Facebook’s “new?” advertising strategy

So the success that Facebook has been enjoying lately just doesn’t seem to be enough for the little SNS that could… A report from the Wall Street Journal states that Facebook is looking to “translate its popularity into bigger profits” by offering advertisers direct access to their targeted demographic consumers.  Back in May, when Facebook opened its platform to all those (mostly) annoying third-party applications, Zuckerburg stated the lofty goal of becoming the Internet’s social networking hub. Apparently, this 3 month-old goal is no longer enough… profits, we need profits… we need lots and lots of profits.

Facebook is certainly within its right to exploit the popularity of this phenomena, why not?  What’s the point of offering the service and collecting all this data if it can’t be used towards lining the company’s shareholders pockets.  And advertising is all they got.  As the WSJ articleput it, “While the Web site had roughly 30.6 million visitors in July, the company says it needs to do a better job profiting from its huge user base.”

I love how Zuckerberg still plays the role of the dotcom darling, presenting Facebook as a little independent start-up who is holding out against the big corporate bullies like Viacom and Yahoo.  Never mind that Facebook is financially backed by Accel Partners.  Two of the twelve Silicon Valley investors at Accel  who were involved in the Facebook investment are Jim Breyer and Kevin Efrusy.  As was reported in an earlier blog, Mr. Breyer is also:

• The Lead / Presiding Independent Director, and Chairman of the Strategic Planning and Finance Committee on the Board of Directors of Wal-Mart Stores, Inc (WMT),
• The founding Chairman of the Strategic Planning and Finance Committee on the board of Marvel Entertainment (MVL)
• The Lead/Presiding Independent Director at RealNetworks (RNWK), and a number of privately held companies such as BBN Technologies, Brightcove, Facebook, Global Grind Digital, ModelN, and Prosper Marketplace.”

Kevin Efrusy is also on a number of boards of directors, including BBN Technologies.  In fact these two are the only two who appear to be involved in Facebook on the whole team… incidently, they are also the only two who are involved with BBN Technologies.

BBN Technologies has been around for a while, since 1948 in fact, if their corporate timeline is to be believed as accurate.   In 1969, BBN Technologies launched ARPANET, the first version of the modern day Internet.  In1982, BBN Technologies “won the contract to build and operate the worldwide Defense Data Network for the Department of Defense” and in 1984, they developed the data encryption standards for the NSA,  DARPA and the Air Force.  Since then, they’ve worked on a number of military and defense projects, as well as educational and voice recognition software, they’ve won awards from NASA and are, generally, the company that provides the technology and support which powers the Internet.  Among other things, they currently offer data mining solutions  boasting, “There has never been so much information available so easily”; and information security using their R&D contracts with the NSA and DARPA to add to their impressive credentials.

Now I don’t want to sound like a conspiraloon, but the connections are interesting, are they not?  I mean if you think about the type of information that is being exchanged on Facebook… it might make for a neat little database to monitor potential national security threats… not that anyone would ever be stupid enough to use Facebook to do such a thing… at least I don’t think anyone would be that stupid…

But away from such speculation and back to the business of direct marketing.

In my experience, people don’t really care too much about their data privacy in matters like these.  I myself have come to the same conclusion about Facebook, the information that I provide on my Facebook and the things I do on there while I’m logged on, are seemingly inconsequential.  For example, right now I am having a back and forth wall battle about not being able to attend a dear friend’s bachelor party, and I have just added the annual Halifax Zombie Walk event for Saturday.  I don’t have any of my “favorite” things listed… I play Scrabble with friends and look at their pictures.  Facebook has none of my real-life contact information, save for an email address I created specifically for the purposes of Facebook.  And, Facebook will never acquire any of my financial information… ever…. As long as the advertising doesn’t get too in my face, the introduction of this new policy will not alter my uses of Facebook.

However, for some reason, the operators of these sites think that in your face advertising still works.  They think that if the link presented is attractive enough, and appeals to the viewer enough, the link will be clicked… but even as the link is clicked, that doesn’t mean a transaction will occur.  I have often wondered how much online advertising in this way actually pays off.  Is targeted online advertising more effective than regular advertising not in terms of clicks, but in terms of actual transactions?

Take MySpace for example… it is the excessive advertising and spam that has driven away most of its moderate users.  The intense users don’t even notice the ads, and the new users generally aren’t trusting enough of the Internet in general to make purchases online.

I think it’s funny that people assume privacy on Facebook, and that Facebook presents it’s “privacy” policy as protection for the user, when it appears to be more a way for Facebook to protect its data, for them to say who has third-party rights and who doesn’t.  What would really impress me, and perhaps the only thing that would lead me to believe that Facebook did care about the privacy of its users, would be for it to release a list of the major third-party users of Facebook data.  Then, the user can make an informed decision as to whether or not they really wanted to use this particular SNS, instead of using it and hoping that no real harm is being done by it.