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.
Labels: advertising, facebook, google
¶ 11/06/2007
Henry Blodget and Silicon Alley insider have good commentary on how Google / Yahoo / AOL and Microsoft are grabbing ad spend away from the likes of Time Warner, Viacom, CBS, NYT and other TV, Cable, Print and Radio outlets.
The online companies, in other words, picked up 7 percentage points of market share in a single year....
Traditional media executives--especially in the newspaper business--often blame their current woes on "the real estate market" or "cyclical weakness." Economic weakness may be exaggerating the downturn, but it's not the real problem. Whatever weakness is hitting the newspapers is also hitting Google.
...
These trends are secular, not cyclical: TV networks, radio networks, and newspaper companies won't suddenly wake up one morning and find themselves back in charge. Individual Internet companies may screw up (see Yahoo/AOL), but if they do, others will rise to take their place (Google).
They have a spreadsheet that spells it out in stark numerical detail.
Labels: advertising
¶ 8/21/2007
What's the most important ad technology for 2007? I think it's Behavioral Targeting.
Behavioural Targeting (or BT) is simply the ability to show you ads based on what you do (your behaviour) on the web.
The Wall St. Journal has an article discussing Microsofts attempt to use behavioral targeting in combination with search ads:
If someone types in "compare car prices" on Live Search, Microsoft's computers note that the person is probably considering buying a vehicle. The computers then check with the list of Hotmail accounts to see if they have any information on the person. ... Microsoft says that in testing in the U.S., behavioral targeting increased clicks on ads by as much as 76%.
Microsoft doesn't really matter much, especially in search. The biggest player in BT is Yahoo!, since they have the most email users and a broad network of content sites. Google could start to do it more as well, mostly based off of your search history, though they've mentioned they won't use it with AdSense. Tacoda is the best known, and probably biggest 3rd party ad network which touts BT more than anyone else.
Behavioural targeting is important because it works and when you have a huge database of peoples interests from their click stream and email, you can really improve ad response rate. In 2007, you should see a lot more offerings, a lot more proof that it works, and the price should go up a lot too!
Labels: 2007, advertising, predictions
¶ 12/28/2006
