As the rumors are still swirling about Facebook leaking private messages on a wall (a claim Facebook continues to deny*), and increasing pressure to earn revenue, Facebook presented its case to marketers in an attempt to draw in more advertisers.
So, Facebook’s plan is to target individuals with advertising. How does it plan to do this? Well, in a way that sounds a bit like it’s stomping all over our privacy again. Read that blog post from Facebook and tell me it doesn’t give you chills.
Facebook’s new forays reveal the rich trail of data that consumers can leave, often unwittingly, every time they buy groceries with a loyalty card or when they longingly eye a pair of shoes online. All of that data can trickle back to Facebook: With nearly a billion users, the company can find those consumers when they log on to Facebook and direct tailored ads to them. In an experiment that stirred some controversy, Facebook linked arms with Datalogix, a data-mining company, to glean what individual shoppers buy at offline stores. Datalogix says it gets this information from loyalty card data and other sources.
In addition, Facebook is saying – in light of so many advertisers complaining about poor click through rates – that in fact, “clicks don’t matter.” Mashable attempts to explain the logic behind the theory:
To bolster his argument, [Director of Pricing and Measurement Brad Smallwood] cited research from Nielsen (the company, not the founder) that showed a 0.07% correlation between high click-through rates and actual sales. Smallwood also rolled out some new datafrom a study conducted with Datalogix that found 99% of sales generated from online branding ad campaign came from consumers who saw ads, but didn’t interact with them. The report also produced fuzzier statistics, like campaigns that “maximized reach” generated an average 70% higher ROI than those that didn’t and that campaigns that maximized frequency had a 40% higher ROI.
Whether or not brand decide to believe this theory remains to be seen. Regardless, this sort of advertising makes me wonder if continuing to use Facebook is that good an idea.
*In a recent article on CNN, Fred Wolens of Facebook Communications said when asked if such a privacy glitch is possible, “While not quite a technical impossibility, these systems are run on two separate backends which would require a non-trivial amount of work for this bug to be real.” In addition, CNN has been unable to confirm any such leaks actually happened, much to the consternation of many, many of my friends who say that private messages were shown. In fact, again according to the CNN article, “Facebook says that if you can comment or Like that activity, then it is a wall post and not a private message. In the past, users weren’t able to comment and Like posts, so Facebook believes members new to Timeline are confusing old posts for private messages.”