By Heather Angus-Lee

After a day at the office researching the social media world (blogosphere, podcasts, social networking sites) for one of the largest post-secondary institutions in Canada, I went home to crack open a recent issue of my beloved New York Times Magazine, only to discover it was “The College Issue.” I came across a column in the magazine about how the U.S. bank JP Morgan Chase is using Facebook to market to Facebook’s original crowd – college students – for its new Chase +1 credit card.

I went onto Facebook and a close read of the Chase + 1 credit card group shows just how social media-focused this new banking venture is: The credit card program apparently “lives exclusively on Facebook” and it’s even more exclusive than that; “group membership is restricted to college networks” so non-students (like me) can’t get in for a deeper peek at Chase +1.

It could be that this sense of ‘insider privilege’ is what’s drawing the hordes of college kids to this group – more than 36,000 at last count! It certainly can’t be interactivity; the Chase +1 group features no photos, videos, wall posts or discussion topics.

That and free stuff (who doesn’t like that?) – Card +1 group members can accumulate “karma points” to buy amusement park tickets or the Blades of Glory DVD, give to causes, learn stuff like how to use credit wisely, and “see how celebrities spend” (!) Man, that is some demographically-targeted marketing and a real understanding of social media – and this from the pinstriped world of banking!

JP Morgan Chase is one of almost 200 corporations so far that are sponsoring Facebook groups. According to respected web strategist Jeremiah Owyang and the Silicon Valley blog, Valleywag, Facebook makes $300,000 per quarter, including ads and online flyers and whatever new applications they’re dreaming up. With its recent doubling of ad rates, it’s estimated that Facebook could reach a billion bucks in revenue sometime in ’08!

Desperately seeking: grassroots groups

When I was researching Facebook groups for a client planning a big technology-breakthrough product release, I was surprised to see how many sponsored sites appear at the top of the Group listings for such subjects as cell phones and PDAs. It took a fair bit of wading through the “ad groups” to find actual grassroot groups passionate about the technology.

I wonder how many folks are joining corporate-sponsored (infomercial) groups and then actually buying the product because of that membership – like, how many college kids actually signed up for the Chase +1 card because of the Facebook group?

Just who are you reaching on Facebook?

College students might no longer be the Facebook audience they were cracked up to be, warns Forrester analyst Charlene Li in her presentation this month about Big Brands & Facebooks: Demographics, Case Studies & Best Practices. She writes, “beware of relying on what worked yesterday, especially with fickle college students…”

And if you think Facebook advertising is the way to reach the youngest adults, you might want to take a closer look at current demographics… Nielsen/Net Ratings says folks over 35 years in age make up 45% of Facebook users as of Aug. ’07! (Interestingly, Charlene notes that Facebook’s internal data shows that the 35+ crowd makes up only 6% of their worldwide membership, as of Sept. 07)

Oh, and Charlene Li warns that the “newbie” 35+ crowd is also fickle, just like the college set. Which begs the question, just who should you be marketing to Facebook?

But some things remain pretty clear – you should tread carefully in setting up sponsored/unsponsored Facebook groups (corporations can start them without paying FB ad rates – but your company better provide full disclosure as to who started the group!)

And the other certainty? Charlene sums it up well in her presentation: “Facebook marketing is about communicating, not advertising.”


  1. I found this posting of incredible interest especially since so many clients (corporate and non-profit) are looking at Facebook…scratching their heads and wondering whether there is any value to incorporating this into their overall marketing mix.

    I think the last point hits the point home…Facebook marketing is about communicating not advertising…something once again all of us need to ensure we are getting our heads around before venturing down this road.

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