Yes! And something Facebook certainly does is make me *hate* the advertising. They serve ads based on some sort of algorithm having to do with age, sex, and marital status. I'm a married 32-year-old, and damned if I'm not continually offended by all the Oprah diet ads I get. Diet ads and free-baby-stuff ads.
So not only do I not click the ads, I visit FB less often. It would be *fabulous* if they paid attention to what I'm actually interested in (via my status updates which, of course, come from Twitter).
Ben Parr
· 11 months ago
That's a really interesting point, Kim! Demographic advertising does work, but maybe it should be used as a "disqualifier" of certain ads rather the driver of ads.
Facebook needs to create new ways to gather time-based data on its users. That way it can make ads more relevant in a timely fashion. Maybe they would have more success using keywords inside of status updates rather than demographics and Oprah ads?
Kim Werker
· 11 months ago
Yes. Exactly. (They might find out I love technology, books, and traveling. And, by omission, that I'm not dieting [if they're good, they might discover I'm a good feminist and find the dieting hype online to be totally offensive, but I doubt any contextualized ad program would be that good ;) ] and don't have kids.)
Karyn
· 11 months ago
They already do this, don't they? A few weeks ago I posted on my status update that I was listening to Roy Orbison, of all people; since then I've been bombarded with ads for Big O music and merchandise.
Ben Parr
· 11 months ago
The timeframe for the sale isn't very long at all. The nice thing with Google is that you immediately get the ads at the exact moment you're thinking about it. You are getting residual ads and, while relevant, are only truly useful at the moment you posted that status update. Hitting you right after that would be their best bet with an ad you aren't already blind to.
Jowki
· 11 months ago
Great article mate!
steve
· 11 months ago
i see these social networks like a useful application such as a contact manager or an email program, not some "portal" where i'm searching for information and might click on some related ad. but in that sense of an application, would i click on ads in a side panel in Outlook? no. but what about gmail? how successful are the adsense ads shown on gmail? gmail to me is like a comparable application to facebook. so if gmail ads get clicked on, then facebook should follow the same model, not create these large integrated campaign concepts with brand advertisers.
Advertisers really need to think a bit more strategic and really focus on their campaign objectives rather than buy up display ads and slap up some creative.
Guillaume
· 11 months ago
At last a sensible idea. i found the use of video on the home page quite interesting because it really draws the attention. The ads are not relevant anyway, so why should we look at them??
Elliott
· 11 months ago
What would happen if Facebook stepped out of the box and created a social search component. Creating a human search engine and then Googled it up for their advertising. They have the user base…. Just look at twitter people are already using the social component to get answers instead of searching the web.
Justin Davey
· 11 months ago
Hit up brands via mobile. That's it. Look at Zannel, 5th Finger, etc.
Mark Goldstein
· 11 months ago
1. I'm not related to Seth Goldstein. That said-----on top of the innovation coming out of SocialMedia---I think brands need to offer incremental value and benefits (a loyalty membership) for their online fan clubs or sorts to be successful in the long term----Facebook is one of those places that brands should work to engage with their clients BUT the real action isn't in the Facebook mall----its at the brand store.
Dom
· 11 months ago
Why don't fb just offer a premium photo package? The pic quality is really lame - make it better please!
Simon Firth
· 11 months ago
Amid all the discussion about how to make money from social networking, is it worth asking something more fundamental: why should we expect social networks to make money in the first place?
As I blogged recently (http://simonfirth.wordpress.com/2008/11/12/why-... are other models for building online services of enormous value. And if people don't like being advertised at while social networking, which seems to be a widely held opinion, won't commercial social-networking services always be especially vulnerable to nimble non-commercial competitors? The barriers to entry aren't that high, after all.
That said, I think there are some ways to monetize social networks. Some good ideas were posted on this very site by Alisa Leonard-Hansen last month (http://mashable.com/2008/11/19/facebook-marketing)
Ben Parr
· 11 months ago
The answer: Data.
Facebook has an incredible wealth of data. They know who you are, what you like, what you hate, and who your friends are.
If you have all that knowledge when you met someone for a sale, how tough would it really be to sell them?
