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Thoughts on Facebook Ads

I'm reading the initial coverage of the Facebook Ads, and had a few thoughts, in no particular order:

1. Interesting Ad Products...I think. Not having seen the screen shots, I'm not sure I entirely "get" the various products (social ads, insights, beacon), but the gist of it is using the demographic data Facebook has from users to provide messaging opportunities for advertisers. Since Facebook's users information is usually accurate, this provides some interesting opportunities to target.

2. Does it Matter if No One Clicks? Regardless of the targeting capabilities, at the end of the day we're talking about display advertising (i.e. not a direct response to a user action). And the one thing we know about display advertising is that no one clicks on it - well, not no one, but much less than search. So, if you're a marketer and you have a limited marketing budget and you can spend your money on a product that generates clicks and one that does not, what do you do? Still a fundamental question...

3. Or Is this the Beginning of Brand Advertising? Unless of course this is beginning of the coveted brand advertising package, in which case clicks don't matter. Perhaps it's possible. In that case, the success of the program comes down to pricing. There are plenty of brand ad opp's out there now (tacoda, ad.com, even adsense) that are priced, for the most part, at remnant prices. If Facebook wants to build a business on this brand advertising, they need to make the case that their demo information is SO much better, that it deserves a premium price. Maybe it is, but, as is the typical question: how do you measure?

4. Ode to a Marketing Budget. Life is good when you've just raised $240m and have Microsoft as your partner. You can do things like: rent out Loft Eleven, hire Charlie Rose to moderate a panel, etc., etc. and not feel like your pressing your bet. Life becomes alot easier.

5. Ode to a non-cannibalistic product. At Topix, when we did our re-launch we talked about putting together a similar event, featuring the CEO's of Gannett, TRB, etc. as a way to get some huge press attention (like Facebook is getting). Unfortunately, the newspapers always thought of Topix as competitive to their local brands, so they would never step-up and get behind any marketing efforts in a serious way. Imagine if Google won the Facebook deal, given their relationship with MySpace and their own products (Orkut), would/ could they step-up? Microsoft, for better or worse, has no such issue.

6. Impressive list of Partners. Coca-Cola, Dove, Sony, Verizon. Really impressive. Getting any one of these guys to do something - and working through the infinite layers of marketers, media buyers, ad agencies, etc., etc. - is hard enough. Getting them all lined up so you can announce them all on the same day - really impressive. Nothing better for a product launch than a great list of partners lined up...

In any event, congrats to Facebook. Competition is always a good thing and we've been going on waaayy to long with only one real game in town.


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