By Abbey Klaassen
Advertising Age
October 23, 2007
NEW YORK (AdAge.com) -- The
invitation, sent to advertisers and agencies in New
York, arrived carved onto a Lucite brick:
"You are invited to a discussion with Mark Zuckerberg
and the Facebook executive team as we unveil a new way
of advertising online."
Facebook is keeping mum about exactly what it is
unveiling at the Nov. 6 event, but ad-industry
executives familiar with the company's plans said the
social network is looking to better use the data its
users voluntarily offer up on their profiles. Of course,
that much seems like a no-brainer (although it's
actually not easy to implement). But less obviously, a
couple of industry executives familiar with the
company's plans suggest Facebook could use some of what
it knows about people -- and their relationships with
others on the site, what is known as the "social graph"
-- to target them off Facebook as well.
Twist on traditional technology
Such a system would be a twist on the traditional
behavioral-targeting technology that is already on the
market. A Facebook representative wouldn't comment on
any specific ad plans.
While the company sounds unlikely to bore down into a
detailed discussion on Nov. 6 as to how it plans to
target advertising to users even when they're not on
Facebook, people familiar with Facebook said it has
detailed such a play as part of its long-term plans.
A recent trademark filing could lend a clue. On Sept.
24, Facebook trademarked the term SocialAds, described
as "advertising and information distribution services,
namely, providing advertising space via the global
computer network [and] promoting the goods and services
of others over the internet." According to the filing,
the trademark concept's first use in commerce was Sept.
20.
Facebook does indeed need to come up with a killer
monetization platform and likely needs it to reach
beyond its domain to justify the valuation of the
company. Current funding negotiations value the company
at up to $15 billion.
Upgrade to earlier system
Facebook has already tried to improve its targeting
capabilities for ads on its own domain. On Sept. 13 it
introduced an upgrade to its Flyers system, which
allowed advertisers to pay based on a cost-per-click
model vs. just a cost-per-thousand-viewers model and to
target users based on profile details such as political
affiliation, work network and keyword.
One person described Facebook's advertising moves as
creating an alternative revenue stream to that of
Google, although it should be noted Google offers a
markedly different targeting service. With two-thirds of
the search market in its grasp, Google has vast amounts
of data about people's intent -- what they are actively
searching for online. It also segments pages based on
the context of those pages. Those two tools are a
powerful combination.
Facebook, on the other hand, has an enormous database of
people's demographics, relationships, likes and dislikes
-- all offered up voluntarily based on what people
choose to write on their profiles. Ideally, it knows
more about its users than many other internet sites,
although some aren't convinced that the data allows
Facebook to determine intent.
Privacy policy
Facebook's privacy policy addresses its ability to use
data to serve ads, but notes it does this without
identifying people as individuals to third parties: "You
can know more about the world around you and, where
there are advertisements, they're more likely to be
interesting to you," it reads. "For example, if you put
a favorite movie in your profile, we might serve you an
advertisement highlighting a screening of a similar one
in your town. But we don't tell the movie company who
you are."
And, of course, all of Facebook's ad-targeting plans
presume people are honest and real about the information
they offer up about themselves on the site.