4 ms·

This article is more alarmist about this than is really justified (IMHO). What they're talking about is Facebook creating a display advertising business, a move

by cletus 14y ago

This article is more alarmist about this than is really justified (IMHO). What they're talking about is Facebook creating a display advertising business, a move so natural (IMHO) that I'm surprised it hasn't happened yet. I'm just this will rattle the tinfoil hate brigade but this certainly isn't "selling your data" as such. Publishers would make a call to FB Ad servers that based on whatever algorithm they choose, would then serve you ads, just like every other display business. Facebook, in addition to knowing what you do, what you've liked and who you're connected to on Facebook, also has a history of pretty much every Website you've visited since they introduced the "Like" button. The comparisons to Google's intent-based advertising on Google search is somewhat misleading as this business would be closer to, say, Google's DoubleClick, a much smaller business that operates on CPM rather than a CPC basis. If Facebook operated a display business on a CPC basis, that would be noteworthy. I agree with the revenue estimate of adding as much as $5 billion a year. I came up with the same figure myself at Facebook's IPO to give myself a price target of $12-15 (assuming a gross margin of, say, 20%). That estimate might be low but it's not that far off the (current) mark. Personally I view these two data sources as: 1. What you say: behaviour on Facebook; and 2. What you do: the sites you visit. (2) is what display advertising has been built on to this point and (IMHO) can present a very accurate picture of what your interests, etc for ad targeting. (1) is the big unknown. My personal opinion is that the value of this data is a lot less than many predict. Actions speak louder than words. My own experience with Facebook is that it presents a narrow view of yourself (in most cases), presents the world how you think you're perceived or how you'd like to be perceived or both. The problem is that so few people are data producers. Most are data consumers. It's the whole review problem with local: your audience is so small that getting any reviews is hard and no matter what you do (IMHO) the majority of people just aren't going to go around recommending or "Liking" their local plumber. So time will tell on the value of social signals. I for one am moderately bearish. Disclaimer: I work for Google in display advertising. All of the views expressed are my own and do not represent the views of Google.

tubbo 14y ago
I know you probably know a bit more about this than I do, but Facebook has turned its userbase into producers. They produce content whether they like to or not, sometimes. Facebook Likes are also a big thing, people like pages to receive content (like a "follow") but these likes are actually telling Facebook more about the user. In addition, many people click links on Facebook, which are tracked by Facebook, so Facebook actually has both of these sources of data, by your definition(s) of what they are. Perhaps Google has more data on us on #2, but they have much less than Facebook does on #1. I'm also of the opinion that time will tell on if #1 is as valuable as many believe, however, I question whether machines and algorithms can paint better pictures of ourselves than the data we voluntarily give away?
sek 14y ago
This space is very competitive, if FB ads earn publishers significantly less than DoubleClick then nobody will use it. It's a numbers game. Google is in this space for almost a decade now and it's still small compared to Search. The big thing for Facebook was always their gigantic inventory, never so much the information. They have a few advantages here, but i think Age + Location + Sex are still more important than all your likes together.
- jQueryIsAwesome 14y ago
  The correlation with institutions is also a very useful to figure out someone's economic situation. For example if all your friends are in Harvard chances are that you are not poor; and that ads about expensive/luxury services will convert better than for most people.
  - chimeracoder 14y ago
    > For example if all your friends are in Harvard chances are that you are not poor; and that ads about expensive/luxury services will convert better than for most people. Perhaps, but a better predictor would still be whether or not the person has searched for anything related to luxury goods in the past, thereby demonstrating not only ability, but actual intent as well.
saumil07 14y ago
Can you dig into (1) a bit more? Agree that most people are consumers not producers - but FB cleverly and incessantly worked towards making the most hardened consumer into a producer (Like being the first incarnation thereof). Half that site's audience visits every day. They like brand pages and friend's posts. They disclose location when they upload photos. All of this is low-friction data production unlike the review example you use above (most people are terrible at writing original content unless absolutely required to do so).
fkdjs 14y ago
This is what we've all been waiting for: CPM ads based on age and gender. This is the holy grail advertisers have wanted. But it remains to be seen if this information actually translates into better online advertising. We will soon see. I'm skeptical. I am almost positive that this won't lead to better CPMs, higher click throughs. This might make brand advertisers, who don't care about that stuff, happier.. but still won't want to put ads on a penis growing forum. TV is what they like. So yeah, we'll see, but I'm not expecting much.
wilfra 14y ago
Tubbo, you've been hellbanned for months. Nobody can see your posts... (really dislike that method of banning people - he has pages of thoughtful contributions)
anonymouz 14y ago
> Facebook, in addition to knowing what you do, what you've liked and who you're connected to on Facebook, also has a history of pretty much every Website you've visited since they introduced the "Like" button. And unfortunately they refuse to produce this history when asked (as is required by EU privacy law). In any case it should be interesting to see how they will implement this: Their tracking like button seems to have survived largely based on the fact that people don't know about the tracking. When it comes under scrunity from privacy commissioners (for example in Schleswig-Holstein in Germany), it unsurprisingly seems to be considered to violate privacy laws. Without a similar mechanism it will be hard to serve personalized ads, but general awareness of Facebook's (and other's) privacy practices seems to be growing...

