Facebook ads are here whether you like it or not. On Nov. 6, 2007 CEO Mark Zuckerberg unveiled the new plan entitled Beacon. “Facebook Ads represent a completely new way of advertising online,” Zuckerberg said (Facebook). It is clear that Facebook is going to turn some heads with this revenue model but what is unclear is how successful it will be – either for advertisers, Facebook, or most importantly, users.
Facebook has always founded its success and differentiated itself from its big brother, MySpace, by maintaining a clean ad-free interface. Facebook has been garnering a notably more mature member base, and presumably with that, more business professionals interested in building an online business referral network – this may be due in part to their lack of ads and clutter. But perhaps business professionals looking to use large social networks like Facebook for business connections will think twice before inadvertently sending a potential customer lead a subtle product endorsement that has nothing to do with their business. According to mashable.com, “Now both MySpace and Facebook are offering ad networks, and frankly, the implementation of MySpace’s may be more effective (Mashable Article).
Now that Facebook is switching gears they can expect advertising revenues but at what price? The ad system is going to work a lot like its already popular wall postings. Currently users write comments on their friend’s walls (profiles) to communicate. With the new ad system, if one of your friends comments about a brand or product, a picture of that friend endorsing the product may show up on your page. Even more notable is that the system will track your visits to third party websites using cookies. Don’t be surprised if your picture ends up next to a Pepsi bottle on all of your friend’s Facebook pages. Of course there are undoubtedly going to be privacy issues. Will we see a drop in average user age as a result? Will LinkedIn remain as the only mature social networking site? Once again we see a reason for niche networks as the answer to building an effective online referral marketing system using existing personal connections.
Privacy advocates and attorneys alike are already in a lather about the controversial new plan. John Gartner explains, “Facebook’s new SocialAds may be illegal according to a New York attorney. The law prohibits use of someone’s image with written consent, which could derail SocialAds” (Marketing Shift). Not exactly the best system for business networking professionals to adopt.
Privacy issues aside, this could be an effective and personal way for companies to make connections with consumers. But how will this affect Facebook’s end user experience? One view is that Facebook is already somewhat cluttered without Beacon and that the full circle marketing is downright absurd. According to Nick Carr of Techcrunch, “It’s 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” (TechCrunch).
Facebook has done quite well, so I believe they may have a trick or two to make this work. But as it stands I see a serious brand conflict and more importantly there is minimal benefit to their users. Carr points out rightly that “Beacon is essentially a biased market mechanism. That is, advertisers have control - but connected consumers (despite Facebook’s hype) don’t” (TechCrunch). With a plethora of alternatives its hard to believe users – especially business professionals looking to grow their business referral network, will put up with too much clutter before they jump ship for a more relevant niche site.
What do you think?