Facebook doesn’t need to be Adbook

Erick Shonfeld at TechCrunch says Facebook is getting into the advertising business in a big way, as he covers Mark Zuckerberg’s remarks during Facebook’s ‘social advertising’ shindig in New York. Specifically,

  Facebook is announcing three things: Social Ads (ads targeted based on member profile data and spread virally), Beacon (a way for Facebook members to declare themselves fans of a brand on other sites and send those endorsements to their feeds), and Insight (marketing data that goes deep into social demographics and pyschographics which Facebook will provide to advertisers in an aggregated, anonymous way). These three things together make up Facebook Ads. Here are the press releases for Facebook Ads, Project Beacon, and its launch partners.

Here’s a gist from MZ:

  2:48: “the next hundred years will be different for advertising, and it starts today. As marketers pushing our information out is no longer enough. We are announcing anew advertising system, not about broadcasting messages, about getting into the conversations between people. 3 pieces: build pages for advertisers, a new kind of ad system to spread the messages virally, and gain insights.”

  Advertisers can build their own Facebook pages and design them any way they like: “We have photos, videos, discussion boards, any Flash content you want to bring to your page, plus any application a third party developer has made.”

  2:46 PM: Messages spread virally. All you need to do is get your friends to engage with it and add it to their profiles. Gives example of how causes are spread across Facebook. Support Breast Cancer, more than 2 million members.

In Facebook Ads – do they have a cluetrain?, Alan Patrick responds,

  I think Mr Zuckerberg is being uncharacteristically humble as this is even more momentous – it marks the point at which Planet Advertising finally left Planet Earth. (At Ad:tech last month the plenary topic on Day Two was by Virgin’s new Space Tourism business – see here – I wondered about the connection between space and Ads at the time, but know we know!). Even the usually fairly rational Forrester Research has fallen hook, line and spaceship for this one.

That last link goes to MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of the “Fan-Sumer” matter to brands, by Jeremiah Owyang. Read his whole thing, his links, and then go back to Alan’s case, which he sums up this way:

  So there it is – because you are my friend on Facebook, I will continue to trust you when you flack something rather than when the brand flacks it themself. And at a higher performance rate and pricing than current to boot, according to….Facebook.

  Our Call – The Cluetrain has finally left the rails.

  Planet Advertising desperately wants to believe we will all trust all our “friends” who start spamming us with Ads, but they misunderstand the entire dynamic of trusted networks. We trust friends precisely because they don’t do this sort of thing. Once they start, we stop trusting them – its dynamic, not static – you have to keep on co-operating with me to keep my trust, its not a given.

  And, as anyone who is familiar with the game theory in behavioural economics will tell you, once we suspect we are being played for a sucker / taken advantage of, we will take revenge – even to our own detriment. The backlash on this, since it has been done so crassly, is going to push Planet Advertising back far further than it need be.

  (In fact, I rather think the original authors of the Cluetrain Manifesto saw this coming down the tracks, Doc Searls for example is leading the charge in VRM approaches that put the control of the user’s social assets back into the users’ hands)

Well, yes.

As I go back to the TechCrunch piece, however, and listen closely to Mark Zuckerberg, I think he’s getting a few more clues than Alan’s giving him credit for, even if he (MZ) doesn’t know it. I get that Facebook really wants to understand people, and relationships. That’s a plus. So is any plan that gives Google competition in a category it has defined and all but owned completely over the last few years. Facebook is in a transcendantly privileged position here.

But the problem for Mark, for Jeremiah, and for all of us (including yours truly) is that we too easily default to framing our understanding of advertising in its own terms. We regard advertising as an independent variable: something ya gotta have. But in fact advertising is a dependent variable. The independent variable is the individual human being. As Chris Locke put it so perfectly nine years ago, we are not seats or eyeballs or end users or consumers. we are human beings and our reach exceeds your grasp. deal with it.

What we need is to equip demand with better ways of engaging supply. Not just better ways for supply to create and manipulate demand.

Seems to me Facebook is proposing the latter. But I also think they’re new and willing to experiment and work with the 50 million humans now gathered in their walled garden. Unlike traditional media, Facebook doesn’t seem to be looking at those people as the equivalent of cattle. This is good.

The next step is to move outside the advertising frame. In the long run there’s a lot more money to be made helping demand find supply than in just in helping supply find demand.

And I know who can help with that.

28 comments

  1. Jeremiah Owyang’s avatar

    Doc

    You and I have talked over lunch about this topic, and you make a lot of great idealist points, but it’s hard to imagine a world without advertising as consumers continue to interact with it –thus fueling it.

