To compromise with Wall Street, which wants Facebook to create a business model for revenue generation, has finally come out with a two-ronged strategy.
Instead of publishing ads on the Facebook site (and on the mobile app, which is where most of its user base is shifting to), Facebook will use user data to help other sites target you better. The other revenue stream comes from its entry into the ecommerce market with Facebook gifts, which allows for personalized gift recommendations for your friends.
Both revenue sources will be interesting. The gifting service will probably make up less revenue but is a natural extension of the value add Facebook can create given its user data. The off-site ad network can be controversial but also pins Facebook against Google, if in fact it can place ads even more efficiently by leveraging what the company knows about you and selling it to advertisers.
http://techcrunch.com/2012/09/30/no-ads-on-facebook/?grcc=33333Z98ZtrendingZ1Z0Z0Z0Z0&icid=trending9&grcc2=a7afb29e11509f23e8f2d93cf460b4e8%7E1349115358469%7Efca4fa8af1286d8a77f26033fdeed202%7E263cd5f3a76f90b2fcd7529624febcb0%7E1349113895748%7E98%7E0%7E0%7E0%7E1%7E0%7E0%7E0%7E9%7E6%7E6%7E14%7E-1%7E4918653808901108270%7E%7E
Instead of publishing ads on the Facebook site (and on the mobile app, which is where most of its user base is shifting to), Facebook will use user data to help other sites target you better. The other revenue stream comes from its entry into the ecommerce market with Facebook gifts, which allows for personalized gift recommendations for your friends.
Both revenue sources will be interesting. The gifting service will probably make up less revenue but is a natural extension of the value add Facebook can create given its user data. The off-site ad network can be controversial but also pins Facebook against Google, if in fact it can place ads even more efficiently by leveraging what the company knows about you and selling it to advertisers.
http://techcrunch.com/2012/09/30/no-ads-on-facebook/?grcc=33333Z98ZtrendingZ1Z0Z0Z0Z0&icid=trending9&grcc2=a7afb29e11509f23e8f2d93cf460b4e8%7E1349115358469%7Efca4fa8af1286d8a77f26033fdeed202%7E263cd5f3a76f90b2fcd7529624febcb0%7E1349113895748%7E98%7E0%7E0%7E0%7E1%7E0%7E0%7E0%7E9%7E6%7E6%7E14%7E-1%7E4918653808901108270%7E%7E
1 comment:
When I worked at a digital marketing agency, the main problem with Facebook advertising was its scalability. Although the initial targeting is superb and I was able to ramp up traffic/conversion in the first week of campaign launch, the performance declined soon after. This was because Facebook targeted users based only on their basic profile information that we/users do not update often – meaning, the same ads were targeted to the same pool of users over and over again until the value of an ad became near-obsolete (which happens very quickly, within a week). I think it’ll be a huge plus if Facebook can develop a way/algorithm to target users based on their daily posts, pictures, app-usage (for all the applications that are linked to Facebook). Without this, I’m very curious to see how much value-add Facebook can actually bring to the ad network.
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