For my third prediction of the year, I’m going with one just a tad bit less obvious than “Facebook will go public.” There seems to be no doubt about that event occurring this year, though I’ve certainly heard intelligent folks argue that Facebook can and should figure out how to stay private. I’ve argued that Facebook ought to be a public company, if only to be held (somewhat) accountable given all the data it has on our lives.
But this prediction has to do with Facebook announcing and then launching a web-wide advertising network along the lines of Google’s AdSense. I’ve talked about this for years (short handing it as “FaceSense,”) and I’ve asked Mark Zuckerberg, Carolyn Everson, Bret Taylor, and Sheryl Sandberg about it on stage and off. The answer is always the same: We’re not interested in launching a web ad network at this time.
I predict that line will change in 2012. Here’s why:
– Once public, Facebook will need to keep demonstrating new lines of revenue and growth. Sure, the company already has the attention of 1/7th of all time spent “on the web.” But there’s a lot more attention out there on the Independent Web, and the default ad service for that other 6/7ths is Google’s AdSense, a multi-billion dollar business.
– Facebook already has its hooks into millions of websites with its Open Graph suite – all those Like, Recommend, Share, Connect, and Facebook Comment plugins. These buttons are pumping data about how the web is being used directly into Facebook’s servers. That data can then be combined with all the native Social Graph data Facebook already has, making for a powerful offering to marketers across the entire web. Think of it as “social retargeting” – marketers will be able to buy attention on Facebook.com, then know where folks are across the web, and amplify their messaging out there as well.
– Because Facebook is already integrated into millions of sites, it’ll be a relative snap for the company to start signing up publishers to offer their inventory to the social giant. It will be interesting to see what terms Facebook offers/requires – I’m assuming the company will match Google and others’ non-exclusivity (IE, you can use any ad network you want), but don’t assume this will be the case. Facebook may have an ace or two up their sleeve in how they go to market here.
– Lastly, let’s not forget that the team who built and ran AdSense is now at Facebook (that’d be Sheryl Sandberg and her ad ops chief David Fischer, oh, and one of the “fathers of AdSense,” Gokul Rajaram).
Critical to the success and rollout of Facebook’s web ads will be two key factors. One, the structural underpinning of the system: AdSense scans the content of a page and delivers relevant ads (though many other factors are now creeping into its system). This leverages Google’s core competence as a search engine (it’s already scanning the page for search.) Facebook’s core leverage is knowing who you are and what you’ve done inside the Facebook ecosystem, so the key structural construct for its web ad network will turn on how the company leverages that data. I imagine the new ad network might initially roll out just to sites that have Facebook Connect installed, so that visitors to those sites are already “inside” the Facebook network, so to speak.
The second issue is what may as well be called the “creepiness factor.” Search display retargeting is still a gray area – a lot of folks don’t like being chased across the web by ads that know what sites you’ve recently visited or what terms you’ve searched for. Cultural acceptance of ads on third party sites that seem to know who your friends are, what you ate for dinner last night, or what movies you recently watched might provoke a societal immune response. But that’s not stopped Facebook to date. I don’t expect it will in this case either.
Predictions 2012: #1 – On Twitter and Media
Predictions 2012: #2 – Twitter As Free Radical, Swiss Bank, Arms Merchant…And Google Five Years Ago
45 thoughts on “Predictions 2012 #3: The Facebook Ad Network”
I’m with you on this one, John. http://adage.com/article/digitalnext/facebook-skynet-smarter/143434/
indeed! Well said.
i definitely agree with you and to tell you honestly when my friend made use of FB to advertise his product i immediately said to myself that if everything goes well with FB advertising then there will be a competition between Google and FB. Another point, for me with the current ad program of FB this will only benefit Advertisers and not Publishers since they only have programs for the advertisers.
Yeah, totally agree. And Google+ will have ads soon as well.
YXJYXQHAPPY I like it very much!
Do you have any update about this?
Not yet. Though I think the pressure is on for Facebook to extend its reach beyond its own walled gardens, see the NYT piece today, and I’ll probably post an update about that later today if not in the next few days.
brilliant. it came true.
Why thank you!
Bang on with this one. Although it is a rumor, it is inevitable.
What do you think about them adding a real search to their content and monetizing that?
Was your reply clipped? I’m not sure I followed.
Next generation what?
Sorry next gen search. They cannot play Google’s game
Agreed. But what will it look like?
That’ll be the subject of future posts…