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Facebook’s new Ad program
Facebook, the second most popular site in the UK has been struggling to generate a proper revenue stream from its popular social networking site. Their answer - a social ad program. Are they modest about it? Not really…
“The next hundred years will be different for advertising, and it starts today. As marketers pushing our information out is no longer enough. We are announcing a new advertising system, not about broadcasting messages, about getting into the conversations between people. Three pieces: build pages for advertisers, a new kind of ad system to spread the messages virally, and gain insights.”
In essence, this program consists of three services:
1. social ads - ads targeted based on member profile data and spread virally
2. beacon - a way for facebook members to declare themselves fans of a brand on other sites and send those endorsements to their feeds
3. insight - an interface to gather insights into people’s activity on Facebook.
Social Ads is particularly interesting as it combines social actions from the user’s friends such as a purchase of a product or a review of a restaurant with an advertiser’s message. These ‘ads’ will either appear within the user’s news feed as sponsored content or as a banner on the page, kind of like Google mail’s (gmail) contextual advertising.
This Ad program may look like an attractive model to online advertisers, but it can also backfire. Or as Eric Schonfield of TechCrunch points out:
“If I start to think that my friends are advertising to me, I may no longer trust them (and, in fact, try to avoid them . .. by not logging into Facebook anymore). So the the trick is to make these appear to be genuine recommendations, and not ads. I am not sure how many people will be fooled by this, though. It risks turning something useful—the feed of my friends’ activities—into something spammy.”
Or as Seth Godin points out:
“When someone goes to Facebook, they’re not looking for stuff. They’re looking for people. But people don’t buy ads, stuff does. That’s a problem. Any platform that makes ads a distraction or a cost is always going to fail compared to a site where the ads are a welcome part of the deal.”
And this is the interesting bit. How are facebook’s users going to respond. will they embrace this advertising model or reject it? Only time can tell…
