Is Facebook a Viable Advertising Platform

Is Facebook a Viable Advertising Platform

I posted a link on the AMWSO Facebook page suggesting that the majority of clicks on Facebook ads were being generated by bots. The comment thread got me really thinking about Facebook being a viable advertising platform.

First, let’s take on the proposition made by the linked story we were discussing. The claim is that a vast majority of clicks to Facebook ads are being generated by bots. IF True there are a couple implications to consider:

1. The only party to profit directly from Facebook ads is Facebook itself. Unlike Google Adwords, there isn’t any revenue split with publishers. Facebook takes ALL of the ad revenue. So the only party to directly benefit from bot networks creating ad clicks, is Facebook. Wow, consider, if this is the case, that’s a pretty massive level of shenanigans.
2. The other possibility for motive behind creating ad clicks, would be competitors trying to drive up the costs of their competition. If I’m selling XYZ widgets, and there are 2 or 3 other merchants selling the same on Facebook, I would benefit if they had inflated ad costs (clicks) with no resulting sales increases. In fact, my competitors at some point would probably get wise and dump FB as an ad platform all together, leaving me as the sole advertiser of widget XYZ.

In either of the above cases, it is wholly Facebook’s responsibility to take action and correct this situation. Of course again, that is if the ad clicks are indeed being generated mostly by bots. Interestingly, in various discussions about this story, there wasn’t a great deal of surprise at the figure. Why?

Well, let’s consider the platform of Facebook. As Nancy suggested on our Facebook comment thread, people don’t come to Facebook to shop…or even really search for things. They come to socialize, see what their friends are up to, look at pictures friends are posting and to play games. Of course Google, where people are coming to specifically search for something (often times a solution/product), should perform better directly as an ad platform. That is where an ad can generate an immediate and measurable result.

That being said, immediate measurable results still haven’t stopped companies from advertising on TV during shows, sporting events, billboards, subway tunnels, and all manner of things. People aren’t searching specifically for a solution in those circumstances either. But they get an image/idea planted in a person’s head, and hope that the idea will be followed up on or acted upon later.

I would suggest Facebook can be a bit in-between both of these concepts. Some people will see an ad, spark an immediate interest and click through and onward for some action. Also, ideas might get planted to be acted upon later. However I can see some immediate difficulties for Facebook as it stands now.

1. Their ads just don’t seem visible to me. They are off on the side and in most cases I don’t even notice or pay any attention to them.
2. They are very limited in what they can show/tell. A TV ad or radio spot, and even a billboard can “tell a story” to interest someone. I haven’t seen many good Facebook ads that “convey a story” yet.
3. I think Facebook is hesitant to move the location of ads more to the center of a person’s vision, since I imagine this would annoy a great many people, and they’ll start to leave the platform. Especially now with growing competition from Google + and even Twitter (and perhaps Foursquare).

The Future Potential for Facebook Ad Interest

All this being said, I don’t think display ads on the Facebook site will be of any consequence in the future. I see the future is all about mobile and location. Imagine:

• You walk into a mall, and the Facebook app “knows” this. It can then present you with promos, sales, information from the merchants in that mall to entice you to visit their stores.
• You’re on a commute home and stuck in traffic. The Facebook app knows you’re near a favorite restaurant, and that restaurant can push an offer out to you, come in now to wait out the traffic and get a free dessert with your meal (or something to that effect).
• You’re on vacation in France or in Florida, and the Facebook app presents you with, “Hey stop into XYZ restaurant, it’s right around the corner and some folks from your hometown just came here last week and this is what they said….”

Facebook right now has the critical mass of people to do well in this space. They just have to keep those people engaged to Facebook until the future arrives.

A First for Affiliate Applications on Facebook

I've seen a lot of chatter around about, how will merchants use systems like Facebook for affiliate marketing, or even how will affiliates use it, lots of chatter, little action, until Scott sent me an application he has developed to look at, bingo!

Scott (aka Mallicious) has created a really cool, coupon sharing, snipping and commenting application for Facebook, that allows any user to plug in the coupon system to my profile, share it, share individual coupons, snip coupons for later use and comment them

We are the first social shopping engine to combine coupons, deals and price comparison to help consumers discover deals through their social graph.

Users can quickly and easily create their own deal feed that is automatically combined as "Social Deals" for each of their friends. Consumers can now get gift ideas, discounts and coupons from their personal social circle.

The main coupon system page shows lots of data for the individual coupons too, snipped how many times and community comments. Might be I've overlooked, or not been invited to use other Facebook applications that open the way to merchants to get involved, but this is the first affiliate marketing application on Facebook that I have seen that adds value and looks like it can succeed in leveraging a social network.

What Does OpenSocial Mean for Affiliate Marketing?

Within tech circles, there is a huge amount of buzz swirling around the Google OpenSocial initiative. Google has partnered up with Myspace, Hi5, LinkedIn, Salesforce, Oracle, Bebo, Ning and a host of others (however not Facebook yet) in support of an open API for social web mini-applications. What the OpenSocial initiative is really about is providing a common API, or common language for application developers to write mini-applications for the various OpenSocial participants.

What are the advantages or uses of applications?

Using mini-applications/apps/widgets, companies / affiliates can now efficiently extend their website experience to existing communities on popular social networks.

What are social networks?

An existing network or community where friends or people of similar interest share.

Facebook was the first social network to open up their API for application development. Applications sat on top of the Facebook platform, and were accessed and used by users through their Facebook profile pages. There are a few affiliate approaches with applications; from Social Shopping Mall which allows users to share / clip and use coupons through the app to iBought which allows product recommendations and purchases through the app.

The OpenSocial API takes the Facebook concept and transforms it to an open standard accessible to any social network. Now with the OpenSocial APIs, application writers can write one application and have it run on a variety of platforms, thereby opening up exposure to even more users. One interesting side note about the OpenSocial participants, Oracle, SalesForce and LinkedIn have chosen to join up, thereby leading one to believe we'll be seeing many more business related applications in the future.

I have listened to some affiliates complain that they've tried to market on Myspace or other social networks with very minimal success. The initial attempts were flawed; making a profile, adding as many people as possible as friends, and then trying to push a marketing message out to these people. This approach didn't fill a need or solve a problem. Now with the opportunity to be creative and innovative, and write an application that can fill some need or solve some problem, marketers have a  new world of opportunities before them.

Will this be the gateway to instant success, or lead to fast millions, probably not. We are potentially riding the very beginnings of a shift. A shift away from traffic being driven by open searches through search engines on the open web, to more defined niche based traffic coming through user selected applications and widgets. Why not be prepared for when this potential shift picks up furious momentum?

If you are a merchant, do you have a social web strategy? If not, one potential way to dip your foot in the water is through your affiliate program. Partnering with value adding affiliates who are already building social applications can give your business and products exposure to the social web while minimizing your risk with the new medium.