Publications - Agency Darwinism in the Web 2.0 Age - 01/28/2008. BannerBlog : Apple: Sign. Guess Who's Seeing Web Traffic Soar: Kraft and Co. - Advert. Within hours of Facebook’s announcement of its social advertising plans, the backlash began. What about privacy? What about relevance? (I know everyone is sick of hearing about Facebook, but there are some important business issues at stake here, so bear with me). As far as privacy goes, there is none on Facebook, in that any information you share is fair game for targeting by advertisers. So get used to it. Already, there’s been some insightful critiques on this front. It’s a nifty system: First you get your users to entrust their personal data to you, and then you not only sell that data to advertisers but you get the users to be the vector for the ads. Henry Blodget asks, not unreasonably: Will advertisers pay people to recommend their products to friends?
And Umair Haque warns of adverse selection with Facebook ads that are presented as updates to people’s feeds (aka Beacons). Yes, we all know referrals are powerful. These are all valid points. Is there really an advertising model for social networks? « Ligh. One of my consumer internet predictions for 2007 was that social network widgets would find a business model. There are a number of conferences coming up over the next few weeks that will address this, including Graphing Social Patterns, Widget Summit and SNAP Summit.
In my opinion, it looks like the business model will be advertising, and that it will be rolled up into the broader category of social network advertising. Of course, not everyone is as bullish on the advertising business model for social networks. As the NY Times noted: Andrew Chen, an advertising executive and adviser to the Silicon Valley investment firm Mohr Davidow Ventures, suggests that the Facebook enthusiasm is overblown. Precisely because Facebook is such an appealing and engaging environment, he says, Facebook users click on ads significantly less frequently than elsewhere on the Web. And Facebook members who add applications to their pages can just as easily remove or ignore them. 1. Traditional marketing failing on social networks.