Written by Jun Lee
Facebook is now on a path to serve more banner ads than Yahoo! or Microsoft, according to a recent Wall Street Journal1 article. Until now Mark Zuckerberg has paraded Facebook’s 500 million users in front of advertisers with antiquated and largely ineffective2 banner ads, even as Facebook’s click-through rates are even less than the standard <1%.3 According to a new study4 by TubeMogul, video ads have a lot of promise. But the big missed opportunity is leveraging the core idea of what social networking is meant to do for people—build friendships. Some companies are figuring this out already.
In a recent poll we conducted5, we found that more than 90% of the respondents wish that Facebook would help them deepen their friendships in the real world—yet only 40% said it has actually done so. That’s a small but important misalignment. Social networks are ostensibly designed to serve a basic human value: friendship. But what they really do is broaden your social network as quickly as possible without the relationship-building typical to exclusive, close-knit friendships. So for Facebook and its advertisers to tap into what really matters for its users they need to get into the business of making people better friends.
90% of the respondents wish that Facebook would help them deepen their friendships in the real world—yet only 40% said it has actually done so.
How can Facebook and its advertisers improve people’s friendships?
One way is for Facebook to understand who you’re keeping tabs on, collect information about how people interact—who comments on whose posts most often, for example—and sell that information to advertisers. Facebook has just begun collecting this data by putting a “Like” button on every comment on the site. Knowing whose comments you “Like” could give Facebook an idea of who you’re following and more generally whose opinions jive with yours.
Developers will have access to this data, meaning they can then entice people through cooperation—online and offline—that feeds into relationship-building. So can their advertisers. Facebook is already big on “semantic search”—they’re looking at the context and definition of words in your profile, not just keywords. So if Facebook knows you and your friends are into snowboarding they could offer you a discount, say, on lift tickets if you buy as a group. That kind of promotion brings friends together and gives them a fun experience to share. Or if Facebook knows you and your friends use a certain type of guitar it means they can help advertisers decide what kind of campaign to serve you—if you’re already a fan of Fender guitars they could run an “upgrade” campaign. If you’re a Gibson enthusiast they could run a “switch” campaign. You can start imagining endless games around informal ways to flirt with acquaintances. Foursquare and Gowalla are already good at bringing established friends together per their check-ins around town. Once they have access to Facebook data (that’s coming) they could initiate people meeting each other based on their shared interests. Whatever the tactic, the point is to get people to build out their friendships through shared experiences rather than just maintain them via generic wall posts.
Only a few progressive-minded companies are starting to experiment with the idea of taking online Facebook users offline with their friends. On May 26 Disney created a Facebook app, Disney Tickets Together, that let users buy tickets to Toy Story 3 weeks before the release date of June 18—and prods your Facebook friends to buy tickets as well. (The app smartly lets you invite non-Facebook friends.) And in June Microsoft, Verizon, and Sharp created a brilliant market ploy for the (almost immediately discontinued!) Windows Kin phone: They gave a woman named Rosa a phone and videotaped her as she traveled across the country visiting everyone in her network on Facebook. “We became real friends because of the act of asking for advice and talking,” says Rosa.
Her comment points to the massive opportunity awaiting Facebook and its advertisers: To build better relationships with consumers you need to improve relationships between consumers. The endgame is to make commercial goods useful to people rather than just a distraction. Whether you’re offering “friends” coupons to go out together or getting groups of friends to physically attend a sponsored event the goal is to get them to spend time together. Products are already the centerpiece of services like GetGlue and ThisNext—the former is a social network for people who want to recommend music, books, and movies to friends and the latter lets you amass a following for your “expert” recommendations. It’s proof there’s a big market out there for friend-to-friend product recommendations—one that could grow exponentially if Facebook started facilitating product-based interactions between friends.
Give people a way to hook others and you’ve got yourself a hook
While getting new or established friends to go offline together is great, what are the issues for marketing to friends online? Intimacy between close friends—and the trust that goes with it—is more valuable for marketers than loose ties among acquaintances. The trouble is figuring out who’s friends with whom and how close they are. The second big hurdle is to find the right context and benefits so that people are willing to open up much more of their lives for value in return. There have been failed attempts, but Facebook is getting closer with each try.
Beacon was fail one. Users railed against Facebook over this service for exposing peoples’ purchases on outside networks (Facebook let users opt-out after users became furious but some companies continued to surreptitiously send users’ purchasing info to Facebook).
Privacy settings was fail two. The idea was that if people could control who sees their posts they would be willing to share more—and give users the dials to tune up or down the level of intimacy they have with people on their network. (As we found in our survey, most people think it’s unbecoming when “friends” expose too much in a Facebook update.) The problem has been the labyrinthine and shifting policies that accompanied the settings—instead of being transparent and helping users figure out their preferences Facebook PR basically imploded and made the process opaque. So the problem may not be that users are intensely sensitive about privacy but that they need to be handled with care.
Facebook’s current “Like” buttons are act three. Facebook made it possible to add “Like” buttons to comments below posts, so now you can not only like a friend’s post but like the comments attached to it as well. What you like and who you respond to most often gets stored and made available to developers—who’s most intimate with whom and who’s interested in what topics is information that will be tremendously valuable to developers. (Once developers build their games or services to take advantage of this data advertisers can start putting ads into the games.) This technique of monitoring people’s social behavior is a more intelligent way of getting information developers and the advertisers they work with can use.) But to avoid a Beacon-like outcry advertisers would need to be transparent and upfront—and offer a mass opt-in—about how they make offers to groups of friends. Sophisticated campaigns will try to bring people together—again, playing off the idea that people want to build relationships through shared activities.
The big opportunity in this area is mobile phones, which could easily be set up to track interactions among people in social networks—whose phone number you have, how often you email someone, how much time you spend together. All that is valuable information not only to marketers tracking new friendships as they evolve from Facebook into the real world but also to users who could then benefit from a more “intelligent” phone that learns what information to share and protect with their core group of friends only.
Jun Lee is a partner at ReD Associates
1 Facebook Makes Gains in Web Ads, WSJ, May 12, 2010
2 Techpulse360.com, Aug. 12, 2009
3 Networking site cashes in on friends, Daily Telegraph, Jan. 31, 2009
4 TubeMogul: People Watch Facebook Videos Longer, And Click On More Ads, TechCrunch, June 5, 2010
5 500 Friends and No One to Call, white paper, ReD Associates, spring 2010