Facebook will make a major announcement at its F8 conference this week, and it appears that the world’s biggest social network is doubling down on content. The official motto for the event is “Read. Watch. Listen.” and several online music companies – including spotify.com, the latest sensation – are expected to join Facebook as launch partners.For Facebook users, who love using the site to communicate with friends and share content, this is good news. If Facebook delivers a social media product that’s up to its own lofty standards, people may spend even more time on the site as they begin to substitute Facebook for TV and radio.
For America and the world, however, this feels like a missed opportunity. Facebook achieved a ~$100BN valuation with its plans to disrupt “every vertical in history”, and the American economy desperately needs help that Facebook is uniquely positioned to provide.
For the economy as a whole, more media means more advertising opportunities. That’s great for Facebook’s short-term bottom line, but not so great for the rest of us. We don’t like the advertising we have. Too often, it’s an annoying shouting match between competing brands; banks and insurance companies, reeling from a loss of consumer trust, trying desperately to win us back.
Facebook’s great potential is in better advertising. Yet, the social network appears to be ignoring some important foundational steps in that direction.
What does better advertising look like? Ads that target users based on their real-time status messages, for one thing, would be a major step forward. The most valuable ads, of course, are for things you need right now. Facebook gets this on some level – I recently got engaged, and my fiance is seeing tons of wedding-related ads on Facebook – but Facebook has only experimented with ads that respond to users’ status messages.
Equally basic and powerful, Facebook should extend its social ads to the broader internet. Facebook has had huge success with Social Plugins, especially the Like Button, but has only toyed with a social advertising plugin. We need that plugin. We need ads that we trust, ads that help us navigate the system, ads that help us find trusted advocates within institutions. We don’t just need any insurance agent, but an insurance agent that cares about us as individuals. Facebook can do this, and young startups are eager to help. Several social recommendations sites have recently launched, and my own company, Stik.com,has been active in this area for two years. Facebook-powered advertising will ultimately be crucial to the success of these young companies.
The stakes for Facebook are incredibly high, because if there’s one company that understands the need for new advertising, and specifically social advertising, it’s Google. Google still makes almost all of its money on search ads, but they’ve recently been investing heavily in social tools. While Google+ does not appear to be competing effectively with Facebook, at least for now, it is laying the groundwork for Google to run social ads, which we already know, from Facebook’s example, outperform their traditional counterparts. Thus, while Facebook incorporates the best features from Google+ and Twitter and extends its lead in media, Google is quietly taking the pole position in social advertising.
I have been one of Facebook’s biggest admirers for years, and I fully appreciate how well they have developed their product and their position in society from 2004 to present. Their success inspires me. And yet, I worry that Facebook may have become a bit short-sighted with its investments over the last year. Music is fun, but commerce is king.
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