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After Facebook fails

blogs.law.harvard.edu

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Re: After Facebook fails

#171

Post by bzbarsky »

mike-cardwell wrote: post #102
cletus wrote: post #44

Here's my take on Facebook (disclaimer: I work for Google, these opinions are purely my own and not representative of the company, yadda yadda yadda). Display advertising works best when you have sufficient, quality inventory (publishers whose sites serve ads) such that you attract advertisers in sufficient quantity and quality. Targeting in display ads works because from the publishers, the intermediary has informat…

"Visit any Like-enabled site and you see a small piece of content from Facebook that tells Facebook all the sites you visit. It's a tracking cookie like any other and personally I have no problem with that" I understand that you work for Google and that not holding this opinion would mean that you have to conclude that your employer is also very much in the wrong. But how do you justify it? It's clearly not informati…

There are different levels of "block third-party cookies".

Safari blocks _setting_ third-party cookies by default. It does not block _sending_ of third-party cookies, last I checked.

Firefox's third party cookie setting blocks setting and sending and doing that _definitely_ breaks some sites (e.g. some e-payment systems). Hence it not being enabled by default.

The problem is that the Safari approach is not good enough to prevent the tracking issue where Facebook is concerned: As long as you visited Facebook directly so that it got a chance to set a cookie, that cookie will get sent every time the Like button is fetched. So at that point Facebook knows who you are (via the cookie) and which site you visited (because the Like button itself has access to that information).

The Safari approach _does_ help deal with tracking via ad networks that you don't have any kind of first-party relationship with, since those would never get a chance to set a cookie to start with. So it's definitely a good idea, and I wish more browsers would adopt it. But it doesn't help with the Googles and Facebooks. Unless, of course, there were some sort of requirement that the "user-facing parts" and "ad parts" of those organizations use different domains. Would be pretty hard to get something like that written down properly, even.

Re: After Facebook fails

#172

Post by brandnewlow »

suking wrote: post #145
brandnewlow wrote: post #13

Earlier quoted context omitted.

Two points: 1. There are lots of digital ad tools that have great ROI. No one clicks on ads....until that one time they do. Critics of digital advertising like to hone in on anecdotal examples of online ads failing to support their points. This blog post is a great example of that. 2. Your second point is why Madison Avenue was so horrified by Google when they started selling ads. Tracking the performance of each ind…

Offline ads for direct response are easily measurable with tracking numbers. Branding ads - well - I have no clue how they track any of that - but then again how do you track a CPM media buy just designed to increase brand awareness online... (note: I come from the DM world).

Always looking to meet DM folks. Drop me an e-mail!

Re: After Facebook fails

#173

Post by adamio »

Facebook will figure out the ad problem - and that's the problem.

They're seemingly profitable now on ads (not 100B worth), and through innovation, testing, & learning revenue will grow or at least not disappear. Advertisers will understand how to use Facebook effectively as an advertising media.

The major problem is lock-in. Facebook's users attract other users, which all attract advertisers. Once Facebook and advertisers uncover a breakthrough in effective social advertising, competition for users becomes critical. What will Facebook rely on to keep others from eating their lunch?

Simplistic, but, Google has search and apps. Facebook has....reluctance to change? Which might just be enough, until its not.

Re: After Facebook fails

#174

Post by ma2rten »

gallerytungsten wrote: post #170

Is Facebook going to be the next AOL, left in the dust by a new innovator? The chances of that happening are excellent, in my opinion. However, consider the following revenue streams Facebook could generate using a paid membership model: Facebook Personal - $10/year (no ads) Facebook Pro - $100/year (small business) Facebook Private $200/year (full privacy controls) Facebook Enterprise $500,000/year (enterprise socia…

I don't think this is a good idea:

- Facebook Personal: If there would be a market for this why didn't they introduce this already?

- Facebook Pro: What would they be getting for this money? Facebook is already selling branded pages to corporate partners for much more money.

- Facebook Private: This would be openly admitting that people don't have full control over their privacy on Facebook already. Doesn't seem like a smart move to me.

