So basically this is saying that Facebook needs a search engine to be effective at advertising. Is DuckDuckGo up for sale?
Why would they buy DDG when they (FB) already have Bing? Oh...yeh. Is DDG for sale? :)
Facebook Advertising is Fool's Gold
41–50 of 75 posts
Re: Facebook Advertising is Fool's Gold
#42Ever since FB has gone public, I've noticed so much 'negative' stories/comments, and I really wonder why these are only coming out now... FB has been around for a long time and nothing has changed in its marketing strategies since it seems. Personally, I don't have a FB account, or own any stock but this targeted 'bashing' seems useless and has the smell of targeted anti-FB propaganda. Why don't we focus on the real…
> "Why don't we focus on the real issue being people rights to privacy and the shady practices of FB?" These things are all connected. The public is being sold the idea that this is a $100BB company, one of the biggest in the world. Yet when some of us look at it (yourself, even) we see a great tool that doesn't justify the price as a business : as cletus says at the top of the thread, Facebook may just be another ad…
I don't think that anyone who did their homework would have bought FB stock as a 'sure thing for long time investment'. FB didn't fool anyone who wasn't too greedy for their own good. Obviously I'm not saying FB is not a hugely successful product with an immense user base, but obviously the fact that this IPO is not 'going as predicted' by it's underwriters was clear to me waaayyy before the stock hit the markets ...
Re: Facebook Advertising is Fool's Gold
#43I call survivor bias. Historically, the only player in online advertising is Google, which is 100%-focused on intent-based advertising. So the article, logically concludes that intent is the only way to advertise (despite decades of TV and radio ads).
Some products do great with intent-based advertising. Other products (that you didn't even know you needed) need other forms of advertising.
Re: Facebook Advertising is Fool's Gold
#44I wonder what would happen if Facebook ran a scheme like AdSense. Advertising on the Facebook site itself seems not to be working, but I could foresee a situation where website owners allow Facebook to display ads on their site for a fee per click just like AdSense. Facebook already has a javascript presence on many, many websites already.
They'll do it as soon as they are confident that they can pay websites more per click than AdSense. It's a winner-take-all market.
But AdSense is very vulnerable: intent (the search string), which is the one reason Google advertising works, is absent from AdSense.
As an example, I once wrote a blog post with a title like "startup financing: take the elevator, not the stairs". Google placed ads on that post for Thyssen elevators. It had just no clue that the topic was startups, not actual elevators. Not impressed.
Re: Facebook Advertising is Fool's Gold
#45Earlier quoted context omitted.
I'm confused over the significance of the P/E ratio. It seemed like a big deal when I was reading these stories about the FB IPO, but then I got to look at other ratios in tech. Amazon's is much higher than FB's 93.72 at 175.23 [0] [0]: http://www.google.com/finance?q=NASDAQ:AMZN&authuser=0
Some interesting observations about Amazon's P/E ratio here http://www.mondaynote.com/2012/05/27/decoding-share-prices-a... on Jean-Louis Gassée's "Monday Note". Basically, Amazon forgoes profit to get market share, will push out all competitors, build a huge barrier to entry with excellent execution and logistics, and then raise prices to increase profit. Traders are buying now and holding until that happens.
Supposedly. Everyone has been waiting for the big payoff since the 90s, but Amazon remains a stubbornly low-margin retailer. Eventually people are going to be forced to face the fact that there is no sinister Phase 2. Amazon is just happy being a low-margin, high-volume Walmart-of-the-Internet with little interest in its investors.
Re: Facebook Advertising is Fool's Gold
#46Facebook's advertising model is a simple classical displaying advertising model. It need be disrupted seriously. Nowadays, the most popular marketing model is displaying advertising model, which is actually an attention-driven marketing model. However, no matter how good they are context-awared and personalized, they are always guesswork, which can hardly achieve high relevancy. It is extremely difficult to guess use…
How do you promote events in your non-bubble view of the world? An event can be in person (imagine TechCrunch Disrupt for instance), or a new TV series launching...
I can imagine very well how I would target people who like the series 24 if I'm launching a new thriller. Or readers of Hacker News for a tech conference. Etc...
Re: Facebook Advertising is Fool's Gold
#47I agree with this and have posted numerous comments here to that effect, particularly on the value of intent (with respect to the effectiveness of online advertising). Th attitude of "eyeballs not revenue" and finding that repeatable, scalable formula are almost a religion on HN and in startups. It's generally a strategy I approve of. Even dropping 20% since the IPO (currently trading at just over $30 as I write this…
1 - fb has the potential to be the first serious adsense competitor: slightly poorer context data (though they certainly can repeat much of the work google has done, and I bet bing would love to do a data deal with them) but much better data about the user. Adsense earns roughly $10B/ year; ex my quick guess at tac (23% from 2009q4) and adsense makes $7.7B/year net. FB stands to take a bunch of that if they wish. They still are trying to invent new types of social advertising, and it would certainly be weird if facebook.com was just a giant data honeypot, but they have the data and the technical ability. And the demand from pubs is certainly there: pubs love anyone who pays them.
