

Facebook Back of the Envelope Calculation I - epi0Bauqu
http://www.gabrielweinberg.com/blog/2008/04/facebook-back-of-the-envelope-calculations.html

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gibsonf1
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.

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epi0Bauqu
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.

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sadiq
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.

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epi0Bauqu
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.

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epi0Bauqu
FYI (as promised in the post), the second back of the envelope calculation
thread is here: <http://news.ycombinator.com/item?id=161810>

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nuggien
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.

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epi0Bauqu
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.

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zkinion
American Idol mainstream tv advertising != Facebook

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epi0Bauqu
Why not?

