4 ms·

The Coming Social Advertising Revolution

20 points by mmaunder 17y ago

gfodor 17y ago
Or, this will be the straw that breaks the camel's back, and Facebook users will finally realize that their use of Facebook comes at a cost. Namely, sketchy ads that follow you around the internet. There's going to be an upper bound on how much Facebook can push the envelope on privacy. Eventually, they're going to hit the point where the users, the publishers, or even the government will not allow them to go any further. Facebook's big gamble is that this upper bound is high enough to allow them to make money off of exposing personal information to third parties. It remains to be seen if this is true, and if it is, if it's sustainable. All it takes is one rogue app developer to harvest some personal information and use it to harm someone to scare people. If the mindset of the public shifts such that people start to back away from posting or publishing personal information, Facebook loses. It's a precarious situation for Facebook, really. Their success hinges upon people being comfortable with losing their privacy. Google has a much better revenue model since it is not tied to there being a conflict of interest between them and their users.
- swernli 17y ago
  >Google has a much better revenue model since it is not tied to there being a conflict of interest between them and their users. I wholeheartedly disagree. Google is also in the business of using any tracking data it can gather on users to deliver ads. Google's primary money maker is advertising, whether in search results or in banner ads. Their customers are not their email/chat/docs users, their customers are the companies that buy advertising. Email/chat/docs users are the product that they sell to advertisers when they promise that the ads will reach an audience. The free services they offer are the honey pot to convince the users to get an account and be tracked. Google is in the same precarious position as Facebook, people just talk about it less.
  - apsurd 17y ago
    people opt-in to google when they use it to search - they want to find something, and if an ad helps them do that, ok! people opt-in to using gmail, gdocs, gchat, because they want to be more productive, and if an ad eventually leads them to do that, ok! Ok maybe this isn't so true but come to think of it, I've never once seen an intrusive non-textual ad in any of those services ... people are not opting in to facebook in search of services or to be more productive. They are there to hang out with their friends. Nearly any ad in that context can be labeled as "not wanted". Let me ask you something, do google text ads really bother you? what about facebook ads getting added to the stream? If yes to either; why?
    - kmavm 17y ago
      "what about facebook ads getting added to the stream?" Does the fact that those do not exist have any bearing on the conversation? I'd find ads mixed into my search results pretty darned troublesome; Google is not stupid enough to do that, though.
  - gfodor 17y ago
    The difference is that Google's various products, unlike Facebook's, provide data that isn't strictly necessary for their ads to be relevant. As their giant pile of money attests, simple targeted advertising based upon search queries is more than enough to build a giant empire upon. They won't wither on the vine if their various other session-based tracking datasets, such as those you mention, are cut off for whatever reason. The same can't be said of Facebook's trove of private information they're apparently banking on selling to the highest bidder. The bottom line is even if there are some short term successes for Facebook via targeted advertising from social network data, they will live in constant fear of a bad news day causing all Facebookers to log into their account and uncheck the "share my personal information with 3rd party sites." It could be an overnight death, at any moment. Those folks might also kill their GMail accounts for the same reason, but they'll still be anonymously searching Google for information and getting relevant ads.
    - swernli 17y ago
      That is a really good point. Google can survive without specific personal data. Facebook cannot, by definition. That is a major factor in Google's favor.
adriand 17y ago
The author of this article talks about how Google's advantage is "intent": people who see Google ads are typically those that are searching for something. The problem is the author then utterly fails to make the case for how Facebook can tap into this, and ends up talking about Facebook's advantage over AdSense, not AdWords - and of course, it is AdWords that are geared towards intent. > If Facebook can use my interests, sex, age, location, who I’m friends with and their age, location, interests etc. to infer that when I’m searching for a ‘bobbin’ it’s probably because I want to tie steelhead flies with it, then it makes more sense for every publisher on the web to use Facebook’s ad network than Google or anyone else because they will simply make more money. The problem with this statement is, how does Facebook know that the person is searching for anything at all? After all, they are searching on Google, not on Facebook.
minouye 17y ago
Fascinating prediction and I can see it happening, but 3-12 months is way too ambitious IMO. I'm not familiar with the inner-workings of the business, but I think they are still pretty lean, and their open reqs don't seem to indicate any plans to grow an AdSense like business anytime soon. http://www.facebook.com/careers/department.php?dept=online-ops http://www.facebook.com/careers/department.php?dept=online-o...
what 17y ago
> Google’s data on each visitor pales in comparison to Facebook. But how useful is Facebook's data really (serious question)? Apart from age, gender and maybe location (which is likely accurate). People like/share/become a fan of so much random stuff, things that don't tell you anything about what they might want to buy or actually be interested in. What do they learn when someone joins a group like "Can this pickle get more likes than Steven Harper" or "I hate when one string from my hoodie is longer than the other?" How many people keep their fan pages or interests up to date? When people have 1000+ "friends" how many of those connections actually mean anything? Let's ignore intent for a moment, how good is their targeting right now? Has an ad within Facebook ever been for for something that you are interested in (purchasing)? I'm not trying to say their data is useless, but I suspect there is more noise than anything else. Not to mention Google probably also knows your age, gender, location, didn't they used to require this information when you signed up for a Google account?
- riffer 17y ago
