Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

After Facebook fails

blogs.law.harvard.edu

Post reply on HN
Print view View original

21–30 of 214 posts

Re: After Facebook fails

#21

Post by [deleted] »

nextparadigms wrote: post #10
fleitz wrote: post #5

If internet advertising is a bubble that's going to pop they might as well retitle this article: After Google, Yahoo and most web properties fail. I guess all we're going to be left with is craigslist and basecamp, also there won't be any newspapers because they're dead because of the internet, and all their replacements are dead too because internet advertising doesn't work. (according to the OP)

I think there's a Facebook Advertising bubble, not an Internet advertising one. I don't think Facebook ads have ever really worked, but most thought they did, which is why it's a bubble.

[deleted]

Re: After Facebook fails

#23

Post by guelo »

hkmurakami wrote: post #6

Every time I read about how online targeted ads have poor returns for advertisers, I think to myself: "These advertisers know that the ads have low ROI because things are measureable online. How (in)effective would traditional advertisements prove to be, if they were as measurable as their online counterparts? How (in)effective would traditional advertisements prove to be, if they didn't interject themselves into the…

But advertisers aren't stupid. There must be a rational reason why they keep paying higher prices for traditional ads.

Re: After Facebook fails

#26

Post by mcantelon »

I didn't get through the whole post as it's kind of disjointed and meandering, but its initial assertions seem shaky.

Personalized ads do have business value. After looking at some videos about Native Instruments audio gear on YouTube, I started getting a lot of Native Instruments ads pretty quickly. Unlike television, I am being shown ads for something I might actually buy rather than ads for things I will never buy. If traditional advertising is effective, then I don't see how this more targeted advertising can't be more effective.

As for "uncanny valley", what's "icky" now won't be icky in 10 years. You can get used to anything and kids growing up with the "uncanny" will quickly see it as normal, whether this is a good thing or not.

Re: After Facebook fails

#27

Post by jriediger »

I think a lot of the analyses of Facebook's advertising model miss one important point. Sure, their CTRs are not even closely comparable to Google's numbers. However, when people search on Google, they're often actively looking for certain products that lead to high CTRs on these targeted ads. In Facebook's case, people want to socialize and generally don't want to be disturbed by ads.

Basically, Facebook currently uses an advertisement model that is not very natural to its product (and not very well targeted for a number of reasons). But Facebook just doesn't care at this point, because they still generate sufficient revenue through the sheer number of users.

So the real question is whether Facebook can come up with an advertising model that is truly natural to its product (e.g. actual product recommendations by friends in conversations etc.). To conclude that Facebook is doomed to fail because their advertising model is suboptimal seems to be a little premature.

Re: After Facebook fails

#28

Post by dr_ »

First of all, it's not clear that social media advertising is going to fail, just because the author is not happy with results he gets. It was announced today that Oracle purchased Vitrue http://techcrunch.com/2012/05/23/more/ a company with close to 100 million a year in revenues. Presumably, for many people, it works.

Secondly, the title of the article is After Facebook fails - which implies it will fail and will do so because it's advertising model will fail - but who says facebook primary business model has to be advertising? If they continue to grow to over a billion users - who says that the "like" button on sites all over the web now shouldn't be charged for? who says users shouldn't be charged for premium services? more photo filters on instagram - just pay!

the possibilities are endless, and advertising, for now, is just one of them. my gut says it will become less and less important as a revenue generator over time. and personally I will welcome that change, cause with all the ads adjacent to the chat bar, the site is looking pretty messy.

Re: After Facebook fails

#29

Post by glesica »

polemic wrote: post #16

I have no idea if Facebook is valued correctly or not, however I think this misses a vital point. Facebook is not nearly the same as other web ventures. It's ability to target ads seems secondary to this: From http://www.kenburbary.com/2011/03/facebook-demographics-revi... , slightly out of date, but still useful: - Average user visits the site 40 times per month - Average user spends an 23 minutes (23:20 to be preci…

Keep in mind that all those page views and all that time spent on the site costs Facebook money. It's not like outdoor advertising where the cost is set up front (then amortized over the life of the sign, device or property lease) and the marginal cost for additional viewers is zero.

Another thing to keep in mind is that there are competitors constantly targeting Facebook. But not just targeting them on price, targeting the features of their site that keep people there for 30 minutes every day. This means that Facebook has to spend money to "improve". Again, compare this to outdoor advertising where the competition is largely just a matter of bidding on space every so often.

I, like you, have no idea what Facebook is worth or how successful their business model will turn out to be. However, I think it's important to keep in mind that turning page views (or minutes spent on the site, whatever) into money really isn't a fully solved problem, at least not in the general case. Facebook definitely has their work cut out for them I think.

Re: After Facebook fails

#30

Post by kposehn »

Smerity wrote: post #3

He points out some of the terribly targeted ads that Facebook pushes on users. I think this is a huge issue that's not discussed enough. Facebook has all the data but no real targeting. This stems from two core issues: 1) they don't seem to use their immense datasets as effectively as Google does and most importantly 2) they rely on the advertisers to target their ads. Advertisers, even when handed the best demograph…

> Facebook has all the data but no real targeting

In general, this is incorrect.

What you see as poorly targeted ads are those where the advertiser does a poor job, not Facebook. The tools are there and the most successful advertisers use them.

Post reply on HN