2 - anybody citing GM pulling $10M in annual spend is an idiot, unless you think GM is in the business of sending out press releases announcing all of their advertising budget changes. No? Then there's something else going on here; perhaps some bare-knuckled negotiation tactics.
3 - fb collects a tax on gaming. Plus Zynga and some others may be cleared to start doing online poker for real money [1]. fb taxes that at 30%.
4 - low ctr is fine for direct response as long as you have proportionally low costs. What this does for the user experience is another question =P
5 - lots of people in adtech very much want Google not to win everything. See the rise of the ABG (anybody but google) exchange: appnexus + aol + microsoft [2]. I expect yahoo inventory to start showing up there once yahoo realizes they no longer have the technical ability to run an ad exchange. Scott talking about selling off rmx can't have helped retain technical talent, and at this point it's a fat question why anyone would want it. Yahoo will sell a bunch of guaranteed delivery, but I think a bunch of the rest will show up on appnexus eventually, if it isn't already there blind.
5a - contributing to the above, hopefully google will get investigated for antitrust. For starters, hiding search query terms in the referrer string should trigger an investigation. They use that data in adsense, and it's particularly valuable for targeting ads on low text pages. Now they're hiding that from other ad networks, I can't find any public statement guaranteeing they're not letting adsense see it. Google also uses search query results to juice display retargeting.
6 - ctr isn't particularly important for brand advertisers. There is a growing disparity of the ratios of ad spend / time spent in different media, with TV higher. Thus behind some of fb's valuation is the thesis that brand advertising dollars will be moving from tv to online, and fb is probably poised to take a big chunk of those. If/when this happens is unknown, but winning bets on those sorts of things is how investors get paid.
7 - fb may still be given a giant present from the EU depending on just how their anti cookie laws work in practice. The morons in GB rolled it all back 24h before the implementation deadline, but other member states may go all in and more or less ban 3rd party cookies. Then we'll be stuck in a tagless world, and I bet fb will get an enormous amount of spend.
[1] http://venturebeat.com/2012/01/20/the-deanbeat-should-zynga-...
[2] http://www.adweek.com/news/technology/aol-make-inventory-ava...
Re: Facebook Advertising is Fool's Gold
#48I wonder what would happen if Facebook ran a scheme like AdSense. Advertising on the Facebook site itself seems not to be working, but I could foresee a situation where website owners allow Facebook to display ads on their site for a fee per click just like AdSense. Facebook already has a javascript presence on many, many websites already.
They'll do it as soon as they are confident that they can pay websites more per click than AdSense. It's a winner-take-all market. But AdSense is very vulnerable: intent (the search string), which is the one reason Google advertising works, is absent from AdSense. As an example, I once wrote a blog post with a title like "startup financing: take the elevator, not the stairs". Google placed ads on that post for Thysse…
Google uses search activity from the past several hours to help match ads in adsense for content[1]. Hiding those from other ad networks is, imo, one of the best reasons they should be sued for antitrust.
We've recently started to expand the use of the query words in referral
URLs to a few hours so we can so we can continue to deliver more relevant
ads. The technical way that we're doing this is by associating the
relevant query words in the referral URL with the existing advertising
cookie on the user's browser. After a short period of time (a few hours)
the query words are no longer used for the purposes of matching ads.
Re: Facebook Advertising is Fool's Gold
#49Facebook's advertising model is a simple classical displaying advertising model. It need be disrupted seriously. Nowadays, the most popular marketing model is displaying advertising model, which is actually an attention-driven marketing model. However, no matter how good they are context-awared and personalized, they are always guesswork, which can hardly achieve high relevancy. It is extremely difficult to guess use…
Do you seriously believe advertisers waste trillions of dollars? That not a single one has turned off ads in a geo-fenced area to see what happens? Or that adwords advertisers (and all direct response advertisers for that matter) don't fanatically track roas?
Also, empirically, users refuse to pay for stuff and want advertising so they're not out of pocket. For the 1e6 + 999th time: " If you are not paying for it, you're not the customer; you're the product being sold."
Re: Facebook Advertising is Fool's Gold
#50I wonder what would happen if Facebook ran a scheme like AdSense. Advertising on the Facebook site itself seems not to be working, but I could foresee a situation where website owners allow Facebook to display ads on their site for a fee per click just like AdSense. Facebook already has a javascript presence on many, many websites already.
Adsense makes up a minority of Google's ad profits. The billion dollar business is in Adwords, not Adsense.
sadly, no. Adsense is a $10B/year business. Even ex tac of 30%, that's still a big business.
From wikipedia [1]:
In Q1 2011, Google earned US$2.43 billion ($9.71 billion annualized),
or 28% of total revenue, through Google AdSense