2007 showed phenomenal growth for “Facebook”,
by the end of the year it had 7.6M active UK users, that’s 12.5% of the
population. With so many active users participating on the social networking site
some form of advertising system to target these users was inevitable.
Social networks such as Facebook create
groups of niche users by gathering some personal information about them, such
as hobbies, interests, marital status, and age. This information is primarily
used to provide users with a compelling and interactive experience, but they
also help build an advertising profile.
What these niche groups create is the
opportunity to target very specific audiences with relevant ads which they may
find interesting. As an advertiser you would expect more ROI or a higher click
through rate if your ads were being served to pre qualified traffic.
Facebook’s ad platform consists of 3 major
types of platforms, Facebook Pages, Facebook Social ads, and Facebook Beacon.
- Facebook Pages - allows brands to have profile pages on in the same way
that users have them.
- Facebook Social Ads - allows advertisers
to use the full range of profile information to target people by age,
gender, relationship status, location, and so on.
- Facebook Beacon - is a widget-like
system being adopted on 44 third party partner sites. Activities on sites
using Beacon will flow back into a Facebook user's News Feed or Mini-Feed,
allowing their friends to know some of what they did at that site.
The basic principle of the advertising platform is similar to
conventional platforms, using Cost Per Click (CPC) and Cost Per Impression
(CPM) pricing models.
I can imagine a lot of UK advertisers experimenting and
trialing the Facebook ad system, and just as Facebook demonstrated phenomenal
growth in 2007 I believe their ad system will prove very popular in 2008.
I expect users to be highly receptive to
these form of ads, my first impressions are that the ads to not lower the user
experience and because the ads are highly targeted the users see them less as
advertising and more as recommendations.
If one of the user’s hobbies is listed as
reading comic books and Formula 1 racing, then ads for Formula 1 merchandise
and reviews about the newest comic book will be seen as recommendations rather
than traditional advertising.