too constrained (~1.1k users targeted out of a hypothetical 3-4k applicable), and on top of that, Facebook only reloads ads when you perform “serious” navigation, not just AJAX-based actions available directly from the news feed.

shoham• 14 years ago

I've bought some FB ads, and it is annoying that I can't target friends. Isn't that a big mistake?!? Most businesses are small, so just targeting your friends is simpler than getting your friends to "Like" your business, and then targeting your likes. I didn't know the feature used to exist, it would be nice to get it back!

brntn• 14 years ago

This used to annoy me (especially when people created events in place of ads) but it's mostly solved now with the ability to promote your posts. That's going to work way better than an ad that your friends are used to ignoring.

chintan• 14 years ago

2004: 90mm pageviews @ $0.5 CPM ~ $50K per mnth in revenue.

2012: 1 Trillion pageviews @ $0.5 CPM ~ $500mm per mnth in revenue

* http://www.google.com/adplanner/static/top1000/index.html

* * Assuming full inventory

xal• 14 years ago

Crazy that Facebook has an order of magnitude more Page Views as anyone else.

csallen2• 14 years ago

Does anyone remember the icons you could buy for your friends' birthdays on Facebook? These came quite a bit later than 2004... I would guess ~2006. At first all of my friends balked at the idea of spending $1 on a gif. But it wasn't too long before I started seeing a couple of these appear on people's walls every time they had a birthday.

Given the sheer number of people on Facebook, I assumed this would eventually turn into a decent source of revenue for them. But then they unexpectedly got rid of it. Does anyone know why? As a company, Facebook kind of "owns" the birthday, so I've always wondered why they haven't tried to capitalize on it similarly to how the diamond industry capitalized on marriage.

remi2• 14 years ago

Trivia: these icons were designed by Susan Kare (http://www.kare.com/portfolio/01_facebook1.html) who also designed some of the most famous Macintosh icons (http://www.kare.com/portfolio/03_apple_macicons.html).

sadlyNess• 14 years ago

And the Firefox icon too. *http://hicksdesign.co.uk/journal/the-icon-handbook

MichaelJW• 14 years ago

https://blog.facebook.com/blog.php?post=405727117130

"Closing the Gift Shop may disappoint many of the people who have given millions of gifts, but we made the decision after careful thought about where we need to focus our product development efforts."

"We'll be able to focus more on improving and enhancing products and features that people use every day, such as Photos, News Feed, Inbox, games, comments, the "Like" button and the Wall."

csallen2• 14 years ago

That blog post strikes me as a little fishy. I'm not privy to the internals of FB's engineering structure circa 2007, but I doubt a few engineers working on gifts (which even then likely brought in $millions/year) seriously detracted from development elsewhere.

Given the date, I think it's more likely that gifts were removed to help support the growing FB Platform rather than competing with its apps. (In 2007 people had profiles that looked like this: http://yflcsandi.files.wordpress.com/2008/07/facebook-profil...) Either that, or something along the lines of focusing less on revenue-generating activities.

That said, I believe it's better to nurture traditions early, especially if those traditions involve payment. It's also rare for a company to generate significant amounts of revenue from multiple channels, so I'm not sure it was a wise decision to just kill off the Gift Shop.

conradfr2• 14 years ago

I was wondering the same thing recently, recalling "offering" a (free) panda to a girl friend of mine around 2008.

It was simpler Facebook times :)

ajays• 14 years ago

The power of Facebook advertising is not on showing ads on their own pages. Very few people look at the ads on FB's pages, and many (most?) people browse FB on mobile devices, where advertising is very hard.

No, the power of FB (and its future, IMHO) lies in FB becoming a data provider. So when you visit a page, the advertisers query FB about this opportunity, and based on the answer, pick an ad or decide how much to bid. And FB then collects 25% of the ad's price as a fee. Given that online advertising is a $30B market, you can imagine FB will have no problems making a lot of revenue.

tsurantino• 14 years ago

I don't understand why Facebook got rid of so many features that made Facebook as targeted as it was.

For example, I'm in university right now and I would love to have a course application that was in one of those powerpoint slides. Instead, there is some stupid textbox which makes me arbitrarily assign certain text fields that don't help me strengthen my friend network at all.

At this point, Facebook has become so generic to the point where it's boring. I think the same point can be drawn to why their ad system fails. It's too diluted and irrelevant.

zerostar07• 14 years ago

Hard to believe he used Times font. Probably font substitution. Also does anyone know who is the guy posterized in their original logo?

spolsky• 14 years ago

Al Pacino.

kmavm• 14 years ago

A common misconception. It was Peter Wolf, lead singer of the J. Geils Band.

http://www.quora.com/Who-was-the-Facebook-Guy-in-the-origina...

qq66• 14 years ago

Looking at things like this pitch deck and Gabby Douglas' post-medal interview, I'm amazed by how mature some people become while they are still teenagers. If I was pitching Facebook today as a near-30-year-old business school graduate, my deck would be only somewhat better than this one produced by a college freshman. Had I attempted it when I was 17 it would have been a total disaster.

gavinbaker• 14 years ago

Based on what I read in the Facebook Effect he did sell ads, and wanted to sell more but advertising wasn't a focus in 2004-6. As a marketing person myself, I have a soft spot for him and do always wonder why he is made the villain in the Facebook story. Anyone know?

How Eduardo Saverin Sold Facebook Ads in 2004

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