Tag Archives: facebook

Websites Should Be More Willing To Connect Brands With Consumers

In a Terms of Service update released last week and to be effective on November 11, Google announced it’ll start using Shared Endorsements on it’s advertisement network. It’s similar to Facebook’s Sponsored Stories, launched back in 2011: users that reveal their liking of, say, a brand, might serve as pitchmen for it to their friends in an eventual ad.

The most appealing aspect of the approach is that it resembles the word-of-mouth effect, a powerful advertisement strategy in real life. Another possible reason for Google’s move is the fact that Facebook has already experimented with the option, so online social-network users should by now be more open to the idea. Finally, the search giant might be just adopting the competitor’s approach out of the fear of missing online ad money’s migration to social.

But Google shouldn’t bother copying Facebook.

First, because, although the ad format is relatively successful — Facebook made about $4 million per day out of Sponsored Stories by the end of Sep 2012 — users complains eventually led Zuckerberg’s company to decide dropping the feature. In fact, Facebook was subject of a class action for using Sponsored Stories without permission.

Second, while advertisers are indeed becoming more faithful about social websites, simply adopting a competitors format is not guaranteed to grab their attention if the website doesn’t have an appealing audience — which still is the case of Google Plus.

Third, the word-of-mouth effect is very difficult to implement, for the nuances of influence in real life are too complex to simulate — specially since the psychology of online interactions differs from that of face-to-face relationships.

The main problem with most online ads is that the websites portraying them seem to be sorry to show ad content, instead of proudly trying to connect brands with consumers. Most websites are afraid of bothering users by asking them directly about what kinds of products they would like to hear about, and instead try to guess what they want based on their online behavior — a task difficult even for a human expert.

Consumers are eager to learn about new products. Besides, people who ever tried to get their business to reach an audience understand how important advertisement is. These users would probably not mind spending a few minutes telling a website what kinds of ads they’d like to see.

If a website were to show quality ads, if it were really willing to put business in contact with consumers, and vice-versa, perhaps users would be less afraid of releasing personal information. And if Google Plus were the one to do so, perhaps people would finally seriously consider using it. Copying Facebook’s approach certainly won’t do it.

(A version of this article appeared in Washington Square News.)

Social Media Market Saturated Despite Risky Business Model

When was the last time you clicked on a Facebook ad? Option A: you can’t remember. Option B: you never, ever, clicked in any of the ads. Option C: does anyone actually clicks on those ads?

Apparently, people do, for 85% of Facebook’s revenue comes from advertisement (the other 15% is from selling virtual goods), and you wouldn’t expect Madison Ave. to divert from traditional advertising models if they didn’t see solid statistics backing the option.

There are two ways in which such statistics are good-looking. Either the company is very good at targeting a niche market, or it is not so good but have a huge audience. Facebook is on the second category. In fact, due to the currently low success rates of target advertisement, internet business who provide free services have no alternative of survival but to become big enough so that their size can compensate for that. (Unless they plan to live from donations, such as in Wikipedia’s case.)

Two questions then arise. First, since there obviously isn’t market for a lot of big social media websites (after all, people have to eventually stop looking at pictures of friends or cat videos and do some productive work), why is it that we keep seeing new social websites popping up? Second, why is target advertisement so difficult that internet companies can’t afford being small?

The answer to the second question involves a paradox. On one hand, everyone would be delighted to hear about a product they would enjoy having, a new band they would love to listen to, a play they would like to see. On the other hand, most people are obsessed with privacy, refraining from giving personal information to this or that company. Though privacy is certainly a right, without more precise information companies can’t provide more adequate ads. There’s no way around this. Not until A.I. tools are so advanced that user preferences can be inferred by interpreting jokes and comments.

The first question is more obviously answered: there are a lot of investors, with no better idea about where to put their money, that are too afraid of missing the “next big thing.” That’s why we have Path, Tumblr, Pinterest, and many other social media venues whose purpose intersect, most of which we don’t even hear about. What’s their business model? You bet it’s advertisement. Which one is going to grow enough to profit from advertisement? Take your bets.

Apparently, there’s no shortage of entrepreneurs dreaming they have the perfect alternative to Facebook, nor of investors to back their startups. But we’ve already got enough tools for connecting, liking, and sharing. It’s time for entrepreneurs and their funders to think of something else. According to recent reports on decline of time spent, and multi-week breaks from Facebook, some internet users already are.

(A version of this article appeared in Washington Square News.)