- Facebook Enterprise: This is a totally different market with different needs. There are already different strong competitors out there. Also, I don't know if Facebook is the best brand for this. It's more associated with distraction then productivity.

Re: After Facebook fails

#175

Post by ma2rten »

jacquesm wrote: post #117
cletus wrote: post #44

Here's my take on Facebook (disclaimer: I work for Google, these opinions are purely my own and not representative of the company, yadda yadda yadda). Display advertising works best when you have sufficient, quality inventory (publishers whose sites serve ads) such that you attract advertisers in sufficient quantity and quality. Targeting in display ads works because from the publishers, the intermediary has informat…

> Whether or not you "Like" things is irrelevant. The main purpose of that "Like" button is (IMHO) as a tracking cookie. Exactly. Ditto google's 'free' analytics, every adsense impression and the +1 button. Nice to see someone working at google establish this in such a straightforward way, such candor is pretty rare. Most of the time all you get is some marketing bull about how you're being enabled to share your favo…

Google, Facebook and Twitter have made clear statements that this data is not used for tracking. ( see http://online.wsj.com/article/SB1000142405274870428150457632... and http://www.google.com/policies/privacy/ads/#toc-serve ). So if it does (and I am not saying it doesn't) they would be outright lying.

Did anyone actually try to investigate if or to which degree this happening? It should be actually be possible to see if there is some correlation between the site you visit and the advertising you see.

Re: After Facebook fails

#176

Post by brudgers »

jbooth wrote: post #166
brudgers wrote: post #139

Earlier quoted context omitted.

"A common misconception from fearmongers is that your data is being sold. It is not. " I'm calling "Srawman" on this. The correct conception is that it could be sold and the Market Economics Fairy has predicted that it will be sold as soon as a willing buyer and willing seller agree on a price. Indeed, if Facebook fails, all their data will almost certainly be sold along with the rest of their assets. Likewise, Googl…

Google wouldn't even consider selling that data unless they were losing money, and they'd probably consider a good many things before they'd resort to selling it even in that case. Right now, Google has that data and nobody else on planet earth does. That's strategic. A couple million dollars isn't worth changing the game. There are companies that sell browser data, it's anonymized, and it's much smaller than what Go…

>"unless"

You, me and The Lorax all agree its possible.

We just hold different opinions regarding under what conditions it is likely to occur. Google or Facebook's proprietary access to the data they have collected only makes strategic sense so long as there is strategic value in exclusivity. Given that there already are a variety of ordinary existing circumstances in which exclusivity is not strategic - e.g. subpoena - the argument that it is only in extraordinary business circumstances that the data might be sold needs a stronger case made in its favor.

We are not talking about a few million dollars, but several billion or more. Just look at patent portfolios for a parallel way in which the market may suddenly revalue intangible assets. Particularly consider the case of Nortel and if Facebook could experience a similar demise over the next twenty years. Even if Facebook stopped collecting data today, most of it would still shed light on living people.

Re: After Facebook fails

#177

Post by ryanmerket »

taejo wrote: post #87
ryanmerket wrote: post #50

Earlier quoted context omitted.

Facebook advertising isn't keyword driven, it's interest driven. AFAIK Facebook doesn't parse your status updates to find keywords -- they look at what you have Liked.

They certainly do look for keywords in statuses (though I don't know if they use them for advertising). At one point they grouped statuses by subject ("Alice and Bob both mentioned Christmas"), and it suggests groups/pages based on your statuses (I mentioned reading something in French in a status, and it suggested I liked "French language").

Yeah I was referring to advertising purposes. Even if they did use keywords in statuses for advertising I would imagine the the weight of those keywords verses the weight of a liked object would be significantly lower since the relevancy would be low.

Re: After Facebook fails

#178

Post by jonnathanson »

maxerickson wrote: post #138
jonnathanson wrote: post #122

Earlier quoted context omitted.

The botttom line with Facebook is that it went public far too early. It doesn't have its footing on solid ground as far as revenue growth, stability, and profitability are concerned. Its advertising model, dependent as it is on these much-maligned targeted display ads, is promising -- but has a lot of kinks to be worked out. The more I look at the Facebook IPO, the more I don't see the conventional narrative, i.e., t…

So by saying that you think they went public too early, you are maybe implying that they could have made much more money later, or maybe implying that public perception of the stock will interfere with their ability to operate. Are either of those things true? Is there some other difficulty?