  Right, but if they get those snazzy Facebook Like buttons on a third of the Top 100 sites on the Web, now they know where you go. And what you do while you there. Hmm.
  - what 17y ago
    Sure, but I would think that knowing what people are searching for is more valuable. Also, based on a quick scan on alexa.com, the top 100 (global) sites are a mix of search engines, social networks, news and porn sites. I doubt the search engines and social networks will adopt the like button and I'm not sure how much you learn about someone's interests based on the news they read and porn they watch. Maybe they'll partner up with Microsoft and monitor your searches on Bing. I think they already show results from Bing when you search on Facebook.
patio11 17y ago
Google has a bit of a secret weapon here: they're using search/display history to personalize ads. This is in a quiet, limited "let's see if we can boil the frog" fashion. What that means is that, if I search for "airfare from Nagoya to Okinawa" (which is a wonderful example of purchasing intent, incidentally), Google is going to try to get a second bite at the apple by biasing my AdSense ads to travel agents even if the site I am currently viewing is not about travel. Facebook has some nice demographic information (a/s/l), but in terms of interests, your search and browsing history is much more accurate than your self-reported interests on Facebook. (Which is, after all, merely the self you want to describe to your friends.) Granted, your recent search/browsing history is not nearly as good as what you typed into the computer 1 second ago, but it will almost certainly perform better than Evony ads and other backfill garbage.
aresant 17y ago
A flaw in this argument is quantifying this statement: "A significant portion of Google’s $27 Billion in revenue this year will come from their publisher ad network" The most recent data I was able to find is that AdSense brings in about 1/3 of Google's total REVENUE. And Google must pay publishers a substantial portion of this revenue which means it's nowhere near as profitable as the core Google.com property. http://www.123jump.com/earnings-calls/Google-Earnings-Call-Fourth-Quarter-2008/31158/ http://www.123jump.com/earnings-calls/Google-Earnings-Call-F...
jackowayed 17y ago
So he's suggesting Beacon, only on every site you visit instead of just Facebook. Given that Facebook users freaked out over Beacon, I can't imagine that working.
- ktsmith 17y ago
  I always picture scenes from Minority Report when I read about Facebook and where it's headed. There was an uproar over beacon in part because it was blatant. It seems that Facebook has learned their lesson and is trying to rebuild beacon much more slowly and more visibly. Look at the types of things that you can't opt out of sharing now for example, or the amount of information that app developers or users of the "open" graph can pull. http://www.youtube.com/watch?v=ITjsb22-EwQ&feature=related http://www.youtube.com/watch?v=ITjsb22-EwQ&feature=relat...
stretchwithme 17y ago
Amazon: Thanks for your purchase. Now tell us which of your friends would also like it and we'll give you a buck. And, don't worry, we'll never tell them you squealed.
- mmaunder 17y ago
  ...but if you aren't back here in a week buying something else we just might.
apsurd 17y ago
Just a thought: don't people love google. I mean in the sense that even non-techy users can look at google and say "wow these guys have changed the world". Or even at the very least, "hey cool, I found it". Doesn't that brand affection count for something? I have never met a non-techy user express love for facebook in the sense that it was doing anything special or even worthwhile. To them it's just yet another way to talk to their friends. Sure it may be the best way, but the perception is that its just a damned messaging interface. A cool contact book. I don't know. Personally as a more tech-savy user, I love google. They have done so much good it makes it hard for me to get upset with them over privacy issues; so many things become pretty trivial. Google made information easily accessible to the entire world. They liberated costly video media by taking on youtube's ridiculously non-sustainable business model. They run goog-411! <3. Google maps is the best, google mail is the best, with google docs i can say goodbye to bloat-ware to write a freaking essay. There's google scholar, google translate, google code, ... they don't have to do any of these things, much less make them freely accessible and zero-cost for the entire world. Oh yeah, then theres little teeny tiny google.org Man I love google, they can have my information anytime they want it. <3 Thanks google! So my point is people can say xyz company is the next Google killer all they want. They can say feature is X is going to turn the tides. But really, perceived brand awareness/trust/loyalty does count for something. Does facebook even have a charity arm?
physcab 17y ago
What I'm wondering is: can't Facebook create intent? If they know my favorite bands and location, can't they sell me concert tickets I might be interested in? If they know I'm in school and who my friends are, can't they not only advertise new places to rent, but who I can rent with depending on similar interests? It seems like they have all the information they need to create intent, they just need to develop that "Oh, I got that through Facebook" reputation.
enjo 17y ago
How does this apply to pretty much any form of local search? It's not enough to know that you're 21 years old and have 50 friends... I need to know that you have a need for a plumber.
scottporad 17y ago
Also...if Facebook takes "messages" and turns them into real e-mail, then that's another huge killer for Google (and Yahoo and MSN). Think of it...markmaunder@facemail.com. Actually, really, think of this...the 15-year old girl that babysits my children...she'd never have a reason to ever leave Facebook. She can socialize, send e-mail, search the web... ...and when she goes out on the web--with, as you say, intent--then Facebook will know exactly how to monetize that intent.
- swernli 17y ago
  Sounds like a return to the AOL model of accessing the internet through a portal. Some part of me likes the idea of a portal by which I access information, but when I stop and think about it, in my mind that portal is the browswer and the data is the raw web. I don't like the idea of a site with personal information directing my use. But I'm atypical: I don't do social stuff, and I tend to use mail clients to download my mail through imap rather than webmail.
- apsurd 17y ago
  Honest question: how is this 15 year old girl going to search the web using facebook? Do you search the web using facebook? How is this possible? Does anyone search the web without ever once querying a big-time search engine?