    Some have suggested that Conversations are going away, and I certainly don’t agree that will happen. Take for example the fandom that requires socialads to work. Brands MUST have a conversation with Facebook members to get them to fan before SocialAds will work.

    It’s going to be an “and” not an “or”.

  2. Jon Garfunkel’s avatar

    This is the golem that the Cluetrain conjured up. I see a straight line connecting the two. You do not? #91: “Our allegiance is to ourselves– our friends, our new allies and acquaintances, even our sparring partners. Companies that have no part in this world, also have no future.”

    “The next step is to move outside the advertising frame”

    What do you mean? Companies pay money to gain the attention of consumers, we call it “advertising.” Is there a problem with the name?

  3. Facebook doesn’t need to be Adbook « turnings’s avatar

    [...] doesn’t need to be Adbook 7 11 2007 Facebook doesn’t need to be Adbook: But the problem for Mark, for Jeremiah, and for all of us (including yours truly) is that we too [...]

  4. David Cushman’s avatar

    Doc I do think they have got something here:

    It looks to me that Facebook play is based on sound strategy for two reasons:

    1. SocialAds are an easy sell for the current marketing mafia. They ‘get’ in-context related ads. They hear that social networks create trust. They know that trust begats sales. Where do I sign?

    2. Facebook Pages offer more engaged (enlightened or willing to experiment) brands an easy opportunity to touch the network themselves (rather than simply witnessing its exponential value generation and handing over their cash). As they learn what it’s like to be part of the communities which define brands, they will better serve the co-creational aspirations of Generation-C, Net Gen, the Edglings… the people who are inheriting the earth. Along the journey they should discover that these people want to help rate, shape, create, co-design, engineer and market. And they’ll want rewards and ownership. Facebook Pages offer them an easy intro to the new business ecology and in an environment where connecting is made easy.

    So it offers both a wedge of cash from the old guard right now (SocialAds) and a ticket to the future for the new (Facebook Pages).

    The above is part of a post on my blog: http://fasterfuture.blogspot.com/2007/11/facebooks-socialads-have-landed.html

    My best regards. dc

  5. Mike Warot’s avatar

    What about the rest of the “relationship” that VRM is trying to manage… the intermediaries who add value before the relationship is consumated?

    There are a lot of people who could add value to enable/prevent a relationship before it even starts. VRM is incomplete without discussing them and factoring them into the mix.

    I know it’s all still vague and nebulious, and it’s hard to resist the urge to just start coding now, before the analysis has even started in earnest..

    I’m willing to help.. and I hope this bit of text does just that.

    –Mike–

  6. Hanan Cohen’s avatar

    If I understand correctly, Seth Godin is saying that in the long run, they are not going to make much money.

    http://sethgodin.typepad.com/seths_blog/2007/11/facebooks-hotma.html

  7. Weekly Digest of the Social Networking Space: Nov 7, 2007’s avatar

    [...] announcement, to be fair, not everyone agrees with our call, so you can read other opinions from Doc Searls or the many voices on [...]

  8. Social Marketing Defined - WOM - Cluetrain | The Commerce360 Blog’s avatar

    [...] Link: Doc himself on the whole issue. Worth reading. addthis_url = [...]

  9. Howard’s avatar

    This (rich and useful) discussion seems to miss one important, perhaps essential point: advertising isn’t just about “helping demand find supply” or “helping supply find demand.”

    It’s also about *creating* demand.

    There’s a lot of negative karma around that — “They’re making me buy things I don’t need!” — but it’s nonetheless a foundational truth about advertising.

    Nobody ever used a search engine to look for a product they didn’t know existed. Nobody’s friend recommends a product that isn’t launching for three more months.

  10. Mike Warot’s avatar

    I’ve used a search engine and wasn’t able to find stuff that I figured would exist… if it’s not a unique enough term, google is worthless at finding it. It’s definitely not as good as a true semantic search would be.

    I get recommendations for products all the time before they exist… Scoble, Digg, and the occasional hint from a friend who bends an NDA.

    This whole “huge launch” mindset of old school advertising is counterproductive when you’ve got products and services that can be incrementally improved.

    Beta testing is a method of product development and marketing all in one… some would say that any M$ product that hasn’t hit 2.0 is a beta. ;)

    Shopping in general is all about finding things I didn’t know I needed… it’s a discovery process.

    As long as they don’t burn karma trying to push things I definitely didn’t ask for… advertisers and marketers aren’t going away.

