“Will this model work? SocialAds is a step in the right direction toward having advertisers join – rather than barge in on – the conversation.”
“For example, going forward, a Facebook user who rents a movie on Blockbuster.com will be asked if he would like to have his movie choice broadcast out to all his friends on Facebook. And those friends would have no choice but to receive that movie message, along with an ad from Blockbuster.”
I’m sorry, but that is barging in on the conversation. A friend who constantly bombards me with ads will get pushed out of that circle of trust fairly quickly. The advertising isn’t joining the conversation – he’s paying my friends to be promoted. He’s essentially buying word of mouth.
Brian claims that SocialAds will “yield immediate benefits for consumers” because:
“More relevant advertising reduces the clutter consumers must wade through, making it easier to connect with relevant brands”
That’s certainly true. The more relevant an ad is, the more it becomes useful to the consumer. But social networks like Facebook are simply too broad to be relevant. I have a couple of hundred Facebook friends. This can be divided into a lot of much smaller social groups, who I know from different areas of my life. They’re not a coherent group, and the majority of products which I’d end up promoting to them would be irrelevant to most of them. That is, for most of my friends, most of what I’d promote would be spam.
“At the end of the day, social networks like Facebook provide a fantastic service to millions of people. For free. This is possible because they sell ads. By creating a smarter platform to connect advertises with only the consumers who are likely to be interested in their products, they’ll generate stronger ROI for brands who, therefore, will be more inclined to continue investing.”
This, of course, is the same argument that the advertising industry has used to justify its existence since the dawn of… well, advertising. “Without advertising,” the theory goes, “you wouldn’t have newspapers/magazines/radio/television”. And there’s some truth to that. Where the cost of production of media are high, advertising is a hugely-effective method of supporting it.
The problem is that there’s a constant trend on the internet for the democratization of tools, which lowers barriers of entry to being able to create something, and thus the long-term marginalisation of larger sites in favour of smaller niches. Blogging is a great example of this. Once, the tools to create a content-rich frequently-updated web site were the province solely of high-end content companies. The creation of blogging tools democratised this form of publishing, handing free tools over to millions of content creators.
As the cost of the means of production (to borrow a phrase from Marx) drop, the need for advertising to support efforts falls. I place ads on this site simply to cover the hosting costs, and as a means of learning more about how online advertising works – the content I produce could easily be distributed without ads, and many great sites do so.
The same process will inevitably happen to social network tools, and once it does happen, there will evolve another vast area of the web which is effectively closed to advertisers. And, where people do carry ads, they’ll be on Google’s terms.
“In the Facebook SocialAds model – compared to traditional online display
advertising – consumers have a tremendous amount of power as companies
can only advertise if users have raised their hand as fans of their
brand. Certainly, this will lead many brands to go the extra mile to
recruit “fans” through what could, as some have argued, become a
barrage of campaigns to sign up new fans through special offers, banner
campaigns and more.”
In other words, the same old process of buying brand advocates. You know, giving them tcotches and t-shirts and miscellaneous crap. What companies will much less rarely do is the hard stuff which wins genuine brand advocates: creating compelling products and services which represent the values of the company and which are in tune with the needs of the customers, and which surprise and delight them.
You can’t turn a silk purse into a sow’s ear, and you can’t make people buy shitty products by paying their “friends” to recommend them.