by cletus 14y ago

tubbo 14y ago

I know you probably know a bit more about this than I do, but Facebook has turned its userbase into producers. They produce content whether they like to or not, sometimes. Facebook Likes are also a big thing, people like pages to receive content (like a "follow") but these likes are actually telling Facebook more about the user. In addition, many people click links on Facebook, which are tracked by Facebook, so Facebook actually has both of these sources of data, by your definition(s) of what they are. Perhaps Google has more data on us on #2, but they have much less than Facebook does on #1. I'm also of the opinion that time will tell on if #1 is as valuable as many believe, however, I question whether machines and algorithms can paint better pictures of ourselves than the data we voluntarily give away?

sek 14y ago

This space is very competitive, if FB ads earn publishers significantly less than DoubleClick then nobody will use it. It's a numbers game. Google is in this space for almost a decade now and it's still small compared to Search. The big thing for Facebook was always their gigantic inventory, never so much the information. They have a few advantages here, but i think Age + Location + Sex are still more important than all your likes together.

jQueryIsAwesome 14y ago
The correlation with institutions is also a very useful to figure out someone's economic situation. For example if all your friends are in Harvard chances are that you are not poor; and that ads about expensive/luxury services will convert better than for most people.
- chimeracoder 14y ago
  > For example if all your friends are in Harvard chances are that you are not poor; and that ads about expensive/luxury services will convert better than for most people. Perhaps, but a better predictor would still be whether or not the person has searched for anything related to luxury goods in the past, thereby demonstrating not only ability, but actual intent as well.

saumil07 14y ago

Can you dig into (1) a bit more? Agree that most people are consumers not producers - but FB cleverly and incessantly worked towards making the most hardened consumer into a producer (Like being the first incarnation thereof). Half that site's audience visits every day. They like brand pages and friend's posts. They disclose location when they upload photos. All of this is low-friction data production unlike the review example you use above (most people are terrible at writing original content unless absolutely required to do so).

fkdjs 14y ago

This is what we've all been waiting for: CPM ads based on age and gender. This is the holy grail advertisers have wanted. But it remains to be seen if this information actually translates into better online advertising. We will soon see. I'm skeptical. I am almost positive that this won't lead to better CPMs, higher click throughs. This might make brand advertisers, who don't care about that stuff, happier.. but still won't want to put ads on a penis growing forum. TV is what they like. So yeah, we'll see, but I'm not expecting much.

wilfra 14y ago

Tubbo, you've been hellbanned for months. Nobody can see your posts... (really dislike that method of banning people - he has pages of thoughtful contributions)

anonymouz 14y ago

> Facebook, in addition to knowing what you do, what you've liked and who you're connected to on Facebook, also has a history of pretty much every Website you've visited since they introduced the "Like" button. And unfortunately they refuse to produce this history when asked (as is required by EU privacy law). In any case it should be interesting to see how they will implement this: Their tracking like button seems to have survived largely based on the fact that people don't know about the tracking. When it comes under scrunity from privacy commissioners (for example in Schleswig-Holstein in Germany), it unsurprisingly seems to be considered to violate privacy laws. Without a similar mechanism it will be hard to serve personalized ads, but general awareness of Facebook's (and other's) privacy practices seems to be growing...