From the submitted article: "Indeed, Facebook hit a legal roadblock in May, when it reached a tentative settlement in a class-action lawsuit over the use of sponsored stories, one of its most effective advertising tools. In the would-be settlement, the company promised to inform users explicitly that their 'likes' could be used as endorsements for a brand or page, and that they could opt out. By one estimate, it could cost Facebook $103 million in revenue." Yeah, that's the problem Facebook has, that many approaches to leveraging user data to maximize advertising impact may be illegal, off-putting to Facebook users, or both.
I have been running AdBlock for a long time on Chrome, and either F. B. Purity or Social Fixer on top of Facebook, and I notice that just since about the time of the Facebook IPO that Facebook advertisements are again showing up as I view my own profile on Facebook. Most but not all of these show up as "sponsored stories." I never like any of the ads. I don't like the "social" ads that mention my friends by name and face (surely without those friends really meaning to suggest to me that I buy the things advertised). I don't like any of the other ads either, and mostly find them completely irrelevant to my interests. I have a friend who used to take elaborate steps to hide keywords in his wall posts (for example, he would use non-ASCII characters to respell words referring to politics or religion), but whether a person does a little or a lot to confuse Facebook, Facebook seems just plain clueless about what kind of ads to serve up, and increasingly clueless about how to provide a satisfactory user experience in general.
Prediction: Facebook will go the way of AOL, still being a factor in the industry years from now, but also serving as an example of a company that could never monetize up to the level of the hype surrounding it.
I bet your prediction is wrong. I've expanded on it elsewhere, but fb is sitting on a couple enormous businesses.
1 - they can launch the first serious adsense ($10B/year pre tac) competitor because they see most people move about the internet on fb connect;
2 - the ad exchange (fbx) is brilliant: you can bring your 3rd party data in and run ads on fb properties. This allows everyone to reuse their retargeting / behavioral targeting data and target in a guaranteed brand safe environment. But no data leaves: fb is a data sink.
3 - adding to the above, they have real demographics for brand advertisers, so they can diversify from the dr people.
4 - adding to #2, they're even better positioned for 2nd screen. Tons of people want to connect desktop/laptop display with mobile, but fb doesn't have to do any guessing or prediction: fb knows all the data because of the shared login. Thus they'll monetize mobile better not just because they know dems, but because they can extend online 3rd party data to mobile via fbx. If nothing else, buckets of dirt cheap impressions for your targeting/bt lists.
edit:
5 - how could I forget gambling? Zynga moves into real money gambling / poker (some relevant court cases have apparently been recently decided) and fb continues to collect a 20-30% tax.
I loaded Facebook when I read this, and I have 3 ads on my timeline page. All 3 are appropriate to my interests.
One of them is for an independent film currently in theaters. Like newspaper ads for movies, it's more an "awareness" thing than a call to click.
One seems to be an app for "news geeks" to see what's most shared on Facebook right now. Interesting, though I''m not immediately anxious to click on it. Still, I now know it's something that exists.
The other is an ad for CalTrans for a fanpage for a study they're conducting on a particular Los Angeles transportation route.
All targeted to me, all at least sort of interesting. All things I'd never search for or have turn up in a google ad.
(I'll provide the opposite single datum, resulting in a thread that neither proves nor disproves the point being made in the article.)
I did the same. I have five sidebar ads (I don't use the timeline): Two directing me to "Mature Singles" (despite the fact that I am in a relationship (though, maybe this is the correct demographic, statistically speaking), one for a local-ish restaurant, despite the fact that I have never (as far as I know) "Liked" any restaurant on Facebook, one for a company offering to help me get a pardon, and one asking me to advertise on Facebook (I think it's a third-party service, not an ad by Facebook for itself; I'm not going to click on it to find out).
This is just as bad (or good) as going to any random site on the internet and ignoring the banner ads there. So the experience isn't terrible. However, for a company that's supposed to be The Big New Thing In Advertising, I think it's pretty disappointing.
I don't use timeline either, and I have six ads, as follows:
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- "Enter to win a Free Lasik Procedure in the Denver Area today!" (I'm not in Denver and my eyesight is fine)
- "Alienware’s first 3D Capable gaming laptop – Get yours NOW" (I've been to the Alienware website recently, fair enough)
- "Cloud Hosting for Websites, Servers, Apps and Storage. Try Cloud Files for only 10¢ per GB!" (Ad for Rackspace, and I already have a cloud server with them)
- "Switch to Verizon and be a part of the largest 4G LTE network in America." (Well, I am using AT&T...)
- "Win Counting Crows tickets in the Get Some Giveaway. Wanna get some? Enter to win." (I've never listened to this band before.)
- "Nonstop service from Denver to New York (LaGuardia) Akron and Dayton starts August 12." (No idea why they think I'm in Denver...)
And the ads reloaded, so a few more:
- "Switch to Viaero for just a buck, and get a free month of service and a dollar smartphone!"
- "Want the Best Smoked BBQ in Denver? Ribs, Chicken, Fish, Crab Legs. We've got it all." (I'm vegetarian!)
- "Get 100+ graphic design concepts in just 7 days. You pick the winner! Check out 99designs!" (I've been to 99designs before, again, fair enough)
- "Searching for answers? 50% Celiacs DO NOT recover with a GF diet! Click & Learn Why!" (I'm not GF; at best, I've researched it lightly.)
- "Buy 2 Original HP® Ink Cartridges and Get 1 Cartridge for Free!" (I might have looked at ink cartridges once or twice in the past couple of months.)
