This doesn’t come as a surprise to me (finally going outside of Facebook after months of rumors). It’s one of the key reasons I ended up investing in Facebook even before these ambitions were made clear. For me, the social networking part was not a key reason. What I mean is that while I do have an account there and use it, it’s not something that I can’t live without. It’s easy for me to go days/over a week without logging in and checking. The same goes for some friends I coerced into trying the ongoing experiment with.
Obviously for many, Facebook is a daily activity and a real part of their lives. It’s just something that isn’t that big for me. And given the number of users on their site, it wasn’t the key means to growing their business either. Given how quickly they refocused on beefing up their mobile offerings (since prior to the IPO, it was a sore spot – but also one that had the biggest potential given the amount of personal information and data that many of its users, have given up freely), I figured that it would be a matter of time before they went for larger fruit.
But they had to get their mobile presence fixed first. Then they had to build up their entire advertisement platform and prove to Wall Street they could generate revenue with their walled off user base (and they did). Inklings that they were trying to attack ads with a different approach, became clear with surveys that popped up. Facebook took a lot of flack for the early inline newsfeed ads/sponsored links they were placing in peoples feeds. The surveys were pretty simple; it took stuff that showed up in your feed (might have been a friends status update, a status update by a public figure you were following, and an actual advertisement), and it asked you what you thought it exactly was out of those choices.
The thing with ads is they are mostly very easy to sniff out. When it comes to personal preferences (like when you favorite a certain brand, a certain musical group, etc), something they post which could be construed as an advertisement (like a new album going on sale, or this new peripheral being released for this console that you own, etc), isn’t necessarily perceived as an advertisement for obvious reasons.
When a friend posts something where they are reviewing something, similarly, it may or may not provide relevant interest depending on the reader. If I post my thoughts on the iPhone 6 for example, and someone I know is interested in it, they could read further on to get more details. But it wouldn’t be construed as an advertisement for the product.
An actual contrived ad though, lacks that intangible personal touch. It has to be generic to a point. But given Facebooks platform revolves around something very personal (it knows your likes, it knows what things are your favorite things, it knows who your friends are as well as various permutations based on your relationships such as family, and using lists to further break groups of people into co-workers and other very specific classifications). A like has a very different context when it’s something a friend posts (like they posted a picture of a meal taken at this restaurant) versus a like of an actual brand, person (public figure), or business.
It’s why sometimes I go on what I like to call, a “liking spree”. I then later pretty much ignore any of the targeted/related stuff presented to me on the site. People like myself are the bane of advertisers and marketers. Most of their tactics don’t work. The only company I really have any sort of brand loyalty with (should be obvious by now), is Apple. But that’s something which took years to build up to where I can buy a lot of their products with a degree of confidence on a number of fronts.
The point though is that Facebook has so much granular personal data at their disposal and plenty of hard knocks learned from building out their own internal ads network, that Atlas has the potential to outdo Google. It’s why Google was so hellbent with Google+ in trying to come up with their social networking platform to woo users because Facebook walled off their ability to datamine this stuff.
Google’s ads still revolve around web search. And most of Google’s ad revenue from search are on the desktop side. It’s why Google did a 180 degree with Android and turned it into an Apple iOS competitor which they would license for free because then CEO Eric Schmidt (who sat on Apple’s board of directors at the time before Apple announced the iPhone), was paranoid enough that Apple’s app-centric model, would cut out Google from mobile search (because their ads, revolve around search).
Even though the initial iPhone lacked a native application SDK (Jobs initially felt web based apps using Apple’s WebKit framework in the form of a web bookmark icon on the Springboard which for all intensive purposes, looked and acted like an actual app, would suffice), the fact that companies could make their sites have an easy to see presence on the device, gave Google pause (because it then supplants the need for doing a basic search on that level). But once Apple quickly responded to developers and mentioned that an SDK would be forthcoming, Android quickly moved from something that looked and worked more like an old keyboard Blackberry device, to one that was similar to Apple’s iPhone. And it played up the free and open angle over Apple’s closed and proprietary nature.
Note that I still have a fundamental issue with people being willing products as far as their personal information being used goes. The difference though is that Google has to go out of there way to try to datamine as much information about you to build that profile. And they go to great extremes including giving away Android and Chrome OS, making a free mailing platform, making a free blogging platform (the one I’m posting on), a free cloud based office productivity suite, making a free maps system, buying companies like Waze to make their mapping (and thus tracking of where you go) even better, etc.
With Facebook, it’s literally in your face they want these pieces of information; and most people willingly give up that data by filling out forms of personal information on their site (as mentioned before, there is a lot I do not have filled out on Facebook – I keep getting those little popups asking for those tidbits telling me my profile is only 60% complete – and it’s going to stay that way). There’s a reason why I divested myself completely from GOOG a few years ago (to my own detriment considering the stock nearly doubled after that point). Questionable business practices including many failures including the acquisition of Motorola Mobility (and knowing it wouldn’t amount to much) and why I decided to take a stake in FB. It’s the lesser of two evils in this social/internet play (I would’ve preferred Yahoo but that’s another story of lost focus and years of lost opportunity).
The article mentions it may be about the data (Facebook’s ability to tap into the advertisers information for even more data) instead of dollars. Me, I think it’s both where they can kill two birds with one stone. And part of me hopes they can eventually put a sizable dent in Google’s ad business. Others keep mentioning Amazon as being a potential player in the ad space because of the wealth of data they have regarding the actual transactions. I dunno about that one; I would think Bezos would have gone into this space by now if he really wanted a piece of that pie.