Facebook, YouTube, and others need to find a way to transform that data into a sale. It's the presentation part that's stumping people.
alisa leonard-hansen
· 11 months ago
Hi Simon, thanks for the nod
@Ben- to your point about selling the data (which is what my post was about)...the answer may very well lie in Facebook Connect. Connect essentially grants access to that valuable data to 3rd-party sites. One hypothetical is if an e-commerce site is using said graph data as part of their merchandising model (thus creating more relevant shopping experiences), FB would be well within their bounds to charge for that valuable data. There is also value in simply selling anonymized user data (protecting privacy)-- Experian sells such anonymized consumer purchasing data to market researchers to the tune of $5.6 billion a year...
Swizec
· 11 months ago
I think the solution is in fact rather simple. Observe what the user is doing and do something along the lines of "Hey, I noticed you were complaining about your toaster. Mind if I suggest my own toaster as a way of resolving your issue?"
But advertisers don't do that. They'd rather think us stupid and just try shoving anything down our throats.
What we need are data mining algorithms that actually understand the user and make the advertising be useful. Because guess what, when I'm feeling like throwing the old toaster out the window I will happily click on any ad selling me better toasters ;) Hint hint advertiser people, hint hint.
joxmcrox
· 11 months ago
Wanna buy a toaster? : )
Kevin
· 11 months ago
The only advertising problem that Facebook has is the fact that it's not 2010 and they're yet not rolling in massive amounts of money. They've got the users, they've got the data, now all they need is ad inventory. If only they had some way for site owners to get users to log into their sites using their Facebook credentials...
Ben Fremer
· 11 months ago
1) Have Mark Zuckerberg call me 2) See if we can make a deal to utilize this patent I'm working on to build a powerful Facebook-leveraging search engine and some other stuff 3) Acquire me, my other company and my patent and set them up as new divisions: Facebook Search and Facebook Small Business. Assign me to lead the new Facebook Search, Facebook Small Business and Facebook Marketplaces division (there is a cohesive synergy between the three--we can possibly take the Marketplaces division back from Oodle once the other divisions are up and humming) 4) Compensate me in stock equal to Zuckerberg if I succeed in accounting for 85% or more of Facebook revenues or profits from those divisions . Compensate me minimally if I fail. Zuckerberg can focus on the users and the experience, and I'll handle chasing down the dollars from the Fortune 5 Million.
This is a serious offer in principle. If only I could get to step 1...
Tom
· 11 months ago
I loved this post. It set off fireworks in my head, and got all sorts of ideas bouncing around.
Ryan
· 11 months ago
Uhm they could have facebook pro and add value features like if you have pro you can turn of those god aweful app invites. Think no one will pay? You are wrong. People pay 25 bucks a year for flickr pro and its not that great you just get more space.
leku
· 11 months ago
I loved it
Rahul
· 11 months ago
Can anyone suggest me is profitable if I advertise on Facebook at the moment. And can anyone advice me where can I find more information about Facebook advertising other than Facebook site.
william
· 11 months ago
Hail to the Thieves
Facebook Connect, Google Open Social, and twitter the closed source content trap are all a slap in the face to the Open Principals of the internet.
Any developer and proponent of a truly Open web must take an active roll in pushing for the success of Laconica and OpenID and should not help to extend any closed source application.
Today we have no less than 3 closed source companies in a race to become the "Standard" for holding our Identity and therefore having access to the content that we read and creates. These companies will leverage our content to create revenue; giving nothing back to the content owners or to the community.
Why do developers especially Open Source developers continue to build and extend applications for closed source companies that under mind open source standards and ideals ?
Why do users continue to view giving control of their identity and content to these companies as a win, when in fact the win is clearly on the side of the company that you have allowed to take control of your identity and to generate value and revenue from your content. In return for our compliance we do not even have a right to take our identity and our content where we want.
Open Source developers, please do not write any code to extend the propitiatory services of closed source applications . They are not your "Friend" When you write code for these companies you undermine the integrity of the Open Web.
Godfrey Parkin
· 11 months ago
Just because click-through rates are low does not mean there is no advertising impact. Sometimes, when your analytics tell you that you failed, you need to look again to be sure you are measuring the right thing against the right goals. Banner advertising and branded pages are but small components of what can be done in social media environments, and a nominal failure in this context cannot be used to decry the effectiveness of social media marketing as a whole. It is a mistake to take offline marketing concepts and try to shoe-horn them into online environments. Rather, you should look at the environment through your target customer’s eyes, understand the processes that the customer seeks to go through, and try to work out how you can add value in a way that also contributes to your goals. Design a marketing intervention that goes with the flow, or supports the user’s experience, rather than one which interrupts it. In this respect, innovation is far more important than creativity. There is nothing innovative about banner ads, no matter how creative they may be.
