Thursday, December 23, 2010

Folks I Hope You Understand Facebook's New Database Marketing Strategies

Those of you on Facebook and other social networking sites must have noticed that Facebook, like Yahoo!, Google and Bing, has recently been asking you to provide more details about yourself.

Facebook now wants you to provide such additional information as your schools of attendance, your city of birth, your city of residence, and current employment.



The company also seeks information about your preferences in music, movies, TV shows and games. Facebook is also interested in your religious identity (even though its founder is an atheist). They also want to know your relationship status, whether you like men or women, and all those social tidbits. Of course they want you to disclose as much of your general activities as possible. What’s more, Facebook wants you to divulge your political party or political views, your favorite quotes, books, etc. Of course, Facebook has your birthday and sex even though you may have chosen not to make it public.

Do you imagine for a moment that Facebook is accumulating all this information simply to enable "your friends" on Facebook to have a richer mental portrait of you?

Well, it's not about you or your friends. It's all about dollars -- advertising dollars. Just hold on right here. I'll return to the dollars in a second.

You'll also notice that Facebook's new platform has a wider and more conspicuous space for ads than before. If you haven't noticed, then, look at the column on the right hand side of your profile page. You'll see the ads. And you'll see that the ads are informed by the information you have provided. Again, you'll notice that the ads column is wider and more conspicuous than before. The ads appear just below the "People You May Know" block, which suggests two possible "friends" for you. Now, you'll see the "Sponsored" ads below. This arrangement is not random by any means. A great visual gimmick is at play. The "People You May Know" block visually diffuses the fact that you are being seduced to stray into the marketplace - the money column - featuring the ads. The new platform was smartly designed to draw your eyes to the ads without you knowing what has just happened. And it works

In fact, when I studied the new Facebook platform and juxtaposed it to the former platform, I couldn't help but respect Facebook's marketing ingenuity.

Anyway, you better know that the reason Facebook is collecting all that extra information from you is to build up their database for marketing purposes. Which brings me back to that matter about advertising dollars.

Facebook is on an aggressive monetization mission. It's seeking to compete more vigorously against Google, which it considers its chief rival, for advertising dollars. On its part, Google views Facebook as a real threat to its advertising dollars goldmine. Facebook has a long way to go yet in its rivalry with Google. Google currently rakes in about $32 billion annually in advertising income whereas Facebook still manages to earn just about $1 billion annually, even with its nearly 600 million users worldwide.

So, here is the thing: The data that you provide to Facebook will enable the company's computer algorithms to point more relevant ads at your profile pages, and to encourage you to click on the ads so they can make money. Most of those ads are pay-per-click – which means that Facebook gets paid only when you click on the ads. Those ads are Facebook's bread and butter. That's where the company hopes to make billions of dollars in additional revenues. That’s why Facebook wants to know everything about you.

Targeted advertising is not happening only on the Internet. New technologies are being developed to direct more relevant (targeted) ads to your TV screen. With more sophisticated data warehousing and analytical technologies, you’ll soon be seeing different ads on your TV from what your neighbor who is watching the same TV station, at the same time, sees on his/her screen.

Anyway, there's actually nothing wrong with Facebook asking you for everything about your life. After all, you signed up for their "free" service and people are having fun providing the information anyway. Nor is it wrong for Facebook to use the information you willingly provided to make money.

But it helps – it’s wise – for you to know the nature of the game going on.

1 comment:

  1. Facebook is really one of the best social networking site today in the net. I'm not sure but I know that it is the 2nd or the 3rd site that is most visited by internet users. So it is not a surprise that Facebook is very useful in marketing.

    AllenCarlos

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