I am at Facebook’s social advertising announcement in New York City, where Mark Zuckerberg is about to take the stage and tell us all what we already think we know: Facebook is getting into the advertising business in a big way. Much of what will be announced today, such as projects code-named Beacon and Pandemic have already leaked out. We’ll see how much of that leaked information was correct, and what more there is to add. Facebook is certainly pulling out all the stops with this announcement, on the agenda later on is a panel with Microsoft’s Kevin Johnson and Blockbuster CEO Jim Keyes that will be moderated by Charlie Rose (who charges a lot to do these things, or so I hear).
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.
Zuckerberg just took the stage (keep in mind that he is addressing advertising executives and press in the audience). The following notes are in reverse-chronological order:
A few extra tidbits from press conference with Zuckerberg afterwards:
Q: “Are you worried this will make Facebok too commercial?”
Z: “Actually I think this will make it less commercial because the ads now are [more generic].”
Big point: Microsoft won’t be serving Social Ads. This will be controlled by Facebook. Zuckerberg clarifies: “Microsoft is the exclusive third-party provider of IAB standard ads. This is not going to go through Microsoft. We think it is a different kind of advertising.”
“The pricing mechanism will be completely auction-based. People can either bid for a CPC or a CPM.” You will also be able to buy non-social ads through this system as well, which should be turned on by tomorrow at this link.
People will not be able to opt out of these social ads or turn them off, at least for now, unless they stop revealing information about themselves on Facebook. Says Zuckerberg: “It is an ad-supported service. It is a free service.”
Zuckerberg doesn’t think he is competing with Google ads so much as offering a better way to create brand advertising online. Social Ads are not so much about buying a digital camera right now because you are in the middle of your shopping research. They are about planting suggestions for things you may want but do not even know that you want. That is what brand advertising is, and it represents the majority of ad dollars spent today offline.
My thoughts: This could be huge if done right, but it could also backfire badly for Facebook. If I start to think that my friends are advertising to me, I may no longer trust them (and, in fact, try to avoid them . .. by not logging into Facebook anymore). So the the trick is to make these appear to be genuine recommendations, and not ads. I am not sure how many people will be fooled by this, though. It risks turning something useful—the feed of my friends’ activities—into something spammy.
3:06 PM: “Everything you have seen here is launching tonight.” Launching with 40 partners [press release says 60] (including Blockbuster, CBS, Chase, The Coca-Cola Company, The New York Times, Sony Pictures, Verizon, Dove, and Zazzle). “This is something we have been working on for a long time. It is really good to share it with you guys.” [Zuckerberg walks off stage]
3:03: Insights. Aggregates profile data. “We look at the people your ads are reaching and break it down by age, gender, interests, and a whole lot more we are adding soon.” Says none of this will be personally identifiable. “We will be able to track how much people are talking about your brand in public forums across facebook. As you run ads on Facebook you will be able to see the exact mind share you are getting.”
2:57 PM: “Social Actions + Content = Social Ads.” They spread your message virally through the social graph. these ads will appear both in people’s feeds and as a personalized banner ad.
“Let’s talk about targeting. With Facebook you will be able to select exactly the audience you want to reach, and we will only show your ads to them. We know exactly what gender someone is, what activities they are interested in. their location, country, city or town, interests, gender,” work history, political views [Like what they've already done with Facebook Flyers].
2:52 PM: “Social distribution, now here is where it gets interesting. When somebody engages with your page, that is spread virally through the network. When someone says they are a fan of your brand, that becomes a trusted referral. It goes right to their Mini feed. A strong trusted referral for your brand. You will be able to craft the types of social actions you want to spread across the social graph.”
“We have created a product called Beacon that let’s you do this. Beacon will let users send information to their page, we confirm it, and share it on Facebook. One partner is eBay.” Can share listings from eBay on Facebook. So usres can share social actions from other websites and share them on Facebook. “This will be completely free.”
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.
2:44 PM: Zuckerberg is explaining the social graph. “Where Facebook really excels is in helping you keep up with all of your connections at the same time. It is making the cost of communication so low that information can be pushed out more efficiently than it ever could from a few big companies.”
2:43 PM: Z: “More than 80 applications have more than one millions users.”
2:37 PM EST: Zuckerberg: “Once every hundred years media changes. the last hundred years have been defined by the mass media. The way to advertise was to get into the mass media and push out your content. That was the last hundred years. In the next hundred years information won’t be just pushed out to people, it will be shared among the millions of connections people have. Advertising will change. You will need to get into these connections.
“People influence people. Nothing influences people more than are recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.
“Have already passed 50 million users, doubling once every 6 months. only active users who have used facebook last 30 days. More than 25 million people are using Facebook every single day. Each person is viewing more than 40 pages a day, more than 65 billion page views a month.”
Beacon Partners (Facebook advertising buttons that exist on other sites and when clicked are reflected in members’ feeds as a brand endorsements—how many of these brands would you bother to explicitly endorse to your Facebook friends, opr even identify with?):
IAC brands (CollegeHumor, Busted Tees, iWon, Citysearch, Pronto.com, echomusic)
CBS Interactive (CBSSports.com & Dotspotter)
National Basketball Association
Sony Online Entertainment