Always New Mistakes

November 7, 2007

Facebook’s nextgen ad platform analysis

Filed under: Business — Tags: , , — Alex Barrera @ 2:21 am

Today, Facebook unveiled at New York their new ad platform. There is a great fuzz around this and hundreds of blogs are posting about it. That’s why I wont be talking about the actual system. For those interested in knowing how it works, I encourage you to read Owyang’s summary about it. Instead I’m going to try to analyze how, why and what can be done with the new system.

The social ad platform is structured around two ideas, brand awareness and friend’s trust. Some days ago I was discussing with a friend what this announcement really meant to Google. Would Google’s ads revenue be damaged by it? After reading today’s news I understand that Facebook is trying to build a brand awareness machine. This means that the objective for advertising in Facebook would be different from that of Google’s adSense network (based on purchase intentions). Now, the question is, which one will bring more revenues to advertisers? Generally speaking, it’s harder to trace the effectiveness of brand awareness ads than Google ads, so will the investment pay off for marketers?

To solve this itchy problem, they are offering what they call Facebook Insights. Here is where things get funny: “Facebook Insights gives access to data on activity, fan demographics, ad performance and trends that better equip marketers to improve custom content on Facebook and adjust ad targeting“. Ok, let’s analyze each one:

Activity
At first I though this was about ad performance, but it seems it’s different. Making a wild guess I can imagine they can track which pages you visit most (friends profiles, brands pages, groups pages, etc.). They might track your actual normal activity within your profile pages (page views, how much time you spend on each page, what sequence of pages you navigate more often, at which hours you are most active, in my case from 11am to 14pm for example, which parts of a page you give more attention to, etc.), so they know which are the best spots/time slots to feed you ads.

Fan demographics
Of course, data mining to the rescue. They are going to drill down the users profiles and retrieve all their information, including country, state, city or town, political views, relationship status, etc. Pretty scary isn’t it? This is something I’ve been ranting about for some time now. People aren’t really aware of the value of their personal information or the wealth of information they put on the Internet. But, most people that are screaming right now about this, should read the Facebook’s terms, as they clearly state that the information you pour into Facebook is theirs to use. I’m wondering what more interesting things they can retrieve from your profile. Lets see, which networks are you linked via your friends, which might give you which type of friends you normally interact with. In my case, most of my friends are from Berkeley, so you can infer I get along quite well with people from Berkeley, or I’m interested in Berkeley. My posted items can also be analyzed to see which items are the ones I like most. Of course, the likeness application is a gold mine. They can extract (I suppose with consent from likeness developers) which friends are “more like me” and easily target them, or vice versa. The same can be applied to the Wall application (no consent needed here as it’s from Facebook).

Ad performance
How are they going to track this? I assume they’ll pull all the hits either on a banner or the user’s news feed. Standard procedure here. Interesting to see which one gets a better hit ratio. Intuition tells us that the news feed will be the winner, but intuition isn’t always right. We’ll have to see some numbers. I haven’t seen any indications yet of price differences for banners and news feed ads, I’m assuming here they’ll probably be different.

Trends
I speculate they’ll show some nice graphs where you can see how the campaign is going. Brand tracking might fall under this category. Zuckerberg said on the press release you would be able to track your brand through Facebook’s public forums. I wonder if this would extend in a future to personal walls or even inboxes. That’s a scary thought, even though the marketer won’t be able to track which wall or inbox the buzz came from.

FacebookTrends

Some wild guesses on the outcome of this new ad system. I think it really hits on a sweet spot, but as some people have already said, it’s going to depend on implementation and the way the roll it out. For example, they are creating a new niche for application developers that want to target business and brand profiles. I wonder if the interaction between Facebook members and business pages will make websites like getSatisfaction.com go away. I have some doubts about the viral spam spreading. Facebook has been clear on their privacy policy about this new features: “Facebook users will only see Social Ads to the extent their friends are sharing information with them. [...] In keeping with Facebook’s philosophy of user control, Facebook Beacon provides advanced privacy controls so Facebook users can decide whether to distribute specific actions from participating sites with their friends“. Now my question is, will I be able to change my news feed preferences to limit or filter spam noise? I currently have around 88 friends on Facebook, not too much, so I might bare with the noise, but what will Robert Scoble do with his 5000 friends (myself included)? Maybe he’ll finally thank Facebook for setting the 5000 friends cap. Another question that comes to my mind is, will marketers be able to control the text that gets injected into someone’s friends news feed? That could be very interesting, as personalized messages or specially crafted texts can make a big difference in marketing.

All comments are welcomed, I want to know what people think about the future possibilities of the system, or even if they are thinking about using it. New ideas for more data mining on my Facebook profile?

UPDATE: I received the first spam message from Robert Scoble. He created a brand page for himself so you can join and be a fan of Scoble. It’s going to be very interesting to see how all this develops.

Image Credits: Wikipedia.org, Techcrunch.com, Blogpulse.com

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3 Comments »

  1. I think you’re right that most people don’t think about how they are providing companies with fodder and endless amounts of data by putting all this information on sites like Facebook and MySpace, and even Google (Gmail, specifically). Facebook is particularly successful because the ads are so discreet (MySpace ads are much more overt and annoying).
    However, I don’t think this is much different from buying name brand clothing that boasts the name of the company. People don’t seem to mind being marketed to, or being a tool for a company. It makes them feel special or something.
    It’s also a cost-benefit analysis: people put up with ads on Facebook and potential privacy risks in order to stay connected with peers and to be more socially accepted. People wear name brands for the same reason: they have a stigma attached, especially if the brand is expensive.

    Culture sure is a funny thing. How did we get so brainwashed?

    Comment by Danielle — November 7, 2007 @ 4:35 am

  2. You are right, people do buy brand clothing to be more socially accepted. And as some others have expressed, there is nothing bad with it. I wouldn’t mind being fan of some cool guy or of a cool company. The problem comes when you are broadcasting this info indiscriminately. For example, if someone knows I like AI, they might tell me they are fans of Peter Norvig. That’s useful for me, but imagine if someone broadcast this info to his/her 200 contacts. Most of them won’t care at all about that. As Dave Winer puts it: “Advertising will get more and more targeted until it disappears, because perfectly targeted advertising is just information”. But until then, pushing that info to all my friends isn’t exactly what I had in mind when talking about personalized information.

    Comment by alexbarrera — November 8, 2007 @ 6:51 pm

  3. wow !!
    its very unconventional point of view.
    Good post.
    realy good post

    thank you ;)

    Comment by loans23 — September 2, 2008 @ 10:54 pm


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