Craig
· 11 months ago
I also think Facebook has overall a younger audience base more educated with how online adavertising works. They don't want the advertising, and they don't want to seek it out on Facebook. They know they will see them in google, it's common and when they search they don't mind seeing them. It's not the same experience on Facebook and the advertising is terrible there. I heard the conversion rates are the worst on Facebook and it's easy to see why.
Kevin
· 11 months ago
Facebook advertising is a great way to target the audience you seek. It will continue to be improved and refined. With it it should become a great option for businesses and individuals alike.
Chris Neil
· 11 months ago
1) Facebook needs to have more sales resources... I just went through a frustrating exercise with a client trying to deal with Facebook.
2) Its SOCIAL media. Ads from companies I dont know about things i am not interested in are not going to work. Recomendations about products from friends - now that has more legs. Facebook has some of that now but it is not very sophisticated or targeted.
The targeting side of facebook needs to move away from the TV model were a certain demographic is the target audience - so use the shotgun approach and get the message out there. Targeting within a social network needs to focus on building a relationship, trust and permission.
I still opt in to news feeds and email newsletters, if facebook gets to know me better and asks my permission, i would pay more attention to the ads. If they add in a social recommendation element then it becomes compelling.
Adam
· 11 months ago
It's pretty simple:
On a Google search results page, people click on ads because they're trying to go somewhere else. The results page is already a jumping-off spot.
On Facebook, people are trying to explore their social networks. They're there to read about their friends, not leave.
Adam
· 11 months ago
If Facebook really wants to get its users clicking ads, the ads need to be more connected to what the users are there for.
For example, I should get an ad that says, "Hey, it's Lisa's birthday. Lisa likes Britney Spears, so you should buy her the new Britney Spears CD. Click here to buy it from Amazon.com >>"
Or, "Hey, your anniversary is coming up soon. Buy Courtney roses here >>"
Chun
· 11 months ago
great post! good topic starter.
this ad game involves 3 parties, consumers, advertisers, and FB. consumers won't change, and FB cannot make us change. what they (and all social media sites) can do is to eventually change the way of advertising. the current model won't work, no matter how hard FB tries (and they knew it).
prior to google, there was no search ad model, however, google eventually changed the ad industry. let's keep an eye on FB apps - the giant lab of new ad experiments. I cannot spot the exact "overture" as for google. please name one FB app if you are convinced it's the next "overture" for FB.
Brewster
· 11 months ago
The first thing FB should do is make themselves accessible. I've emailed them twice (since there is no way to actually call them) with questions and got ZERO response! Customer service, anyone? Why they want me to spend my hard earned dollars when they won't even answer some questions is beyond me. I also agree with those who state that FB needs to target specific interest. For example, let's say my cousin Betty has a birthday coming up in a few weeks. Why not have companies offer coupons/discounts for items that Betty has profiled (interested in rock music, romantic movies, traveling, dining at Italian restaurants, etc.) not only to her friends but to Betty. Make it a big deal, like, "Betty, you say it's your birthday? Here's some coupons to local restaurants you might enjoy!", or to her friends, they could offer - "Did you know Betty has a birtday coming up next week, and she really enjoys romantic movies? Why not surprise her with a 3 month's subscription to Netfix and send her some popular romantic movies?" Wow!! Million dollar ideas here for a company that won't even answer my emails. That's what I'm talking about!
JenDV
· 11 months ago
First off, excellent article. Social media advertising sounds incredibly inticing, but just becuase you can potentially target your audience on Facebook (or other sites) doesn't mean that your ad is gong to get through. And Adam has a good point. People go to social networks to socialize! They visit, they check out their friends, and they leave. They're busy. They don't want to be distracted from socializing by ads - relevant or not. So I think advertisers should reconsider their goals - maybe it's enough to get your brand into the heads of the right demographic. Cause facebookers are not going to click. Maybe it's enough that your ad, if relevant, sticks in the back of their mind and one day down the road, as they Google 'where the heck do I get a new toaster', they recognize your brand's website and take a look. But how do you measure that?
