Amidst great fanfare, Facebook last week launched its new landmark advertising set-up, disappointingly called just “Facebook Ads”. Microsoft’s recent purchase of a 1.6% stake in the social networking site for a whopping $240 million raised a few eyebrows: Facebook is obviously very popular, but it was unclear how they were actually going to rake in the cash. This new scheme might answer that.
How does it work? Quite simply, companies will be able to build their regular Facebook profile, just like me and you, and add profile details, photos, applications etc. Users then become fans of the company/product, interact with it e.g. write on its wall etc. At this point, the word is spread as other users start seeing references to the product in friends’ news feeds. This in itself obviously isn’t quite enough to justify the effort. So this is where the clever bit comes in. Facebook will also allow “social ads” to appear in users’ news feeds: these are a combination of a relevant action by a friend with a short ad message pointing to the product profile. We don’t have the details yet but presumably the targeting is complex and takes into account the action performed (group joined, review made etc?) with as many factors as possible, like sex, location, network, groups, friends, applications etc.
So how exciting is this really? To marketers, very. How could it not be? It’s marketing to a pool of 52 million consumers who mainly fall into high-income demographics. And it’s leagues ahead of Google AdWords in terms of targeting. Plus users are given the chance to interact with the brand, which as we all know is a must amongst picky consumers in the Internet age. It could still all go wrong. If the targeting isn’t done properly and the system gets clogged with ads that users will think are spam, marketers will run a mile. And users will not forgive Facebook in a hurry. But the guys at Facebook are smart – I think it’ll work. If so, it’ll certainly be part of many future projects on our side.