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Facebook Advertising is Fool's Gold

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Re: Facebook Advertising is Fool's Gold

#11

Post by tomelders »

For me, this is the strongest case yet for niche social networks being the future of social media. FB is too broad and demographics tell you little about the people you are speaking too unless you can inject some sort of context.

If (via a Distributed Social Networking Protocol) people were subscribed to several social networks focused on their hobbies and interests, then I believe Social Media Advertising would be more viable, and more useful to the audience.

I also think that when you look past all the fanfare and hyperbole surrounding social networking, what you're left with is really sophisticated bulletin boards and forums.

I can see that from a marketing point of view, having one point of access to that many people might seem like a dream come true, but the numbers are suggesting that's not the case at all. Facebook is not the answer to an online advertisers dream. I don't think it ever will be.

Re: Facebook Advertising is Fool's Gold

#12

Post by helipad »

AznHisoka wrote: post #4
helipad wrote: post #2

I 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.

Indeed - I've no idea what the revenues would be - was just an idle thought.

Right now the problem is getting people to believe in Facebook's revenue to get some confidence back in the market.

Not saying it's is a silver bullet by any means.

Re: Facebook Advertising is Fool's Gold

#13

Post by sp332 »

amitvaria wrote: post #8

But consider Facebook's "friction-less sharing". Facebook now knows you just listened to a song, read and article, took a trip, had a baby, got married.... Now think of the targeting you can get there.

The targeting goes all the way down. Gabriel Weinberg (who runs DuckDuckGo) targeted an ad to one person! http://www.gabrielweinberg.com/blog/2010/05/a-fb-ad-targeted...

Re: Facebook Advertising is Fool's Gold

#14

Post by tomelders »

amitvaria wrote: post #8

But consider Facebook's "friction-less sharing". Facebook now knows you just listened to a song, read and article, took a trip, had a baby, got married.... Now think of the targeting you can get there.

You sell cars.

I listen to Donovan, The Beatles, The Stone Roses, Mozart, Au, REM, Dj Shadow, Handsome Boy Modelling School, Chopin, Ludovico Einaudi and Daft Punk (to name but a few).

I've liked pages for five star greek hotels, the burger place on the corner, the guy who sells awesome falafel's on Hoxton market. You know I saw this video of a talking dog that I thought was totally awesome.

Just this month, I read an article on the Greek debt crisis in the economist, an article on David Beckham in the Daily mail website, I shared a wikipedia page about Rommel, I liked an article about continuous integration with node.js and Jenkins.

Now sell me a car.

I actually like Volkswagens and Volvos, but you won't find that anywhere in my Facebook data.

Re: Facebook Advertising is Fool's Gold

#15

Post by antidoh »

I am so glad that email didn't depend on advertising to eventually support itself "sometime in the future." Email is useful to me as email, and useful to my providers as a billed service.

Yes, they're different things.

Re: Facebook Advertising is Fool's Gold

#16

Post by PelCasandra »

AznHisoka wrote: post #4
helipad wrote: post #2

I 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.

Minority? It almost half of all Google ad profits.

Re: Facebook Advertising is Fool's Gold

#17

Post by mkr-hn »

helipad wrote: post #2

I 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.

I've never had good results from ticking the box for Google's display network in AdWords campaigns. The culprit is poor implementation by webmasters, not the amount or detail of data available. I don't see why a Facebook display network would do any better.

Re: Facebook Advertising is Fool's Gold

#18

Post by cletus »

I 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; and bear in mind that even Groupon--at least initially--enjoyed a nice IPO bounce), the company is trading at a huge P/E ratio.

I get why this is: it's speculative. FB is still viewed as a growth company and the speculators feel that there is huge unrealised monetization potential.

I remain a skeptic regarding the value of "social" in advertising. The OP is right: all this data just means--maybe--a slightly higher CTR, at which point Facebook is just another display ad network and that doesn't justify their valuation.

As an aside, IMHO Twitter is in this same "put up or shut up" boat. I don't believe Facebook is doomed (IMHO Twitter is). I just believe the value of the data silo they have is both overstated and transitory (at some point--one way or the other--Facebook won't be the gatekeeper to your profile and social graph).

Facebook has done a lot of things right as a business (the Like button being foremost among those IMHO). Personally I believe their biggest mistake was spurning Apple: Apple wanted to use Facebook for their Ping boondoggle.

Disclaimer: I work for Google in display advertising.

Re: Facebook Advertising is Fool's Gold

#20

Post by cageface »

tomelders wrote: post #14
amitvaria wrote: post #8

But consider Facebook's "friction-less sharing". Facebook now knows you just listened to a song, read and article, took a trip, had a baby, got married.... Now think of the targeting you can get there.

You sell cars. I listen to Donovan, The Beatles, The Stone Roses, Mozart, Au, REM, Dj Shadow, Handsome Boy Modelling School, Chopin, Ludovico Einaudi and Daft Punk (to name but a few). I've liked pages for five star greek hotels, the burger place on the corner, the guy who sells awesome falafel's on Hoxton market. You know I saw this video of a talking dog that I thought was totally awesome. Just this month, I read a…

I actually like Volkswagens and Volvos, but you won't find that anywhere in my Facebook data.

I'd bet there's actually a pretty high correlation between many of the things you just listed and a preference for VWs and Volvos. It doesn't really take that many data points to start filling in the blanks.

But I think this kind of targeting is going to be more useful in selling you a product you don't yet know about but are likely to want than it is a car that you are almost certainly already aware of.

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