Ben Parr
· 11 months ago
That sounds a lot like beacon, JenDV. "Your friend Theresa bought Harry Potter for Mary. Why don't you get her a Harry Potter DVD?"
Remember what happened with beacon? It burned because it revealed to people who got what for X-mas, it took information people didn't want taken, and it became a mini media firestorm.
They'll try again through Facebook connect, but it's not as simple as you said.
Paul
· 11 months ago
Good article and conversation. A few things I would do...
1) Offer a premium service (no ads, more space, better features) for a small annual fee.
2) Make a gift/wish list one of the built in Facebook aps (on the same level as sharing videos and pics). Include ads or affiliate links to those items. It's one of the few reasons someone would want to buy something in a social network.
3) Improve the ability for businesses to interact with their "fans." Facebook pages stink because there's no way (that I can tell) for a business or organization to put something into their "fans" news feeds and therefore no way to draw them back to the page. As the CEO of a small business and leader in a church, I would love to have the same capabilities to post links, pics, videos, status updates for my business and church that would appear in one's fans news feeds in the same way friends do. I would be willing to pay for it that.
runnerr0
· 11 months ago
Two words to respond "Adblock Plus" Oh wait also "NoScript"
Basically for me it plays out like a control issue. Uhm I can choose not to see ads or I can have ads for stuff I don't want shoved down my eyes and ears.. I prefer product placement \ LOLs to traditional ads... actually I think efforts like meat/desire are where is going..BK has been able to get me to shut off the blockers cause guess what I want to see the content...
my 2 c Lex
Craig Berlingo
· 11 months ago
Facebook and other social media sites, as they are currently structured, won't ever have decent click-thru rate -- which should be expected and marketing strategies should adjust for it! These users are passively surfing, with no intention of purchasing. They are in a social space which gives two people some tools to interact, and that's pretty much all they'll want to do. They are not there to shop individually or together (well unless that is the point of the network).
Online marketers have to remember that people don't have their wallets open every time they are on the internet. The only effective kind of advertising in these kinds of environments is branding-related. You'll have much better success letting people know that a movie was just released than, say, magically inspiring them to purchase a new laptop.
Bainzy
· 10 months ago
In the Spring Bainzy.com will be born, a 3rd generation, 3 tier social networking site that has conquered this advertising problem not just conquered it but created a whole new way to generate income for all websites.
Google, facebook and all the rest of them will really have to come up with something exceptional to break through the Bainzy Barrier (TM) Online Advertising method.
Bainzy not only has won this battle it also can celebtrate having 40+ revenue making streams for both user and customer.
When Bainzy arrives on the scene a massive migration from the established networking sites is likely to happen, Bainzy is the work of years of market research into social networking and ground roots marketing to finding out what a user really requires.
Bainzy
· 10 months ago
In the Spring Bainzy.com will be born, a 3rd generation, 3 tier social networking site that has conquered this advertising problem not just conquered it but created a whole new way to generate income for all websites.
Google, facebook and all the rest of them will really have to come up with something exceptional to break through the Bainzy Barrier (TM) Online Advertising method.
Bainzy not only has won this battle it also can celebtrate having 40+ revenue making streams for both user and customer.
When Bainzy arrives on the scene a massive migration from the established networking sites is likely to happen, Bainzy is the work of years of market research into social networking and ground roots marketing to finding out what a user really requires.
Michael Hraba
· 7 months ago
I don't get it anymore. Pages, FB... I just don't think this is going anywhere. You can check out my blog for my recent "what are we trying to achieve with FB?" at hrabaconsulting.com/blog. I am only putting that out there because I want stories how it is going well for people. right now, I am looking at FB as a waste of time. Any other thoughts please let me know!?!
All Comments
Yes! And something Facebook certainly does is make me *hate* the advertising. They serve ads based on some sort of algorithm having to do with age, sex, and marital status. I'm a married 32-year-old, and damned if I'm not continually offended by all the Oprah diet ads I get. Diet ads and free-baby-stuff ads.
So not only do I not click the ads, I visit FB less often. It would be *fabulous* if they paid attention to what I'm actually interested in (via my status updates which, of course, come from Twitter).
Facebook needs to create new ways to gather time-based data on its users. That way it can make ads more relevant in a timely fashion. Maybe they would have more success using keywords inside of status updates rather than demographics and Oprah ads?
Advertisers really need to think a bit more strategic and really focus on their campaign objectives rather than buy up display ads and slap up some creative.
That said-----on top of the innovation coming out of SocialMedia---I think brands need to offer incremental value and benefits (a loyalty membership) for their online fan clubs or sorts to be successful in the long term----Facebook is one of those places that brands should work to engage with their clients BUT the real action isn't in the Facebook mall----its at the brand store.
As I blogged recently (http://simonfirth.wordpress.com/2008/11/12/why-... are other models for building online services of enormous value. And if people don't like being advertised at while social networking, which seems to be a widely held opinion, won't commercial social-networking services always be especially vulnerable to nimble non-commercial competitors? The barriers to entry aren't that high, after all.
That said, I think there are some ways to monetize social networks. Some good ideas were posted on this very site by Alisa Leonard-Hansen last month (http://mashable.com/2008/11/19/facebook-marketing)
Facebook has an incredible wealth of data. They know who you are, what you like, what you hate, and who your friends are.
If you have all that knowledge when you met someone for a sale, how tough would it really be to sell them?
Facebook, YouTube, and others need to find a way to transform that data into a sale. It's the presentation part that's stumping people.
@Ben- to your point about selling the data (which is what my post was about)...the answer may very well lie in Facebook Connect. Connect essentially grants access to that valuable data to 3rd-party sites. One hypothetical is if an e-commerce site is using said graph data as part of their merchandising model (thus creating more relevant shopping experiences), FB would be well within their bounds to charge for that valuable data. There is also value in simply selling anonymized user data (protecting privacy)-- Experian sells such anonymized consumer purchasing data to market researchers to the tune of $5.6 billion a year...
But advertisers don't do that. They'd rather think us stupid and just try shoving anything down our throats.
What we need are data mining algorithms that actually understand the user and make the advertising be useful. Because guess what, when I'm feeling like throwing the old toaster out the window I will happily click on any ad selling me better toasters ;) Hint hint advertiser people, hint hint.
2) See if we can make a deal to utilize this patent I'm working on to build a powerful Facebook-leveraging search engine and some other stuff
3) Acquire me, my other company and my patent and set them up as new divisions: Facebook Search and Facebook Small Business. Assign me to lead the new Facebook Search, Facebook Small Business and Facebook Marketplaces division (there is a cohesive synergy between the three--we can possibly take the Marketplaces division back from Oodle once the other divisions are up and humming)
4) Compensate me in stock equal to Zuckerberg if I succeed in accounting for 85% or more of Facebook revenues or profits from those divisions . Compensate me minimally if I fail. Zuckerberg can focus on the users and the experience, and I'll handle chasing down the dollars from the Fortune 5 Million.
This is a serious offer in principle. If only I could get to step 1...
Facebook Connect, Google Open Social, and twitter the closed source content trap are all a slap in the face to the Open Principals of the internet.
Any developer and proponent of a truly Open web must take an active roll in pushing for the success of Laconica and OpenID and should not help to extend any closed source application.
Today we have no less than 3 closed source companies in a race to become the "Standard" for holding our Identity and therefore having access to the content that we read and creates. These companies will leverage our content to create revenue; giving nothing back to the content owners or to the community.
Why do developers especially Open Source developers continue to build and extend applications for closed source companies that under mind open source standards and ideals ?
Why do users continue to view giving control of their identity and content to these companies as a win, when in fact the win is clearly on the side of the company that you have allowed to take control of your identity and to generate value and revenue from your content. In return for our compliance we do not even have a right to take our identity and our content where we want.
Open Source developers, please do not write any code to extend the propitiatory services of closed source applications . They are not your "Friend" When you write code for these companies you undermine the integrity of the Open Web.
Banner advertising and branded pages are but small components of what can be done in social media environments, and a nominal failure in this context cannot be used to decry the effectiveness of social media marketing as a whole.
It is a mistake to take offline marketing concepts and try to shoe-horn them into online environments. Rather, you should look at the environment through your target customer’s eyes, understand the processes that the customer seeks to go through, and try to work out how you can add value in a way that also contributes to your goals.
