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11/06/2007
  The Big Lie About Facebook's Ad Data

Today's the day that Facebook unveils their new ad platform. During the past 2 weeks the hype has been huge, with everyone jumping on the idea that Facebook has revolutionary data for doing targeted advertising. Google and Yahoo are paying attention.

Om Malik sums up "Why Google is a Afraid of Facebook":

Facebook, on the other hand, knows a lot more about us [than Google]— who our friends are, what we like, what groups we belong to, and even when we like to use its service. So what can Facebook do with all that information?

Google actually knows all of that, and at least 10X more data about users than Facebook, but hasn't seen the need to really mine the data yet, since search intent has proven to be worth about 100X more than that kind of data so far.

Adsense cookies, myspace profile extracts, toolbar data, google accounts and search engine history are more valuable and far more voluminous than Facebook's data. Google essentially already has the data that the new generation of ISP sniffers hope to get.

Facebook is not very different from MySpace, which Google has been attempting to monetize for the past 12 months. Google has all the data from MySpace profiles that Facebook is talking about exploiting. It hasn't really helped so far.

One of Facebook's beliefs is that they can ask users what they want to see, what products they like, etc. And that this will somehow improve ad perfomance. But the history of consumer polling & research has taught marketers that simply asking customers what they want doesn't necessarily improve ad performance.

Maybe Facebook will find an incremental way to increase eCPM on social networking page views from 15cents to 20cents, but I don't think the pundits and media are correct when they believe the hype about Facebook's new advertising technology.

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