Info/Law

Last November, when powerhouse social networking site Facebook unveiled its new “Facebook Ads” programs, company founder Mark Zuckerberg declared, “Once every hundred years, media changes.” (This absurd hyperbole immediately became a punch line, as in the hilarious response from Nicholas Carr at the time.) I have criticized these programs before from a privacy perspective and am now writing a law journal article about the broader issue of “social marketing” and data privacy interests.

It now appears that change comes, if not every 100 years, then perhaps every eight months. Facebook is in the process of rolling out a comprehensive site redesign, which may include some changes in its advertising structure. All eyes are watching, but they don’t agree upon what they see. Yesterday, Valleywag first reported that the ads’ prominent placement was eliminated in the new layout. It then posted an update to say that the ads had reappeared but adding that there still seems to be uncertainty and upheaval:

Why the sudden turnabout? Likely because there’s an internal war raging about the placement of ads on Facebook, with stubborn founder and CEO Mark Zuckerberg the most resistant. Expect more coming and going of ads on Facebook: We hear the company is testing entirely new ad products, which may replace the current Social Ads shown here.

Valleywag might have this wrong. Another blogger sees the new design’s ad placements as more prominent than before, and another reprints an e-mail from Facebook announcing the changes and also opining that the ad placement is improved.

But whatever the truth in Valleywag’s reporting, and whatever Facebook does, it is now clear that the promise of immediate monetization from social marketing was a little hasty. As Business Week reported earlier this year:

Social networks have some of the lowest response rates on the Web, advertisers and ad placement firms say. Marketers say as few as 4 in 10,000 people who see their ads on social networking sites click on them, compared with 20 in 10,000 across the Web.

It seems two routes diverge up ahead. On one path, social networking, at least in the form we know it today, becomes a forgotten fad, the CB radio of the decade, forgotten by all but spammers (see, e.g., Friendster). On the other path, social marketing intensifies its data mining and other privacy-questionable practices to extract more revenue (see, e.g., Google). If you believe, as I do, that social networking generally offers lots of benefits to users and it would be good if it paid for itself, a regulatory dilemma appears. Where is the balance such that privacy harms are minimized but revenue maximized?

Filed under: Digital Media, Media, Privacy, Scholarship, Social Networking