20 points by mmaunder 17y ago

Or, this will be the straw that breaks the camel's back, and Facebook users will finally realize that their use of Facebook comes at a cost. Namely, sketchy ads that follow you around the internet. There's going to be an upper bound on how much Facebook can push the envelope on privacy. Eventually, they're going to hit the point where the users, the publishers, or even the government will not allow them to go any further. Facebook's big gamble is that this upper bound is high enough to allow them to make money off of exposing personal information to third parties. It remains to be seen if this is true, and if it is, if it's sustainable. All it takes is one rogue app developer to harvest some personal information and use it to harm someone to scare people. If the mindset of the public shifts such that people start to back away from posting or publishing personal information, Facebook loses. It's a precarious situation for Facebook, really. Their success hinges upon people being comfortable with losing their privacy. Google has a much better revenue model since it is not tied to there being a conflict of interest between them and their users.

swernli 17y ago
>Google has a much better revenue model since it is not tied to there being a conflict of interest between them and their users. I wholeheartedly disagree. Google is also in the business of using any tracking data it can gather on users to deliver ads. Google's primary money maker is advertising, whether in search results or in banner ads. Their customers are not their email/chat/docs users, their customers are the companies that buy advertising. Email/chat/docs users are the product that they sell to advertisers when they promise that the ads will reach an audience. The free services they offer are the honey pot to convince the users to get an account and be tracked. Google is in the same precarious position as Facebook, people just talk about it less.
- apsurd 17y ago
  people opt-in to google when they use it to search - they want to find something, and if an ad helps them do that, ok! people opt-in to using gmail, gdocs, gchat, because they want to be more productive, and if an ad eventually leads them to do that, ok! Ok maybe this isn't so true but come to think of it, I've never once seen an intrusive non-textual ad in any of those services ... people are not opting in to facebook in search of services or to be more productive. They are there to hang out with their friends. Nearly any ad in that context can be labeled as "not wanted". Let me ask you something, do google text ads really bother you? what about facebook ads getting added to the stream? If yes to either; why?
  - kmavm 17y ago
    "what about facebook ads getting added to the stream?" Does the fact that those do not exist have any bearing on the conversation? I'd find ads mixed into my search results pretty darned troublesome; Google is not stupid enough to do that, though.
- gfodor 17y ago
  The difference is that Google's various products, unlike Facebook's, provide data that isn't strictly necessary for their ads to be relevant. As their giant pile of money attests, simple targeted advertising based upon search queries is more than enough to build a giant empire upon. They won't wither on the vine if their various other session-based tracking datasets, such as those you mention, are cut off for whatever reason. The same can't be said of Facebook's trove of private information they're apparently banking on selling to the highest bidder. The bottom line is even if there are some short term successes for Facebook via targeted advertising from social network data, they will live in constant fear of a bad news day causing all Facebookers to log into their account and uncheck the "share my personal information with 3rd party sites." It could be an overnight death, at any moment. Those folks might also kill their GMail accounts for the same reason, but they'll still be anonymously searching Google for information and getting relevant ads.
  - swernli 17y ago
    That is a really good point. Google can survive without specific personal data. Facebook cannot, by definition. That is a major factor in Google's favor.

