Facebook Ads - do they have a cluetrain?

So...Facebook's new Ad platform is the next 100 year turn in the way Ads are served, we are told. Sez Zuckerberg:

“Once every hundred years media changes. the last hundred years have been defined by the mass media. The way to advertise was to get into the mass media and push out your content. That was the last hundred years. In the next hundred years information won’t be just pushed out to people, it will be shared among the millions of connections people have. Advertising will change. You will need to get into these connections.

“People influence people. Nothing influences people more than are recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising.

Now we've had more time to look at the Facebook proposition, actually I think Mr Zuckerberg is being uncharacteristically humble as this is even more momentous - it marks the point at which Planet Advertising finally left Planet Earth. (At Ad:tech last month the plenary topic on Day Two was by Virgin's new Space Tourism business - see here - I wondered about the connection between space and Ads at the time, but know we know!). Even the usually fairly rational Forrester Research has fallen hook, line and spaceship for this one. I'll reprint some of it here as its just too other-wordly, asw it plots the rise of the FanSumer - the Fan(atic) Con(sumer)!

A likely scenario:
Shauna, who enjoys Revlon products, indicates she’s a fan of the brand and becomes a Fan-Sumer. Marketers at Revlon can then purchase SocialAds, which will then display on Shauna’s newsfeed or on ads on her profile. If Shauna purchases Revlon makeup from Amazon, her newsfeed could indicate an eCommerce links recommending it to her 100 trusted friends, resulting in further sales.

No doubt you spotted the flaw immediately, dear reader - there is a glaring gap of planetary proportions in the logic here - and not just you, but so have others: As a respondent on the Forrester blog noted:

What incentive is there for the “fan-sumer” to remain opted into this system? Using the scenario above, why would Shauna willingly allow Revlon to market to her friends through her news feed or profile page? As a Facebook user, I could see myself sharing certain brands that I’m extremely passionate about with friends through the methods I control (posting a link / video of the brand, adding the brand’s app, etc), but I’m not sure I’d want the brand to control the message.

Perhaps I’m missing something, but I don’t see how this would work advertisers other than the hottest brands around. Those companies probably don’t need to advertise to begin with. There are clear incentives for the advertiser and for Facebook, but what’s in it for the consumer?

No, I don't think you are missing anything - for Fan-Sumer read Paid-Sumer. Its the move online of teh offline viral approach of paying a few people to spread the word about Product X. This is just the plundering of the "trust" bit of a trusted social network to flog stuff down it. However, on an online social net the links are (i) visible and (ii) not erasable. And guess what - the minute we see trust being plundered, the trust breaks down and it stops working.

Now, to be fair, it is clear that user data and advertising will need to get together in order to help subsidise stuff we want but don't like paying for, but this is too one sided. The evidence of what works is pointing towards enabling helpful and relevant conversations. But this approach won't do that - its more designed to allow a brand to force entry into a closed network by co-opting one of the nodes. In that respect its architecturally quite similar to some forms of virus hacking. And all the evidence of the way social networks operate is that we tend to cut off rogue nodes once we identify them - I suspect this approach works in a "first transaction" scenario - the first time Shauna spams me - but if she continues to do so, I will cut her adrift, so I don't think its a lasting model as currently described.

Anyway, on with the show....

Implications for Facebook:

Members have more control over ads
Facebook users can opt to turn off social ads, and friends of that user can ‘dial down’ endorsements they see using preferences. We believe that Facebook is attempting to respect the rights of users by giving control to members to ‘opt-in’ to become a Fan-Sumer.

This is the opposite of respect for users. Respect for users is the right for their privacy not to be mined. In my view this will be the catalyst for a major user backlash if it is abused...if I were all those Brands that have jumped onto this one I would start backpedalling now, or at least preparing a face saving way out!

Quest for Fans will cause brands to beg
Since social ads only work if a member has indicated they are a fan, brands will be working to earn and buy fans to accept them as members. Expect a lot of noise to be generated from this activity as brands run campaigns to encourage members to add them as fans through discussion boards, banner ads, and special offers.

In other words a degree of spamming, cold-calling and flacking heretofore unseen. The endgame here is (surreptitiously) paying members to add them as fans and do the spamming.

Hard to qualify a “business”
Facebook is limiting these features to ‘real’ businesses and organizations. Expect an entire team to be crawling and dealing with this qualifying the issue. As recent member accounts have been disabled from Facebook, expect businesses and organizations to encounter same issues.

ie the cost of Ad serving just jumped...and it ain't scalable either

Limited ad supply to raise prices
Because Facebook members will see only two social ads per day, we expect the supply of ads to be in scarce supply and thus raising prices and not matching the value. This could shift ad buying to large brands who have experience buying and managing search and direct response ads.

Words fail us at this point.....on the one hand, this is a governing function on the system being plundered too heavily, but on the other hand if it is so small a prize - immaterial - then why bother risking all the opprobrium this could cause. Clearly the idea is to trial the system, fine tune it, then ramp it up.

Our Call: Brand affinity leads to community endorsements and more trusted marketing.
We see this as a win for Facebook, this highly targeted system isn’t just about web advertising but about brand affinity and hooks into what’s really important, trusted endorsements from people in a network. This truly is the next generation of advertising. Facebook tells us that the worst case it will be 2 times click through rate over the performance of (existing is 4-26%)

So there it is - because you are my friend on Facebook, I will continue to trust you when you flack something rather than when the brand flacks it themself. And at a higher performance rate and pricing than current to boot, according to....Facebook.

Our Call - The Cluetrain has finally left the rails.

Planet Advertising desperately wants to believe we will all trust all our "friends" who start spamming us with Ads, but they misunderstand the entire dynamic of trusted networks. We trust friends precisely because they don't do this sort of thing. Once they start, we stop trusting them - its dynamic, not static - you have to keep on co-operating with me to keep my trust, its not a given.

And, as anyone who is familiar with the game theory in behavioural economics will tell you, once we suspect we are being played for a sucker / taken advantage of, we will take revenge - even to our own detriment. The backlash on this, since it has been done so crassly, is going to push Planet Advertising back far further than it need be.

(In fact, I rather think the original authors of the Cluetrain Manifesto saw this coming down the tracks, Doc Searls for example is leading the charge in VRM approaches that put the control of the user's social assets back into the users' hands)

Postscript - it would seem that Nick Carr has seen roughly the same issues we have...see here.

Post Postscript - if you read some of the major blogs' comments sections (and some of the blogs weighing in, in fact), there is a huge wall of praise for this approach...clearly we at Broadsight either don't get it, or these Fanboi's don't get it, or maybe they have become the first Fan-Sumers

Post-Post-Postscript. While we were working it seems like we made the front page of Techmeme with this post (first time ever for us). If only we'd known....would've added a bit more nuance to some of the points to explain them better. Doc Searls makes a thoughtful addition here - I would like to think he's right, and that the Facebook guys will be prepared to iterate.

Post -cubed-Postscript - I have commented on some of the comments in this debate here