ON FACEBOOK'S SMALL AD AMBITIONS

PIN-POINT MARKETING

Lot of discussion to digest on Techmeme today on Facebook's much anticipated plans for personalized advertising, driven by the "social graph" of it's 50 million users.  The company unveiled it's plans yesterday at a New York gathering for major advertisers and media.

I thought I'd check out what the bastion of traditional advertising, Advertising Age (aka Ad Age), the industry's trade magazine, had to say about the roll-out. 

Their take is succinctly captured in their headline, "Facebook's Big Ad Plan:  If users like you, they'll be your campaign".  Their initial take:

"Marketer reaction ranged from modest skepticism to major enthusiasm."

But mainstream "Establishment" advertisers may not be biggest beneficiaries of the new Facebook advertising initiatives.  There's something else at work here.

Facebook of course hopes that their roll-out is at least as media shaking as Google's roll-out of AdWords and AdSense not so long ago.

While Google turned a whole lot of businesses, initially small then large, into text-based advertisers, Facebook hopes to turn consumers into active and passive advertisers and endorsers.

In Google's plan, there was incremental money for these budding, new advertisers.

In Facebook's plan, there's the user satisfaction of evangelizing their tastes to friends and families. 

Not unlike when millions of consumers worldwide chose to advertise their preference in a brand of jeans on their butts in the real world.

So there is mainstream precedent for established brands.

Over time, there may even be extra money for every-day Facebook users hawking products and services to those close to them. 

Amway 2.0 or Redux if you dislike the whole 2.0 thing. 

Or Tupperware parties 2.0. 

Or "Social Graft" as Nick Carr aptly describes. 

Or "Friendly Spam" as it'll likely feel like at times.

While the Facebook presentation yesterday highlighted major brands like Coke as examples, I suspect the real legs in this thing may be really the nexus of small and local businesses/services and local users/consumers.

Those are the businesses and services that consumers locally have the most inefficient markets to find and transact with...those are the businesses that can potentially benefit the most from personal recommendations from people in one's social graph.  Word of mouth, 2.0.

For this to work big, small businesses and service providers need to embrace Facebook and create their presence on Facebook's web with as much zeal and enthusiasm as college kids and mainstream adults have done over the last few years.

It works particularly well for local businesses and services, since Facebook's 50 million users, with their real-world identities, are firmly rooted to physical locations where their networks past and present, lie.  Local 2.0 as it were.

We'll soon see how wide and deep this can truly spread, for businesses both small and large.

Update:  Umair at Bubblegeneration has a take on all this that's worth a close read.

Comments

[Alex Tolley]

The Umair link is good - I think he is spot on. See also this link from c|net:

http://www.bbc.co.uk/science/space/spaceguide/skyatnight/proginfo.shtml

It's pretty clear that Facebook is going for the "big hit", a huge valuation that has to be justified by ad $s. Unfortunately it also looks like a "screw the users" approach. I expect Zuckerberg to be evilly laughing all the way to the bank when he sells out to the deep pocket media.