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Facebook launches Social Advertising

Forrester UGC

"Nothing influences a person more than a recommendation from a trusted friend," Facebook founder Mark Zuckerberg said yesterday.

"The next hundred years will be different for advertising, and it starts today," he continued. And with those humble words, Zuckerberg revealed Facebook’s much-anticipated plans for "Project Beacon" a product the company describes as "social advertising."

In a sense, they're taking a page from the MySpace playbook: Facebook is allowing products and companies to create their own "Facebook Pages." There is, however, one major twist: In addition to Facebook Pages, "the ads will display people’s profile photos next to commercial messages that are shown to their friends about items they purchased or registered an opinion about." (Quote from NYT.)
We've launched Facebook Pages, which are distinct, customized profiles designed for businesses, bands, celebrities and more to represent themselves on Facebook.
Clearly, Facebook understands that they needed to provide a way to link together all the people within their vast and expanding network and the products, brands and companies (who seem very happy about it) that want to connect with them.
Engaging with businesses and buying things are part of your everyday life. Advertising doesn't have to be about interrupting what you're doing, but getting the right information about the purchases you make when you want it. We believe we've created a system where ads are more relevant and actually enhance Facebook. You now have a way to connect with things you are passionate about.
Fred Stutzman, my favourite Facebook blogger, sums it up as follows:
SocialAds = deep targeting using your profile and network data, Project Beacon = your friends (and Facebook) know when you buy stuff on other websites.

Facebook has fulfilled its destiny: it is now Adbook. The data you share in Facebook is incredibly rich. Marketers can target based on your interests (You like Dylan? Buy the box set.) or your friends interests (Seven of your friends love Crocs, buy some Crocs.). Take the internal data, and mash it with the external data collected from Beacon - and you've got some seriously powerful targeting information.
Here's my favourite quote from his post:
In Facebook's dream world, I'll know about every pair of Crocs you buy, in essence constantly barraging me with social purchasing opportunities. But that's not what it's about - just because ads are socially targeted, it doesn't make me want more ads. Rather, Facebook should leverage this extremely powerful social information in my times of need - when I want to purchase something, give me my network's opinion. As Doc describes it, this is "demand finding supply" rather than supply finding demand. Spamminess is the death of a network, socially targeted or not.
Get it?

Louise Story on the New York Times writes:
For example, going forward, a Facebook user who rents a movie on will be asked if he would like to have his movie choice broadcast out to all his friends on Facebook. And those friends would have no choice but to receive that movie message, along with an ad from Blockbuster.
That example makes a good case for what still needs to be worked out with Facebook's social ads:

1. Wouldn't it be better that if I was going to rent a movie on, I could ask my network of friends for recommendations? The ads work in the wrong direction. They assume, in this case, that I want to rent a video from Blockbuster just because you did.

2. Brands like that are destined for the dustbin are going to fill Facebook with crap communications because they've got nothing to lose. As Umair puts it: From an economic point of view, it is a consumer's worst nightmare - ads that are even dumber, less interesting, and far more irritating than ads are already.

3. The other, more subtle reason why this isn't quite right is the fact that it exposes what you've purchased and/or interacted with on Facebook and potentially in other places. Vallywag writes:
With Beacon, Facebook will install cookies onto users' computers to track their activities when they visit partner websites such as eBay, Travelocity, and Fandango. When these users bid on an item, book a trip or buy a movie ticket, Facebook will let the user's friends know in their Facebook news feeds, the stream of friends' activities that greets users when they log in.
To illustrate, Stuzman found a blog from Facebook user and skeptic Matt Monihan, "who is not clearly not a citizen-marketing Fan-Sumer"
So, facebook is now taking a bold step towards pissing me off. Now, I have to think twice before I buy something stupid online. Will my friends be notified that I bought seasons 1 & 2 of project runway? What will they think? Although, part of me wants to buy a bunch of weird items just to mess with people. Coming soon to a feed near you: “Matt just bought a teddy bear, a gallon of play-doh and a fire extinguisher on eBay.
I'm a member of the Victoria's Secret Pink group on Facebook, and I visited that group often. I neither endorse their products nor would I really want people to know that I spend so much time looking (er, better make that researching) things on that network. No, honest, it was research. I swear it! ... Anyway, social ads want to promote my involvement with Pink, and I'm sure they'll be in my face as often as possible to get me to share informaiton and recommendations with my network. I'll be upset by this and my propensity to endorse/recommend will certainly decrease as a result. That's not good for me, for the advertiser, or my network.

GigaOM has a nice summary of the privacy issues posed by this new service as well as a good recap of Esther Dyson's idea of letting people become AdFriends. That's got to be one of the worst-ever marketing buzzwords I've ever heard. That said, Forrester is doing its best to compete: Jeremiah Owyang has coined the phrase Fan-Sumer.

AdFriends? Fan-Sumer? ... Patehtic!!!

The original post is on Facebook's blog. Zuckerberg also said that Facebook had discussed the new program with Microsoft before signing a $240 million deal, but these new social ads are not a part of that deal.

Nick Carr, always on the dark side, highlights Sprite's involvement with Facebook's new social ads in The Social Graft:
The Fortune 500 is, natch, lining up. Coke's in, big-time: Facebook, which distinguished itself by being the anti-MySpace, is now determined to out-MySpace MySpace. It's a nifty system: First you get your users to entrust their personal data to you, and then you not only sell that data to advertisers but you get the users to be the vector for the ads. And what do the users get in return? An animated Sprite Sips character to interact with.
Umair is equally unimpressed on the whole:
Got that? Beacons, for Coke, means, basically, Sprite Zombies flooding your social feed. Uhh...this sounds kind of like, from an economic point of view, a consumer's worst nightmare - ads that are even dumber, less interesting, and far more irritating than ads are already. In fact, I like Nick's take on these dynamics much better: the medium is the message from our sponsor. The irony is so deep it's subterranean. But he leaves out the essential last bit: and most of your so-called friends are carpet-bombing you with it.
One thing is for sure: It was inevitable that an advertising program like this would come from Facebook or one of the other networks. The fact that they accumulate all this data and are all free services made it impossible to avoid.

Lots to think about ...

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Wednesday, November 07, 2007   permalink to archived copy   DiggIt  


great post george- fascinating stuff..

Although it has made me think twice about becoming a fan of 'iris' - who knows how they'll take advantage of me?!
# posted by Anonymous Ben : 11:55 AM, November 16, 2007  

Don't worry Ben. We'd never take advantage ...
# posted by Blogger George Nimeh : 2:41 AM, December 09, 2007  

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