"implying that they could have made much more money later, or maybe implying that public perception of the stock will interfere with their ability to operate."

I'm implying both. First, if they'd have shrugged off the early pressure to take on too much VC money, they wouldn't have been propped up with an indefinite runway and would have been forced to get creative, and quickly, with monetization. They'd probably be in much stronger shape today, because they'd have had to scale up profitability in line with operating costs and userbase. (At least to some greater extent than they were).

Second, because they're now public, they're having to crash-develop profitability while still being held to the fire to make quarterly projections.

I'm aware of the apparent contradiction in what I'm saying here, i.e., does it really make a difference when their feet are or were held to the fire to grow revenue? At least in my preferred scenario, they'd have been forced to deal with it early. Before growing to 1 billion users -- all of whom expect the service to be 100% free -- and going public to the equity markets -- who expect those users to be monetized pretty much overnight.

Re: After Facebook fails

#179

Post by jbooth »

brudgers wrote: post #176
jbooth wrote: post #166

Earlier quoted context omitted.

Google wouldn't even consider selling that data unless they were losing money, and they'd probably consider a good many things before they'd resort to selling it even in that case. Right now, Google has that data and nobody else on planet earth does. That's strategic. A couple million dollars isn't worth changing the game. There are companies that sell browser data, it's anonymized, and it's much smaller than what Go…

> "unless" You, me and The Lorax all agree its possible. We just hold different opinions regarding under what conditions it is likely to occur. Google or Facebook's proprietary access to the data they have collected only makes strategic sense so long as there is strategic value in exclusivity. Given that there already are a variety of ordinary existing circumstances in which exclusivity is not strategic - e.g. subpoe…

I'm saying it's very low on the list of possibilities. Most of the data is of transient value (browser cookies last around 30 days on average). If Google is whittled down to a shell of its former self, to the point where they'd consider selling that data, presumably what data they have at that point isn't really that valuable.

Re: After Facebook fails

#180

Post by joering2 »

Aramgutang wrote: post #90
a3d6g2f7 wrote: post #54

Earlier quoted context omitted.

Imagine an apartment. Google is like the copy of the yellow pages by the telephone. FB is like the photo-album in the closet. People generally do not open these two books for similar reasons. They have very different usage. One is recreational, the other is not[1]. But FB believers do not want to accept this difference. And it's this difference that makes FB a dud compared to Google. The question I have is what is go…

While I agree with your point, a part of me can't help but wonder about the possibilities that would open up if we had the capacity to extract enough semantic information from a photo: If I'm looking at my old holiday snaps and reliving the good times I had, I might be tempted by an ad for cheap flights to a similar destination. If I'm looking at recent photos of my relatives' adorable children, I might be tempted by…

No you won't. But if you do, then you are the most emotionally unstable and easy to manipulate person I've ever known!!

> If I'm looking at my old holiday snaps and reliving the good times I had, I might be tempted by an ad for cheap flights to a similar destination.

unless you know you have time to take vacation then you wouldn't be tempted.

> If I'm looking at a photo of myself from a time when I was in better physical shape, I might be tempted by an ad for a gym membership.

it doesn't work like that. otherwise, you would see every gym having a huge mirror in front of the door with Arnold Swarzenegger photo next to it saying: "this is how you look, this is how you can look". Have you ever seen any of those??

> etc...

but, ok, lets assume you fall for all this: you bought a plane ticket, you bought some toys for children, you bought an event ticket, you signed up for a gym. Now you are $1,000 short. Then a wakeup call (cold shower) comes and you realized you didnt have to buy all this, what happens next? Either you are upset and don't look at photo streams again (knowing that it is tricky and may force you to spend more money you didnt need to spent at the first place), or you see how vulnerable you really are (or how good FB matches photos with buying amotions) and you install ad-blocks for facebook photos.

then all that opportunity for FB to sell more ads based on human emotions goes down the drain...

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