Facebook’s ads and standards in social network advertising November 3, 2007Posted by jeremyliew in advertising, facebook, social media, social networks, strategy, widgets.
Facebook is launching its new ad platform on Tuesday at ad:tech.
Facebook is reportedly launching Pandemic, which is a program for advertisers to buy pages. It looks to be somewhat like a sponsored page system, and will offer an additional option for sponsored groups that advertisers can set up. The sponsored pages will have games and other applications that users can interact with.
More coverage from Venturebeat
Techcrunch says that there is more to the platform:
Beacon is the internal project name at Facebook around an effort to work with third parties and gain access to very specific user data. An example may be a purchase of a book or DVD from Amazon. Under Beacon, the fact of that purchase will be sent to Facebook and automatically included in the user’s News Feed.
At the point of sale on the third party site, the user will see a “toast” popup asking them if they approve the sale information being included in their Facebook News Feed:
The feed information includes the user name, what they did (bought something), what they bought, and where.
Both sound like exciting innovations. These new forms of advertising will help close the gap between the % of time spent on social networks and the % of ad dollars spent on social networks. It is inevitable that there will be a large advertising market for social networks
To understand if there is an advertising model for social networks and their widgets, you have to ask two questions:
1. Is this a mass market medium?
2. Is there value to an advertiser in having a user willingly affiliate herself* with their brand?
* e.g. Friending Scion in Myspace, or joining an “I love my ipod” group on Facebook, or skinning their personal photo slideshow with a Casino Royale theme on Rockyou.
The answer to these questions is clearly “Yes”. Based on that, I’m confident that we’ll see a large new form of advertising emerge over the next few years. Exactly when that occurs will largely depend on how quickly the big advertisers and the big social networks and widget companies can arrive at a standard for what form this social network advertising will take.
However, as I’ve noted in the past, new forms of advertising are hard. Before the ad market can really grow rapidly, there needs to be a standard for advertising across the social networking industry. When such standards exist, ad salespeople only negotiate price. When they do not, they also have to explain and negotiate the ad unit itself. That means that you’re doing business development, not ad sales, and making each ad campaign custom simply isn’t scalable.
Facebook’s new ad platform announcements will be a great step forward for the social networking advertising market, but they are only a first step. Only if and when the rest of the social networks embrace these ad formats (in the same way that they are embracing Google’s Open Social standard) will we start to see real scalable ad sales growth. Facebook, as important as it is, is only one player in the social network ad sales market.