The fine line between advertising and recommendations

The fine line between advertising and recommendations

Summary: Facebook Beacon has the 'Net riled up over what many see as an invasion of their privacy. A Wall Street Journal article gives a good description of how the opt-out process works: Users can't opt out of the program, called "Facebook Beacon," altogether.

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TOPICS: Privacy
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Facebook Beacon has the 'Net riled up over what many see as an invasion of their privacy. A Wall Street Journal article gives a good description of how the opt-out process works:

Users can't opt out of the program, called "Facebook Beacon," altogether. Instead, they have to opt out on a case-by-case basis when they use one of the outside sites.

Chris Kelly, chief privacy officer of Facebook, said Facebook is transparent in communicating to users what it is tracking. When a user visits an outside site and completes an action like buying a movie ticket, a box shows up in the corner of his Internet browser telling that person the outside Web site is sending that information to Facebook. The user can opt out by clicking on text that reads "No, thanks." If the user doesn't, the next time they visit Facebook, the user will see a message from Facebook asking for permission to show the information to their friends. If the user declines, the information won't be sent.

The problem seems to be that like everything else on Facebook, users are expected to shoulder the burden of sorting through all the various bits of information and deciding what to do with each.

At lunch yesterday, I was discussing the problem of ad-supported Web sites. There's surely an upper bound, but what's worse--advertising distorts everything around it. Web sites start paying more attention to "eyeballs" instead of readers or participants and they're suddenly annoying rather than friendly and helpful.

Facebook realizes that simply relying on the targeted ads of the past won't garner much attention and that they have a tremendous asset in the social graph within their system. Facebook Beacon is an attempt to capitalize on that by using the social graph to make advertising more useful for the customer and more profitable for Facebook.

Unfortunately, they got it wrong. Instead of advertising, they should have focused on recommendations. No one is going to say "please show me more ads based on what my friends like." But plenty of people will ask a friend to recommend digital cameras or books to them.

This may seem like two sides of the same coin, but there are subtle and important differences. First, there's the asking. Asking someone for recommendations puts both parties in a position of giving permission. That changes the feel of the transaction.

Second, and more importantly, most of the people who are my friends on Facebook are probably complete bozos when it comes to buying cameras or LCD TVs. I'm not dissing them, it's just a fact of life that we trust certain people for certain kinds of things. I may trust one friend's judgment on clothes and another's on music.

Facebook has missed out on a tremendous opportunity to use recommendation permissioning to annotate their social graph with trust information--that's an order of magnitude more valuable than the graph itself. I hope they don't figure it out--then I can do it.

Topic: Privacy

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8 comments
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  • Opt-in vs Opt-out, demand generation vs demand fullfilment

    Tx for your very interesting analysis. I agree with you FB's aproach with the Beacon is not the best one, but a very interesting approach to move closer to harnessing the power of recommendations, and probably the best so far to leverage it on a grand scale. Where it is flawed and you are right, it is the opt-out attitude, that has been banned by most direct marketing companies for many reasons I will not detail here. If you provide the right incentive (make it fun and not invasive, gain redeemable points, etc...), an opt-in approach works quite well to gain a large volume of recommentations to put a collaborative filtering system in place (Amazon-like) or just filter it through the social graph so you only get the "ad-like" recommendations of your friends or people from your groups, networks, ... This would be part of "demand generation" vs "demand fullfilment" as FB views it, or viewed from a different angle a gentle "pull" aproach, letting people pull from recommandations from a database. Having a push aproach (people explicitely asking for recommendations from friends on specific issues) will be limited by many factors : first design a clever application that people can use without having to get urls from external websites or sthg similar (something only very good FB app factories like RockYou, Slide or AF83 can do), then limit it to some product categories (like electronics, books, music, Internet access providers, ...) for which the products/services are simple/short to explain and for which a simple rate this/check-the-box answer or short comment can work, and finally find a way to work against the "friend spam" issue : have you often sent queries to your friends asking them for recommendations on specific products ? it works well by 1to1 messages, doesn't apply for impulse buying at the wee hours of night, and specially on big-value products/services.
    Amaury de Buchet
  • Depends

    Given how some internetboobtube videos have people showing how to power a tv set with a AAA battery (give me strength!), it depends on the veracity of the people responding... and on the recipient side, how much people want to look into a product without blindly believing what a group of people think.
    HypnoToad72
  • RE: The fine line between advertising and recommendations

    They've 'soiled' the relationship, asking on one side seems OK, but both?
    shohom67
  • RE: The fine line between advertising and recommendations

    Creating conversation hubs vs. destinations will be the key the referral system you touch on:

    http://senithomas.wordpress.com/2007/11/13/facebook-fan-pages-guide-destinations-vs-collaborative-conversation-spaces/

    Love to hear your thoughts.

    Cheers,

    Seni
    SeniThomas
  • Is this Beacon feature meant for advertising?

    I thought it was meant to be a way to further extend what you could share with your friends with Facebook by allowing sites to extract certain activities you perform into a Facebook friendly format

    - John Musbach
    John Musbach
    • Selling

      It's for selling merchandise and services. Advertising is just a means to an end.
      3dguru
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