There is only one potentially revolutionary concept in Facebook Ads: the “trusted referral” from one person to others. How Facebook handles this will determine whether the platform truly represents a new kind of advertising–or whether Facebook will have to make do with demographically targeted CPM-based display ads.
Personal referrals, reviews, etc. are by far the most persuasive element in product or service selection: We are herd animals, and even sceptical people often take the recommendations of those they know and trust as gospel. This is why the Facebook platform could be revolutionary: It could potentially allow marketers to harness this one-to-one trusted recommendation engine.
The devil, however, is in the details (about which little has so far been revealed). Specifically:
- Will advertisers pay people to recommend their products to friends? How much? *[UPDATE: After reading additional descriptions, it sounds as if people won’t be paid].
- Will there be no money involved? In which case, people are just going to recommend businesses and brands because they feel like it? (Honest, but probably not a particularly popular activity, and certainly nothing that an advertiser is going to pay Facebook for.) Will it be crystal clear what will happen when you sign up as a “fan” of a business? If not, why would you voluntarily risk bombarding your connections with “trusted referral” product pitches if your friends weren’t asking for the information and there was nothing in it for you?).
- If people are paid, will they be paid once, or will they get ongoing payments for downstream referrals and ongoing business? (You recommend your Morgan Stanley broker to a friend. The friend uses the broker and racks up huge commissions and recommends the broker to three other friends. Do you get compensated for this?)
- Will “friends” reveal that they are being paid? That they are effectively part-time buzz marketing agents and sales reps–or, as with some cases of physical world “buzz marketing,” will friends just appear to be raving about a particular product because…they love it?…
The press release outlined the concept, but it did not address any of this:
Advertising messages will gain distribution through what Facebook has termed the “social graph,” the network of real connections through which people communicate and share information…Users can become a fan of a business and can share information about that business with their friends and act as a trusted referral.
How? Any money involved? Just doing favours for friends? If so, why will advertisers pay Facebook for this?
Facebook users can interact directly with the business through its Facebook Page by adding reviews, writing on that business’ Wall, uploading photos and in any other ways that a business may want to enable.
And people will do this because?
These actions could appear in users’ Mini-Feed and News Feed, Facebook’s popular products that allow users to share information more efficiently with their friends.
Will I be paid to put commercial items in feeds? Will it be clear that I am getting paid?
Facebook’s ad system serves Social Ads that combine social actions from your friends – such as a purchase of a product or review of a restaurant – with an advertiser’s message. This enables advertisers to deliver more tailored and relevant ads to Facebook users that now include information from their friends so they can make more informed decisions. No personally identifiable information is shared with an advertiser in creating a Social Ad.
This could easily get ugly, too. Devil in details.
Social Ads can appear either within a user’s News Feed as sponsored content or in the ad space along the left side of the site.
Again, compensation involved? favours? What’s in it for the “friend” who is bombarding “friends” with an advertising feed? Discounts on future products? Great table next time you visit? Is all this disclosed? Will other friends enjoy it?
Facebook’s Secret Ad Platform: Revealed!
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