adriand 17y ago

The author of this article talks about how Google's advantage is "intent": people who see Google ads are typically those that are searching for something. The problem is the author then utterly fails to make the case for how Facebook can tap into this, and ends up talking about Facebook's advantage over AdSense, not AdWords - and of course, it is AdWords that are geared towards intent. > If Facebook can use my interests, sex, age, location, who I’m friends with and their age, location, interests etc. to infer that when I’m searching for a ‘bobbin’ it’s probably because I want to tie steelhead flies with it, then it makes more sense for every publisher on the web to use Facebook’s ad network than Google or anyone else because they will simply make more money. The problem with this statement is, how does Facebook know that the person is searching for anything at all? After all, they are searching on Google, not on Facebook.

minouye 17y ago

Fascinating prediction and I can see it happening, but 3-12 months is way too ambitious IMO. I'm not familiar with the inner-workings of the business, but I think they are still pretty lean, and their open reqs don't seem to indicate any plans to grow an AdSense like business anytime soon. http://www.facebook.com/careers/department.php?dept=online-ops http://www.facebook.com/careers/department.php?dept=online-o...

what 17y ago

> Google’s data on each visitor pales in comparison to Facebook. But how useful is Facebook's data really (serious question)? Apart from age, gender and maybe location (which is likely accurate). People like/share/become a fan of so much random stuff, things that don't tell you anything about what they might want to buy or actually be interested in. What do they learn when someone joins a group like "Can this pickle get more likes than Steven Harper" or "I hate when one string from my hoodie is longer than the other?" How many people keep their fan pages or interests up to date? When people have 1000+ "friends" how many of those connections actually mean anything? Let's ignore intent for a moment, how good is their targeting right now? Has an ad within Facebook ever been for for something that you are interested in (purchasing)? I'm not trying to say their data is useless, but I suspect there is more noise than anything else. Not to mention Google probably also knows your age, gender, location, didn't they used to require this information when you signed up for a Google account?

riffer 17y ago
Right, but if they get those snazzy Facebook Like buttons on a third of the Top 100 sites on the Web, now they know where you go. And what you do while you there. Hmm.
- what 17y ago
  Sure, but I would think that knowing what people are searching for is more valuable. Also, based on a quick scan on alexa.com, the top 100 (global) sites are a mix of search engines, social networks, news and porn sites. I doubt the search engines and social networks will adopt the like button and I'm not sure how much you learn about someone's interests based on the news they read and porn they watch. Maybe they'll partner up with Microsoft and monitor your searches on Bing. I think they already show results from Bing when you search on Facebook.

patio11 17y ago

Google has a bit of a secret weapon here: they're using search/display history to personalize ads. This is in a quiet, limited "let's see if we can boil the frog" fashion. What that means is that, if I search for "airfare from Nagoya to Okinawa" (which is a wonderful example of purchasing intent, incidentally), Google is going to try to get a second bite at the apple by biasing my AdSense ads to travel agents even if the site I am currently viewing is not about travel. Facebook has some nice demographic information (a/s/l), but in terms of interests, your search and browsing history is much more accurate than your self-reported interests on Facebook. (Which is, after all, merely the self you want to describe to your friends.) Granted, your recent search/browsing history is not nearly as good as what you typed into the computer 1 second ago, but it will almost certainly perform better than Evony ads and other backfill garbage.