Design a marketing intervention that goes with the flow, or supports the user’s experience, rather than one which interrupts it. In this respect, innovation is far more important than creativity. There is nothing innovative about banner ads, no matter how creative they may be.
2) Its SOCIAL media. Ads from companies I dont know about things i am not interested in are not going to work. Recomendations about products from friends - now that has more legs. Facebook has some of that now but it is not very sophisticated or targeted.
The targeting side of facebook needs to move away from the TV model were a certain demographic is the target audience - so use the shotgun approach and get the message out there. Targeting within a social network needs to focus on building a relationship, trust and permission.
I still opt in to news feeds and email newsletters, if facebook gets to know me better and asks my permission, i would pay more attention to the ads. If they add in a social recommendation element then it becomes compelling.
On a Google search results page, people click on ads because they're trying to go somewhere else. The results page is already a jumping-off spot.
On Facebook, people are trying to explore their social networks. They're there to read about their friends, not leave.
For example, I should get an ad that says, "Hey, it's Lisa's birthday. Lisa likes Britney Spears, so you should buy her the new Britney Spears CD. Click here to buy it from Amazon.com >>"
Or, "Hey, your anniversary is coming up soon. Buy Courtney roses here >>"
this ad game involves 3 parties, consumers, advertisers, and FB. consumers won't change, and FB cannot make us change. what they (and all social media sites) can do is to eventually change the way of advertising. the current model won't work, no matter how hard FB tries (and they knew it).
prior to google, there was no search ad model, however, google eventually changed the ad industry. let's keep an eye on FB apps - the giant lab of new ad experiments. I cannot spot the exact "overture" as for google. please name one FB app if you are convinced it's the next "overture" for FB.
Remember what happened with beacon? It burned because it revealed to people who got what for X-mas, it took information people didn't want taken, and it became a mini media firestorm.
They'll try again through Facebook connect, but it's not as simple as you said.
1) Offer a premium service (no ads, more space, better features) for a small annual fee.
2) Make a gift/wish list one of the built in Facebook aps (on the same level as sharing videos and pics). Include ads or affiliate links to those items. It's one of the few reasons someone would want to buy something in a social network.
3) Improve the ability for businesses to interact with their "fans." Facebook pages stink because there's no way (that I can tell) for a business or organization to put something into their "fans" news feeds and therefore no way to draw them back to the page. As the CEO of a small business and leader in a church, I would love to have the same capabilities to post links, pics, videos, status updates for my business and church that would appear in one's fans news feeds in the same way friends do. I would be willing to pay for it that.
Oh wait also "NoScript"
Basically for me it plays out like a control issue.
Uhm I can choose not to see ads or I can have ads for stuff I don't want shoved down my eyes and ears.. I prefer product placement \ LOLs to traditional ads... actually I think efforts like meat/desire are where is going..BK has been able to get me to shut off the blockers cause guess what I want to see the content...
my 2 c
Lex
Online marketers have to remember that people don't have their wallets open every time they are on the internet. The only effective kind of advertising in these kinds of environments is branding-related. You'll have much better success letting people know that a movie was just released than, say, magically inspiring them to purchase a new laptop.
tier social networking site that has conquered this
advertising problem not just conquered it but created a
whole new way to generate income for all websites.
Google, facebook and all the rest of them will really have
to come up with something exceptional to break through the
Bainzy Barrier (TM) Online Advertising method.
Bainzy not only has won this battle it also can celebtrate
having 40+ revenue making streams for both user and
customer.
When Bainzy arrives on the scene a massive migration from
the established networking sites is likely to happen,
Bainzy is the work of years of market research into social
networking and ground roots marketing to finding out what a
user really requires.
tier social networking site that has conquered this
advertising problem not just conquered it but created a
whole new way to generate income for all websites.
Google, facebook and all the rest of them will really have
to come up with something exceptional to break through the
Bainzy Barrier (TM) Online Advertising method.
Bainzy not only has won this battle it also can celebtrate
having 40+ revenue making streams for both user and
customer.
When Bainzy arrives on the scene a massive migration from
the established networking sites is likely to happen,
Bainzy is the work of years of market research into social
networking and ground roots marketing to finding out what a
user really requires.