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Facebook set to introduce major ad play

By Abbey Klaassen
Advertising Age
October 23, 2007

NEW YORK ( -- The invitation, sent to advertisers and agencies in New York, arrived carved onto a Lucite brick:

"You are invited to a discussion with Mark Zuckerberg and the Facebook executive team as we unveil a new way of advertising online."

Facebook is keeping mum about exactly what it is unveiling at the Nov. 6 event, but ad-industry executives familiar with the company's plans said the social network is looking to better use the data its users voluntarily offer up on their profiles. Of course, that much seems like a no-brainer (although it's actually not easy to implement). But less obviously, a couple of industry executives familiar with the company's plans suggest Facebook could use some of what it knows about people -- and their relationships with others on the site, what is known as the "social graph" -- to target them off Facebook as well.

Twist on traditional technology
Such a system would be a twist on the traditional behavioral-targeting technology that is already on the market. A Facebook representative wouldn't comment on any specific ad plans.

While the company sounds unlikely to bore down into a detailed discussion on Nov. 6 as to how it plans to target advertising to users even when they're not on Facebook, people familiar with Facebook said it has detailed such a play as part of its long-term plans.

A recent trademark filing could lend a clue. On Sept. 24, Facebook trademarked the term SocialAds, described as "advertising and information distribution services, namely, providing advertising space via the global computer network [and] promoting the goods and services of others over the internet." According to the filing, the trademark concept's first use in commerce was Sept. 20.

Facebook does indeed need to come up with a killer monetization platform and likely needs it to reach beyond its domain to justify the valuation of the company. Current funding negotiations value the company at up to $15 billion.

Upgrade to earlier system
Facebook has already tried to improve its targeting capabilities for ads on its own domain. On Sept. 13 it introduced an upgrade to its Flyers system, which allowed advertisers to pay based on a cost-per-click model vs. just a cost-per-thousand-viewers model and to target users based on profile details such as political affiliation, work network and keyword.

One person described Facebook's advertising moves as creating an alternative revenue stream to that of Google, although it should be noted Google offers a markedly different targeting service. With two-thirds of the search market in its grasp, Google has vast amounts of data about people's intent -- what they are actively searching for online. It also segments pages based on the context of those pages. Those two tools are a powerful combination.

Facebook, on the other hand, has an enormous database of people's demographics, relationships, likes and dislikes -- all offered up voluntarily based on what people choose to write on their profiles. Ideally, it knows more about its users than many other internet sites, although some aren't convinced that the data allows Facebook to determine intent.

Privacy policy
Facebook's privacy policy addresses its ability to use data to serve ads, but notes it does this without identifying people as individuals to third parties: "You can know more about the world around you and, where there are advertisements, they're more likely to be interesting to you," it reads. "For example, if you put a favorite movie in your profile, we might serve you an advertisement highlighting a screening of a similar one in your town. But we don't tell the movie company who you are."

And, of course, all of Facebook's ad-targeting plans presume people are honest and real about the information they offer up about themselves on the site.




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