Facebook recently announced that it would allow advertisers
to use their own lists of email addresses to target consumers via Facebook. This feature, called Custom Audiences, will
give advertisers another touch-point to their existing customers, and allows
advertisers to serve up more relevant ads to consumers given the data the
advertiser already has on that consumer.
I am very intrigued by this Facebook functionality for several
reasons. From the advertiser perspective
– advertisers are becoming more and more
data-driven and ROI-conscious. The trend
suggests consumers are spending more time on Facebook than in their inboxes,
and if Facebook is where consumers are, that’s where the advertisers should
focus their resources. Advertisers will
likely view this as a positive because they already have the data on their
customers and can segment and tailor ads as needed to incent certain actions
from the customer. However, this could
also become more costly for them depending on the specificity of ads and how
segmented/how many creatives or messages the advertiser wants to have in a
given campaign. I’m curious to see how
much advertisers are willing to spend on this type of functionality and the
results they could potentially see given they are not able to glean any
additional data from Facebook on these consumers, other than what they already
have…or unless the consumer completes the call to action and transacts with the
advertiser (which is the hope!).
From a consumer perspective – as we discussed in class, and
we know from our own experience, our time on Facebook is not typically spent on
clicking ads. As more consumers are
accessing Facebook via mobile or tablet devices, ads may become an even smaller
part of their Facebook activity. Given
the “viral” nature and increased “share-ability” the Facebook platform
provides, if a consumer sees a highly targeted ad and receives an offer based
on his past spending activity at a specific advertiser for example, he may want
to broadcast this to his Facebook community, which could act as a customer dis-satisfier
if other consumers see another consumer receiving a richer offer, etc. Another potential watchout is Facebook users’
potential privacy concerns – will consumers view such personalized ads as too “big
brother”?
While I think this functionality will be highly profitable
for Facebook, I’m interested in learning more about advertisers’ results once
Custom Audiences is fully rolled out.
In light of the botched IPO I think Facebook has become increasingly aggressive in its focus to monetize the large pool of user data that it’s amassed. There has been some indicators of success for B2B and B2C marketers.
ReplyDeleteSocial Media Proves Value, Gets Budgets (http://www.emarketer.com/Article.aspx?R=1009352)
“ Facebook was the most popular site for B2C marketers, with 65% reporting that they spent money there. Only 40% of B2B marketers said the same of Facebook…
These investments in social sites are showing results. Two-thirds of B2C marketers (67%) said they had generated leads from Facebook, and 39% said they saw sales as a result of outreach on the site.”
Despite these early indicators, there is a degree of healthy skepticism about actual contribution of social media towards these leads and sales.
Aside for the actual conversion of the marketing dollars into leads or sales, I think there is a user data and privacy issues as Kelly pointed out that might surface again. What information to share and in what manner can sometimes be a minefield as was evident by the last attempt at “defaulting” user privacy settings.
http://www.salon.com/2010/05/17/facebook_privacy/
It is crucial that Facebook tread these waters very carefully and avoid a debacle relating to its most valued commodity. Users.