- "Exclusive running & cycling brands at up to 70% off retail prices. LeftLaneSports.com" (I never, ever buy shoes online. I did search to find some local shoes stores about a month ago, though.)
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Overall, I feel the same way as you. The ads are no better than something non-targeted.
I don't use timeline, and with adblock, I never get a single ad in Facebook.
I just got a new laptop and surfed for 10 minutes on the default browser.. I couldn't believe how different the web looks with all the ads.
How does anyone tolerate youtube ads? gmail? facebook? awful.
One is trying to hire me to do C# or .NET programming, which is close to my interests except that I just started a new job (and am not keen on Microsoft languages).
Another is entirely in Chinese, which I suspect is because my profile says I speak Mandarin Chinese. I put that on there several years ago when taking a class, but my Chinese is by this point terrible. Facebook could easily tell I never write in Chinese, but is apparently not using information like that to clean up their targeting data.
The last is some sort of "Free Tickets" thing apparently connected to some restaurant I haven't heard of.
>"“You would much rather hear a message from your friend than hear a message from a brand,”"
Not sure I believe this. I guess it depends on the context of friend.
Sure, maybe if one of my best friends has something to recommend, I'll listen to what he has to say. But chances are it's going to happen in person. If he has a cool shirt? I'll see him wearing it. If he has a new car he loves? I'll go for a drive with him. And if he tries to give me advice on something I know he's clueless about, I'll ignore him.
However, what do I care if a "friend" on Facebook exclaims that they've been using some new product, and they love it? If I don't know this person well enough to speak with them in real life, their opinion is nearly worthless to me. I think I'd rather just listen to the branding.
Agreed but it also depends on circumstances: I've moved around enough that there are people whose opinions I trust that I rarely see in person. Similarly when traveling, I have some acquaintances whose Yelp recommendations are valuable and some I'd give negative weight to because I know our tastes differ – and if I'm in a big metro area for business I'm likely not to meet in person (traffic, schedules, school nights, etc.)
One kind hearted but kind of ditzy friend "likes" everything under the sun. Result, I see a promotion for HP ink jet cartridges because she likes HP.
Both obvious promotion/manipulation, and utterly meaningless to me and, I suspect, all of her other friends. Fail.
I took a screenshot with the intent of mailing it to her and saying/explaining, 'See, this is what all you quasi-random liking gets you, and your friends.'
I suspect that once she sees it in "black and white" (more than one pun I could start to appy, here), that will be the end of that.
If not, people are probably going to start turning down the "dial" on her stream of posts.
All I know is that a tiny little startup I work for got called, called, by a human, human, at facebook, trying to get us to advertise with them a few weeks ago.
Oh? Care to elaborate? Were they offering a deal of some sort?
That's very interesting. And, I agree, if Facebook has begun to stoop to the level of ad sales people cold-calling small businesses, things are not well.
But while his call could be from FB, the call that we received to me sounded suspiciously like a third party or possibly a company trying to get a leg in by making you think they are facebook when they are just a company offering to help you with FB advertising. This actually happens with some frequency with people trying to claim they are google when they are just trying to offer consulting around what google offers.
(Next time it happens I will attempt to not hang up and dig a little deeper. But it is not unusual for third parties to make reference to a known company and throw their name around. Back in the day this was actually quite common with copier dealers claiming to be Xerox.)
Kind of tangential to the article, but I often wonder why facebook has not tried the "freemium" model at all.
I'm not suggesting they do the typical freemium model, which would be to offer users the option of paying to get rid of ads. Instead, I think they could try charging based on usage (kind of like heroku). They would have to keep the service free for the majority of users, but I think they could get by with charging super-power users; I.e. the ones who can't live without the service. I know many people that would fall into this category, and I'm sure they would be willing to pay $5/month if it meant keeping their facebook.
Can anyone tell me offhand when Facebook's lockup period for employee stock sales ends?
I've always assumed that their stock is going to get hammered when the lockup ends, and I want to be ready for it (i.e. have money in my Fidelity account to snap some up).
"There is such disagreement over whether Facebook is the next big thing on the Internet or whether it’s going to fail miserably.”
Who are the people having this type of conversation? Why would a company like Facebook, with billions of dollars in revenue and hundreds of millions of users be on track towards "failing miserably"....Simply for being tied to a $100 billion valuation? Perhaps the valuation was lofty but I don't see a company like Facebook outright failing due to greedy investors.
While it is true that they will need to show their ability to grow, FB ads are already a proven platform that many advertisers have built staggering success on.
I say we just leave that alone and focus on the growth of the platform - that is what matters most. They are already proven to work.
I have been running AdBlock for a long time on Chrome, and either F. B. Purity or Social Fixer on top of Facebook, and I notice that just since about the time of the Facebook IPO that Facebook advertisements are again showing up as I view my own profile on Facebook. Most but not all of these show up as "sponsored stories." I never like any of the ads. I don't like the "social" ads that mention my friends by name and face (surely without those friends really meaning to suggest to me that I buy the things advertised). I don't like any of the other ads either, and mostly find them completely irrelevant to my interests. I have a friend who used to take elaborate steps to hide keywords in his wall posts (for example, he would use non-ASCII characters to respell words referring to politics or religion), but whether a person does a little or a lot to confuse Facebook, Facebook seems just plain clueless about what kind of ads to serve up, and increasingly clueless about how to provide a satisfactory user experience in general.
Prediction: Facebook will go the way of AOL, still being a factor in the industry years from now, but also serving as an example of a company that could never monetize up to the level of the hype surrounding it.