Erick Schonfeld
Within hours of Facebook¹s announcement of its social advertising plans, the
backlash began. What about privacy? What about relevance? (I know everyone
is sick of hearing about Facebook, but there are some important business
issues at stake here, so bear with me). As far as privacy goes, there is
none on Facebook, in that any information you share is fair game for
targeting by advertisers. So get used to it. You don¹t want to be targeted,
don¹t share information on Facebook. Perhaps the more important question,
though, is around the relevance of the ads themselves.
Already, there¹s been some insightful critiques on this front. Nick Carr
started things off with his tart summary: ³The medium is the message from
our sponsor.² He goes on to point out that becoming a fan of a animated
Sprite can is not exactly a revolution in advertising: sprite-sips.png
It¹s a nifty system: First you get your users to entrust their personal
data to you, and then you not only sell that data to advertisers but you get
the users to be the vector for the ads. And what do the users get in return?
An animated Sprite Sips character to interact with.
Henry Blodget asks, not unreasonably: Will advertisers pay people to
recommend their products to friends? (That would be a bad idea, but you
never know what Madison Avenue will try to do next).
And Umair Haque warns of adverse selection with Facebook ads that are
presented as updates to people¹s feeds (aka Beacons). Excerpt:
Yes, we all know referrals are powerful. But real referrals aren¹t what
Facebook¹s offering. Real referrals aren¹t broadcasting preferences; they
are matching preferences. See the difference?
Beacon is essentially a biased market mechanism. That is, advertisers
have control - but connected consumers (despite Facebook¹s hype) don¹t.
The synthetic relevance Facebook is pushing is a drug for the strung-out
advertisers of the world: they desperately need a hit of something to make
them believe they matter again.
As advertisers buy into Facebook - no one will be better off - except
Facebook.
Marketers and firms won¹t gain true connection with consumers.
And, crucially, consumers will be trapped into not just receiving crappy
ads - but sending them as well.
These are all valid points. The best referrals come from people who know you
have a particular need or are looking for something. They usually come out
of a conversation. ³Have you seen any good movies lately?² ³Oh yeah, just
last week we rented . . .² I only want referrals when I need them. If all my
friends and casual acquaintances start bombarding me with referrals that are
not matched to what I need, that could very quickly just become another
source of noise I need to filter out.
And yet, it is just too soon to tell where all this will go. Granted, many
of the advertising partners that have jumped on board this bandwagon are
faceless consumer products companies. I am not sure I want to be a fan of
Sprite or Chase or Verizon (and I am a customer of all of these brands). But
some of the partnerships do make sense. I don¹t mind identifying myself as a
fan of the New York Times.
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