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Innovation

Maybe Google should fear Facebook's ad system

Facebook rolled out its ad system and blurs the line between content and marketing quite a bit. It's a bizarre world where you can count Coca-Cola--or some other Facebook partner--as "friend.
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Written by Larry Dignan, Contributor on

Facebook rolled out its ad system and blurs the line between content and marketing quite a bit. It's a bizarre world where you can count Coca-Cola--or some other Facebook partner--as "friend." It's also a world that could sneak up on Google's platform.

As the Facebook news broke, I couldn't help but be a bit skeptical about the whole thing. Where I come from advertising and editorial are supposed to be separate. Befriending something like a brand takes me into some weird territory (

see gallery right). Nick Carr had the best line of the day when he noted Facebook is more like social graft instead of social graph. Dan captures most of the handwringing among bloggers. One talkback in my post and gallery yesterday used the "S" word--sell out. Rest assured the initial wave of backlash is coming (Techmeme).

But Facebook's crazy idea may just work. After mulling Facebook's system over for a bit, I think the social network may be on to something that's scary on many levels. To users this ad platform is probably the future--you won't escape advertising anywhere. And to folks that hate advertising that's an issue. However, if Facebook customers don't care the social networking up-and-comer is dangerous.

Should Google be scared of Facebook's system?

Judging from Google's recent moves--notably preannouncing an Open Handset Alliance that has nothing to show yet and that OpenSocial alpha code thingy--I'd reckon the search giant is a bit worried. And once I suspend my skepticism about Facebook's ad system for a minute or two I conclude Google should be worried. Let's assume Facebook's system plays well with its users--maybe folks do want to befriend brands and become viral marketing zombies. If Facebook's gamble pays off Google will be worried. Here's why:

  • Facebook has a massive amount of inventory to sell;
  • Marketers have been grumbling about the ROI of keywords;
  • And text ads are extremely impersonal;
  • Advertising is relationship based and you still can't beat word of mouth.

As of this minute, there is no slowdown in text advertising, but there's a reason Google is acquiring DoubleClick: Advertising is more than keywords. Marketers are trying to tap into consumer emotion, be useful and capture some of that Apple magic in a bottle. A keyword isn't going to cut it, but Facebook's system just might.

Once Facebook starts parsing the data, a marketer like Coke can say "hey Facebook I want all the high school kids I can find." Facebook charges a premium CPM, Coke gets the goods and consumers play along. Everyone is fat and happy (including the kids drinking a six pack of Coke Classic a day).

Is this going to creep out Nick Carr and folks like me? You bet. But if there's no Facebook revolt and growth keeps moving forward, no one's going to give a rat's ass about we we puritans say. And Google may be caught flat-footed by advertisers wanting a little more than a text ad and a dashboard of metrics.

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