    –Mike–

  11. Don Marti’s avatar

    What about the signaling problem? The most important information an ad can send, and often the only information, is the vendor’s willingness to blow money on an ad by paying for the production of the ad itself, and for the content it’s attached to. It’s especially important for tech goods where much of the value of the product is in future support and you need to get a signal of the vendor’s intentions. Conversational marketing and micro-targeted advertising just don’t send the same signal that a 1-page ad in The Economist does.

  12. Don Marti’s avatar

    The economics of signaling is why ad targeting can only do so much. So what if a vendor paid 3 cents to show me a “Download ExampleWare” ad? If I click it and they kill the product, they wasted the 3 cents. But if they just bought a Super Bowl spot for the product and then killed it, then they share my pain.

  13. Doc Searls’s avatar

    Jeremiah, I agree it’s going to be ‘and” rather than ‘or’.

    I think Facebook has an opportunity to help demand find supply, rather than just in improving the way stuff gets pushed at “consumers”.

    As you point out, Facebook’s plans are about improving marketing. Fine. But there’s a limit to how far you can go with that. Maybe Facebook will find it. And maybe it will include everybody’s social graph.

    That still won’t be enough. We’ll still need to equip customers with better ways of communicating what they want — as individuals, and not just as members of social networks, no matter how swell those networks may be. We also need to create better way for customers to form and maintain relationships to producers and sellers, on terms that work for both sides. Near as I can tell, Facebook isn’t doing that. Not sure they can, or would be interested.

    But they should be.

  14. Doc Searls’s avatar

    I’m jetlagged and behind on work, so I don’t have time to say much more than this:

    Try to look at this from the customer’s side — from your side. Is all you want as a customer to make marketing better?

    What happens after you’ve perfected advertising? Is that enough?

    If the answer is no, then we have something to talk about And so does Facebook.

  15. Jon Garfunkel’s avatar

    Ok, Doc, I think I see your general point now. (I’m as guilty of hastily reading blogs as others are of hastily writing them– leading to confusion). When you say, “The next step is to move outside the advertising frame,” you are talking about the next step for corporate communications, and not necessarily for Facebook. It’s confusing because it looked like your post was devoted to Facebook.

    Let me break this out logically, and tell me whether you agree with any or all:

    1. VRM is the “next step” for communicating with companies.
    2. VRM is not marketing, it is almost the opposite of it.
    3. Blogging is quite often marketing, because it gives much more power to the publisher than forums, not to mention the prima facie evidence of blogger-marketers.
    4. Therefore, simply-blogging is not VRM.
    5. Facebook is not simply-blogging, which is why it is extraordinarily popular. Blogging to facebook is like stickball to baseball.
    6. So, among the better-than-simply-blogging tools are Facebook and VRM.
    7. But Facebook has no pretensions of solving VRM. It is merely using advertising as means to an end (revenues).

    That said, recall what I sent over to you in email about the Pitchbox concept. Verizon has a blog but no inbox. So a solitary customer like me has a very difficult time getting their attention. The best thing I can do today is use a popular social networking tool to find out how to contact members of their corporation communications team.

  16. simon’s avatar

    maybe I dont’ get your point, on facebook there’s the .com, it’s for commercial right? so, no surprises if they get ads.

  17. Every generation needs a new revolution « Alexander van Elsas’s Weblog on new media & technologies and their effect on social behavior’s avatar

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  20. Vittorio Pasteris » Bye bye Facebook’s avatar

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  21. Lex Ferenda » I’m still watching you’s avatar

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  23. Doc Searls’s avatar

    Jon,

    First, correct about the confusion. It also happens that Facebook is getting maximum facetime right now. So its problems (and opportunities) come to stand for general ones.

    On your points…

    1. VRM is not a “step” but rather an approach: a reciprocal one.
    2. VRM is not the opposite of marketing. It’s more the external customer-side mechanism engaged by the such internal corporate mechanisms as sales and CRM. That external mechanism doesn’t exist yet. We think it should. Maybe we’re wrong. Don’t know yet.
    3. Blogging is just a form of writing. It happens to be done by many more people every day, so it becomes a way of doing many things. Marketing is one of them.
    4. Right. Blogging is not VRM. It might do some VRMmy things, but that’s as far as it might go.
    5. Facebook does a good job of being many things to many people. This is what makes it AOL 2.0. Or, at its best, “AOL done right.” Still, this brings problems of its own.
    6. Yes, VRM would be better than blogging at relating to vendors. Facebook? Possibly. But only if it’s something they want to take on.
    7. Right. Facebook appears to want to be an advertising company, just like Google is.

    I love the pitchbox concept. Readers, check it out.

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  25. Buzz | Bloggtidningen’s avatar

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