Monday, December 26, 2011

Un-like Facebook

Facebook, who is preparing up to auction itself off to the public, is making a significant change to how users view the advertisements on the social networking site. The little ads that are currently to the right of the newsfeed will be moved into the newsfeed and share the same space as your friend's updates.

For Facebook to make more money, and thus be worth more, the company has to sell more of its main product, advertising. However, if advertising rates online remain flat, the only way to make more money would be to sell more. But there is a shortcut. An advertiser can charge more for the ad if they give the purchaser more visibility. This visibility makes for a better ad but often at the expense of the content (the stuff people want). In the short-term this can work; however, long-term its a solution that only perpetuates the problem it tries to solve. More ads creates more noise and less visibility for other advertisers as well as hurt traffic because they detract from the stuff people really came to see. It's the fundamental problem with making money from advertising - what worked yesterday doesn't work today.

Facebook knows there will be backlash from users. So it will initiate the new advertising slowly - limiting the posts to once-a-day - and hope people don't notice it much. However, if Facebook will continue to grow, it will certainly increase the frequency and the number of ads as well as place them in the feeds of mobile users.

The ads on Facebook are unique because they're complimented by the "like" or approval of a friend. Facebook gives the brand the ability to pay to have this put into your newsfeed. So if you like the page for "Bud Light" for instance, they can pay Facebook to have your "like" into a
"sponsored story" in the newsfeeds of your network. Interestingly, the ads won't look like traditional online advertising because they know how important it is to disguise the ad as the a friend recommendation - even though that user won't know when their interaction will be converted into a sponsored story.

Unfortunately, users are not given the option to opt out of having these ads show up in their newsfeed. Thankfully, they do have a choice if they don't want to spam their network. "Unlike" stuff. If people do this, they won't treat their friends page as collateral damage from marketers.

I'm going to treat my connections in the most socially acceptable manner and not spam them. I encourage everyone to do the same. Simply go to your page. Click on the info tab and "unlike" all the junk no one really looks at anyway.

It's the campaign to Unlike Facebook.

No comments: