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The Arrival of Inbound Marketing
It’s amazing isn’t it? It almost doesn’t make sense. You’ve got a company that has 13 full-time employees, generates absolutely no revenue, and gets sold for $1 billion. I’m of course talking about the early April acquisition of the photo-sharing mobile app Instagram by Facebook CEO Mark Zuckerberg. What’s even more remarkable is that Zuckerberg bought the app knowing that monetizing it might compromise the value that Instagram CEO Kevin Systrom worked so hard to build.
So why did Zuckerberg throw ten figures at an app that is seemingly impossible to monetize?
There’s a new metric business leaders and marketers are beginning to embrace; it’s called return on engagement. When Zuckerberg purchased Instagram, he wasn’t purchasing a novel photo-sharing technology (although that was a huge plus). What he was really doing was absorbing a community of 35 million highly engaged users.
This purchase and many more like it reflect a change in the way we appraise value. Marketers are beginning to understand that it makes more sense to pitch to 1,000 engaged users vs. a million annoyed users (e.g. poorly targeted ...