PS: I Think There is A *Huge* Business in Social Advertising

…just to put that on the record. I think there is a system of advertising that leverages what Mark has popularized as the "social graph". It's as big or bigger as AdWords/AdSense was. But I'm not convinced Facebook is going to nail this, any more than early search companies…

…just to put that on the record. I think there is a system of advertising that leverages what Mark has popularized as the “social graph”. It’s as big or bigger as AdWords/AdSense was. But I’m not convinced Facebook is going to nail this, any more than early search companies nailed AdWords. Why?


1. The social contract is not yet baked. By that, I mean the mainstream of society has not yet come to terms with the power/responsibility of our clickstream/digital social capital.This cannot be underestimated. AdWords came at the right time, in the right circumstances. It’s not like Bill Gross didn’t have it mostly right…

2. The entirely reasonable possibility that Facebook is entirely right, but not at the right time. In other words, as Alta Vista was to search, Facebook may be to social networking. What, then, was Friendster? Er…World Wide Web Wanderer?

3. The technology is hard, but not that hard. What might prove harder is getting the marketing supply chain to come along for the ride in time…

OK, there is SO much more to write. But soon, soon. I have a conference to produce first.

4 thoughts on “PS: I Think There is A *Huge* Business in Social Advertising”

  1. Completely agree re #3. CPM ads on social networks are the immediate “ad tonnage” reaction of most advertisers. the fine-slicing of facebook flyers could work really well, but there’s no scale in fine-slices. google solved the scale challenge nicely for search, a problem which gross and crew didn’t anticipate and which hamstrung Yahoo Search for way too long.

    the key to procrastination is recasting the task at hand: just combine your interest in this topic with your conference programming duties and ask everyone for their thoughts on the solution to this challenge. i’ll be jotting down their responses!

  2. Timing IS everything!

    History is strewn with AdWord, QVC, Prius and iPod-like ideas that were brought out too soon. Worse, after reading Taleb’s “The Black Swan” it’s now clearer that picking the right time is virtually impossible though taking a contrarian approach will improve your odds.

  3. I actually think it’ll be a small business because there’s little value that a middleman can provide. Of course, behaviorially targeted ads are inevitable and will augment other targeting methods like contextual.

    But, most new business will still happen as a result of recommendations from trusted 3rd parties. These can’t be bought or brokered or centralized. A platform might faciliate it. But, the business will look more like craigslist than google.

    I wrote a full post about it:

  4. It strikes me that the “social contract” between a customer and business is more implicit than explicit. Yes, there are T&C’s, but few actually read those, and customers form their understanding of the contract on expectations. These expectations are based on context and are often based on analogy: This service is like this other service, so I should expect this ‘contract’. The closer the analogy, the better the contract is understood by the parties. For example, many users may say “facebook is like google”, so a user will expect that search results will be aggregated and analyzed — but not search patterns or other activities will be communicated to others. Over time, though, as more services do something similar, and a company like facebook is placed in a context that is better suited, then perhaps the business that expands the social contract will be more accepted.

    Of course, such a process would beg a question: what happens when a business wants to modify its implied social contract? What if Google wants to act like facebook and have partners take action based on its cookies? To go even further, what about a cellular provider? They can not only track your calls and your internet activity, they can even build the most complete social graph, simply from your address book. Of course, such activity would be ‘evil’ — but what if a consumer knew and was getting free phone/data/web service as consideration? Would it still be evil? Would a cell phone company be pilloried? What if Google (or Facebook for that matter?) offered the service instead?

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