The last month or so has been very interesting....from the announcement of the next 100 Year Cycle in Advertising onwards, Facebook has been in the national (new media) news every day. The reason is that it is pushing the limits of new media advertising as hard as it can, probably driven by the need to justify the $15bn valuation the Microsoft investment (
may have) implied.
This has driven Facebook to rush into new areas of Online Advertising where other (far from angelic) players still fear to tread, and has thus made them a very interesting laboratory to test where the boundaries of user privacy, advertising, law and operating economics lie.
So far, most of the push has been from the point of view of what Facebook can do unto its users, mainly via Facespook (aka the Facebook Beacon Ad Spyware system - of which more is written in Broadstuff
here,
here and
here) but today comes the interesting note in the NYT that some users are piggybacking the Social Network's links to do a bit of
their own advertising:
More than 1,500 Facebook users have started placing advertisements on their own profile pages–despite the social networking site’s rule against such ads.
They are posting them with the help of a Montreal-based company called Weblo, an advertising network that sells ads onto people’s blogs and social networking profile pages.
Now this is going to get very interesting, because sauce for the goose (to carry on laying golden eggs) is clearly not meant for the gander:
Facebook does not allow users to sell ads on their profile pages. Chris Kelly, Facebook’s chief privacy officer, told me on Nov. 6 that is because Facebook does not want people’s profile pages to become cluttered.
“We don’t want a free-for-all,” he said.
Clearly not....Facebook wants a Free-for-us, charge the rest of 'em approach.
However, given that Facebook and all other User Generated Content businesses are essentially getting that user generated content for free today, its not unreasonable to assume, as technology improves via players like Weblo, that a C2B play will emerge where users can start to exert some control over the supply chain and thus extract some value.
After all, this is the implied endgame of a C2B play, as it puts more power in the hands of the users. And in fact Weblo is just part of a trend - if you look at the work being done by Doc Searls et al in the Vendor Relationship Management (
VRM) space (disclosure - we are also doing work in this area) and others, its clear that this is a trend that will increase.
Strategically as well, it is inevitable. There are two key assets the user inputs:
(i) Content we have produced, that drives other users to visit the site and interact with it. Social nets are unique in that the creator is the consumer (think of a Social Net as a democratic content system - a way of ensuring that everyone, not just the talented, are creating content by throwing sheep, writing on walls, putting up pictures etc)
(ii) Monetisable value in a Social Network connections via advertising, and that is driven by the Net Present Value of your and my future spending intention, and is information held by you and me.
Most of the current attempts at "behavioural targeting" are fairly crude attempts to trick us into revealing this value (or in Beacon's initial case a fairly crude attempt to bludgeon it out of us and onto our social nets). Clearly the minute we get some power of negotiation for it, which technology must provide, then we will start to manage it.
And the UGC crowd are not alone - this trend will also be driven by the "Pro" content producing ecosystem, who are also looking for models by which they can extract benefit from their work in a digital medium. Piracy is fun, but ultimately not sustainable if content creators make no money.
We predict this will be one of the most interesting battlegrounds for 2008......
