People tend to compare Facebook to Microsoft since both are very closed platform, rather than Google which new slogan is sort of “we’re open”(since the “don’t be evil” kind of went hay wire). With today’s Facebook Ad platform, they are more like Google than ever before. No, not because the both profit from ad, but because they managed to turn their greatest asset into $$$$ (or at least they are planning on it). Google’s greatest asset would be search, so all they did was connect those results to paid results thus getting “relevant ads”. Facebook has done exactly the same thing. Rather than try to copy some other business model, they’ve created their own, based on their flagship technology “the social graph”. Facebook is a technology company: they develop and release technological innovations that lead to money. They are basically is going to leverage their gold pot in three ways:
-Social Ads: Profile targeted ads based on people’s age, gender, relationship status, education, company info, interests.
-Beacon: Ad widgets that would go on an advertiser’s page (say amazon) that allows you to “endorse” a product as you purchase it. It’s going to be integrated into feeds very soon.
-Insight: Sort of a marketing database (like google analytics) that allows advertisers to see what type of people are clicking on the ads (anonymously).
This is a very though out strategy. It makes me wonder why myspace or yahoo didn’t come up with it first. Instead advertisers got “Panama” from the makers of the web directory. Which is nothing else other a Adwords knockoff. Nobody ever made a fortune by being a follower (except some guys in Redmond). This is the kind of innovation that makes advertisers wet in their pants.
OpenSocial is cool since it’s open, but this is just terrific. At the end, the winners are not going to be just the “responsible advertisers” but the consumers themselves, since they are going to get more of what they really want. That is if the advertisers are smart enough to pay attention to the data.
This is the evolution of responsible advertising. Adwords made it popular. Facebook is making it easier to target.
UPDATE: apparently myspace does target users using their data. I really don’t care much for myspace since I am a facebook user myself.
(Via TechCrunch.)