Higher segmentation power: Facebook has more personal information about its users than Google and even better it is information that users provided themselves. While Google might know your name, age and gender Facebook knows your marital status, hometown, profession, etc
The social layer: Only Facebook can map your social life. It knows your friends, where you partied last night (through check-ins) and even what your friends are doing who you are most likely to share interests with.
The local layer: Facebook can easily dial in to compete (or potentially cooperate) with Groupon. Think about this: “You and your friend John live on the same block and you both like Rock music, go to this live concert close to you and save $10 each”
Even search: Facebook is getting more and more integrated with Microsoft’s search engine Bing (Microsoft is a minority shareholder in Facebook) and Bing is becoming Yahoo’s search provider. This will enable Facebook to dig deeper into the search layer of users’ activity online. Bing is now the 21st most visited website according to Alexa.
And even Mobile: Facebook is very well positioned to benefit from the hot next thing in mobile advertising. There are more than 250 million users accessing Facebook from their mobile devices
Facebook’s main challenge now is to find an ad format that is more effective than the small display ads they have now which are obviously not very effective.
And here comes the money train for Facebook – As described by Adham not only has Facebook an amazing array of demographic and personal data about you, unlike Google, it could potentially combine the use of this data with real time surfing. Facebook encourage website owners to incorporate “Like” buttons so that users can simply click a button to recommend that page to their friends. However, it is not beyond the realm of reason that FB might actually be using this real-time surfing data to gather information on users surfing habits. This info could then be potentially merged with the users demographic data to show adverts which are not only individually personalized to a specific users’ demographics, but also to what sites they are currently visiting.
ReplyDeleteThere are also rumors of FB developing its own content based ad network, which will allow publishers to place FB ads directly on their pages while getting receiving revenue share from Facebook. This puts FB head-to-head against Google’s Adsense. If Facebook offers higher payouts and more targeted advertisements to webmasters than Google Adsense, then it could have a high chance of attracting a huge percentage of these people. It might be a rumor, but they did ban App developers recently from displaying Adsense ads in their Apps!
Assuming that they do develop a content network for 3rd party publishers to use, the adverts will be using javascript (like Adsense) which will allow FB to further gather information about the users surfing habits, whilst also leveraging the specific visitors demographic data (providing they are logged in to FB or have an active FB cookie). This would allow them to serve highly targeted demographic & behavioral advertising in real-time – Obviously FB would have to overcome one hurdle, and that is what to show visitors to 3rd party sites which are not FB members, but I guess they can scan the page content…. Just like Adsense.
This means that finally FB’s data centre will become open to the world in a usable form creating a very real threat for Google which hasn’t been too successful in its dalliance with social networking tools. Some, like infamous Buzz, backfired and were scrapped. Others have emerged as "social layers" atop other products. Its newest venture ‘Social Circles in Gmail’ -- the one Facebook attacked in its recent anti-Google campaign - tracks the "paths" that connect Gmail users through outside networks like Twitter and LinkedIn.
FB’s current strategy marks its first steps outside its own ecosystem and into Google’s domain. And with rumors abound about Google developing a direct Facebook competitor, this war is certainly far from over!!!
Sources - http://incometricks.com/facebook-money/breaking-news-facebook-is-working-on-placing-facebook-ads-on-websites
http://online.wsj.com/article/SB10001424052748704281504576329441432995616.html
However, there is still at least one good reason for which Google shouldn’t feel threaten by Facebook: Facebook ads still don't really displace search ads.
ReplyDeleteAccording to a Webtrends study of Facebook advertising shows that users burn out much faster on Facebook ads than they do on search ads. This means that once a user has seen an ad a couple of times, they're very unlikely to click on it. In contrast, a search ad can run for weeks or months with no changes because the ad shows up only when users search on the associated keywords, so it continues to rotate through people who have never seen it before. Therefore, and as mentioned in last week’s class, buying the right keywords at the right times is the most important job for advertisers.
Moreover, search is more powerful than any other medium is because it targets users that have explicit purchase intent. That is probably why, according to an IAB report, roughly 45% of online advertising revenues still come from search.