Facebook CEO Mark Zuckerberg last week unveiled the social network’s new ad program to 250 marketers at a much-hyped Manhattan event with this bold proclamation: “The next hundred years will be different for advertising, and it starts today.” Total hype — or at least hyperbole.
|Photo: Steve Maller|
Facebook CEO Mark Zuckerberg has unveiled a new ad program that relies on user recommendations.
Like any new advertising venue, Facebook’s ad system merits a look. But don’t be fooled by the grandiose rhetoric around its revolutionary powers. In fact, out of everything Facebook unveiled last week, the part that’s most interesting may not be the advertising at all. Instead, it’s the way the site is amplifying the myriad unpaid user recommendations and brand affiliations that already go on inside the social network.
“The more you enable person-to-person communication, the more opportunities there are for individuals to influence each other,” said Rob Norman, CEO of Group M Interaction. “This phenomenon already existed. [Mr. Zuckerberg] just poured gas on the fire.”
That “new way to advertise online,” as the unveiling of the ad system was billed, is a user-recommendation system and hyper-targeted advertising play that, when combined, creates something Facebook is calling SocialAds. Under the system, actions users take when they’re not on Facebook, such as renting movies on Blockbuster.com or selling products on eBay, can be broadcast to their Facebook friends. Brands also can create Facebook pages users can interact with, and those interactions are relayed to their networks.
Smart marketers are already starting to recognize the frequency with which people report their affinities for brands on social nets, blogs and personal web pages — and they understand that consumer reviews and trusted recommendations are increasingly important marketing factors. (This has not been lost on the application developers who have been innovating on top of the social network; already there are Facebook applications devoted to displaying people’s favorite brands, purchases and tastes.) And whether or not Facebook is the advertising game changer many thought it would be, its recent moves only amplify that trend.
Facebook has managed to “put the power of recommendation and referrals into a systematic environment,” said Chamath Palihapitiya, VP-product marketing and operations at Facebook. That’s a pretty interesting proposition for marketers but not one they have to purchase. (And that’s perhaps worrisome for Facebook, which needs to prove it can make money through ads to justify its recent $15 billion valuation.)
Meanwhile Facebook’s plans for hyper-targeting paid ads based on user interest and activities were received as, well, kind of obvious. MySpace is sorting its users into interest and activity categories marketers can buy. Both sites introduced self-serve ad systems last week that could greatly expand advertising to smaller, more local businesses. Unlike MySpace, Facebook plans to marry its targeted ads with user-initiated brand references.
Article from Advertising Age, Read More…