aresant 17y ago

A flaw in this argument is quantifying this statement: "A significant portion of Google’s $27 Billion in revenue this year will come from their publisher ad network" The most recent data I was able to find is that AdSense brings in about 1/3 of Google's total REVENUE. And Google must pay publishers a substantial portion of this revenue which means it's nowhere near as profitable as the core Google.com property. http://www.123jump.com/earnings-calls/Google-Earnings-Call-Fourth-Quarter-2008/31158/ http://www.123jump.com/earnings-calls/Google-Earnings-Call-F...

jackowayed 17y ago

So he's suggesting Beacon, only on every site you visit instead of just Facebook. Given that Facebook users freaked out over Beacon, I can't imagine that working.

ktsmith 17y ago
I always picture scenes from Minority Report when I read about Facebook and where it's headed. There was an uproar over beacon in part because it was blatant. It seems that Facebook has learned their lesson and is trying to rebuild beacon much more slowly and more visibly. Look at the types of things that you can't opt out of sharing now for example, or the amount of information that app developers or users of the "open" graph can pull. http://www.youtube.com/watch?v=ITjsb22-EwQ&feature=related http://www.youtube.com/watch?v=ITjsb22-EwQ&feature=relat...

stretchwithme 17y ago

Amazon: Thanks for your purchase. Now tell us which of your friends would also like it and we'll give you a buck. And, don't worry, we'll never tell them you squealed.

mmaunder 17y ago
...but if you aren't back here in a week buying something else we just might.

apsurd 17y ago

Just a thought: don't people love google. I mean in the sense that even non-techy users can look at google and say "wow these guys have changed the world". Or even at the very least, "hey cool, I found it". Doesn't that brand affection count for something? I have never met a non-techy user express love for facebook in the sense that it was doing anything special or even worthwhile. To them it's just yet another way to talk to their friends. Sure it may be the best way, but the perception is that its just a damned messaging interface. A cool contact book. I don't know. Personally as a more tech-savy user, I love google. They have done so much good it makes it hard for me to get upset with them over privacy issues; so many things become pretty trivial. Google made information easily accessible to the entire world. They liberated costly video media by taking on youtube's ridiculously non-sustainable business model. They run goog-411! <3. Google maps is the best, google mail is the best, with google docs i can say goodbye to bloat-ware to write a freaking essay. There's google scholar, google translate, google code, ... they don't have to do any of these things, much less make them freely accessible and zero-cost for the entire world. Oh yeah, then theres little teeny tiny google.org Man I love google, they can have my information anytime they want it. <3 Thanks google! So my point is people can say xyz company is the next Google killer all they want. They can say feature is X is going to turn the tides. But really, perceived brand awareness/trust/loyalty does count for something. Does facebook even have a charity arm?

physcab 17y ago

What I'm wondering is: can't Facebook create intent? If they know my favorite bands and location, can't they sell me concert tickets I might be interested in? If they know I'm in school and who my friends are, can't they not only advertise new places to rent, but who I can rent with depending on similar interests? It seems like they have all the information they need to create intent, they just need to develop that "Oh, I got that through Facebook" reputation.

enjo 17y ago

How does this apply to pretty much any form of local search? It's not enough to know that you're 21 years old and have 50 friends... I need to know that you have a need for a plumber.

scottporad 17y ago

Also...if Facebook takes "messages" and turns them into real e-mail, then that's another huge killer for Google (and Yahoo and MSN). Think of it...markmaunder@facemail.com. Actually, really, think of this...the 15-year old girl that babysits my children...she'd never have a reason to ever leave Facebook. She can socialize, send e-mail, search the web... ...and when she goes out on the web--with, as you say, intent--then Facebook will know exactly how to monetize that intent.

swernli 17y ago
Sounds like a return to the AOL model of accessing the internet through a portal. Some part of me likes the idea of a portal by which I access information, but when I stop and think about it, in my mind that portal is the browswer and the data is the raw web. I don't like the idea of a site with personal information directing my use. But I'm atypical: I don't do social stuff, and I tend to use mail clients to download my mail through imap rather than webmail.
apsurd 17y ago
Honest question: how is this 15 year old girl going to search the web using facebook? Do you search the web using facebook? How is this possible? Does anyone search the web without ever once querying a big-time search engine?