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Facebook: Changing Advertising Forever

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Facebook. You have heard about it by now, whether from your teenager or a friend, or lately you've read about it in the business section. If you think that Facebook is just a Web site for high school and college kids to share funny pictures and stories, you are dead wrong.

Facebook has already become one of the most popular social networking sites in the world, with some 50 million users today—and that number has been doubling every six months.

A large and growing percentage of Facebook users are over the age of 23. There are nearly 6 million Facebook users over the age of 23 in the United States, and more than 4 million users each in Canada and the United Kingdom. In fact, US users under the age of 24 make up only 30 percent of all Facebook users.

Whether or not you completely understand social media or social networking sites, the one aspect you must understand is that they are going to change the way businesses advertise.

Facebook is constantly evolving and improving its users' experience with new features and applications.


Advertising: from Mass Media to Personal Connections

Facebook is trying to change the way businesses market and advertise their products and services to potential consumers.

Google AdWords revolutionized the way businesses market on the Internet by selling advertisements in a live auction style and by publishing the ads to individuals who are searching for relevant information, solutions and products. Facebook intends to improve on this and deliver even more targeted ads to users of their social network.

At the November 5 launch of Facebook's new advertising platform, Mark Zuckerberg, CEO of Facebook, presented his vision for the future of advertising:

"Once every hundred years media changes. The last hundred years have been defined by the mass media. The way to advertise was to get into the mass media and push out your content. That was the last hundred years. In the next hundred years information won't be just pushed out to people, it will be shared among the millions of connections people have. Advertising will change. You will need to get into these connections."

Major Corporations Are Facebook Believers

Many major corporations have already committed to using Facebook as a legitimate advertising platform, including Blockbuster, CBS, Chase, The Coca-Cola Co., Saturn, Sony Pictures, The New York Times Co., and Verizon. Why are these companies so excited to jump on board with Facebook?

Because Facebook is offering the most targeted—and therefore one of the most powerful—advertising platforms that has ever been created. Imagine being able to show your company's ads to only the consumers within your target market.

Due to the amount of information Facebook garners from users, ads can be shown to a specific type of user based on sex, age, education, relationship status, keywords that appear in their profile, or even political views. It's the promise of true one-to-one marketing.

Facebook Beacon: Advertising at the Powerful Referral Level

Another new Facebook tool, called Beacon, alerts others as to what their friends have been buying online. When two Facebook users "friend" each other, each user can see the other's profile with their pictures, videos, or anything else that is included. Users are alerted to all of their friends' actions on Facebook through what are called news feeds.

These news feeds are based on the actions that the user and their friends make on Facebook. The feeds used to include basic actions such as posting a new picture, writing a message on someone else's profile, posting a new entry on your page's blog, or setting up an event invitation.

The news feeds are seen by all of a user's friends when each of them logs into Facebook. Many Facebook users have hundreds of designated friends, meaning these stories can be seen by a large number of people in some cases.

Facebook Beacon takes these news alerts to a whole new level, because now users can be aware of their friends' actions not just on Facebook but across the entire Web.

By placing a few lines of code on a Web site, a business can publish Facebook users' interactions with their site onto Facebook news feeds. Beacon enables businesses to publish such actions (e.g., a Facebook user purchases a product, signs up for a service, adds an item to a wish list). Once users perform an action, they are alerted that the Web site is sending a "story" to their Facebook profile and that they have a chance to not allow the story to be sent. If they do not opt out, then no additional user action is needed to publish the story on their profile.

For example, if someone buys a movie from Blockbuster online, then it is placed in their news feed and in their friends' news feeds; along with the story is a picture of the friend who purchased the movie and an ad for Blockbuster. This is advertising at the powerful referral level.

As Zuckerberg said later in his speech, "People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the Holy Grail of advertising."

Facebook Pages: Interact with Your Customers in an Environment They Trust

Facebook even has developed a means for companies to create a presence on their site for free. Facebook Pages can help businesses build their brand online.

Businesses simply go on to Facebook and create a profile. Facebook Pages allows businesses to interact with their customers in a familiar, trusted environment. When the page is created, one of the goals of a business on Facebook is to gain "fans" of their service or products. This is very similar to two individual users' becoming "friends" on Facebook, except that a business cannot view a user's profile. Businesses can increase their chances of gaining fans by making sure that their Facebook page is constantly updated with fresh content and new applications to engage and entertain the users of Facebook.

Once a user becomes a fan of a business's Facebook Page, the fan can be kept in constant contact with the business through Facebook. If a business launches a new product or service, it can send a message through its Facebook Page to all its fans on the site. Companies can present special offers or promotions as frequently as they wish.

Whenever fans interact with the page, their actions are automatically generated into social stories that are published to the news feeds. Next to the story in the news feed is a link to the business's Facebook Page. Again, your business has been promoted virally with a personal referral from a friend.

Facebook has moved from a way for college kids to share pictures and stories into what will probably become one of the most powerful advertising platforms available. And you can be among the first companies in your industry to leverage this powerful new advertising platform.


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Jon Davis is an Internet marketing analyst with Capture Commerce (www.capturecommerce.com).

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