The New Facebook Ad Platform: What Does This Mean?

Yesterday, Facebook officially announced their new ad system and it’s significant. One thing that went missing is the supposed external ads that many of us were waiting for. While we can target within the site, there is currently no way to target outside users. So much for a direct attack on Google. That’s not to say that it won’t ever occur but it doesn’t look like it’s happening anytime soon. While we’ll have to wait on the Google ad killer, what is the significance of the latest announcement by Facebook for users, developers and brands?

Users are going to continue to use Facebook the way they always did. The only additional feature is going to be the ability to add brands as friends. While I am all about saving the planet, I’m not quite sure that a Toyota Prius or a Saturn are going to end up in my friend list. Honestly, this seems a little bit ridiculous but apparently this model has been successful in targeting the younger crowd. I would be interested to see what the demographic breakdown of users in sponsored groups has been over the past year. Don’t count on that information showing up on this blog anytime soon!

If you were ever a MySpace user, you will quickly realize that this is something that MySpace already offered. MySpace is famous for their company pages users can add as friends to help express their affiliations. If you studied marketing for even one semester, chances are that you will know that brand personification is the apex of marketing strategy. Adding a brand as a friend effectively translates this maxim into reality on Facebook. Are you going to be adding brands as friends now?

Developers actually get some new options here. According to Facebook, brands can now opt to add applications to their brand “Pages.” Facebook hasn’t publicly addressed whether advertising partners can select from a directory of Facebook developed applications (unavailable to the public) or if they have to select from the publicly available application directory. I have a feeling that this is where Facebook will compete to provide custom applications to brands.

Conversely, if your application does make it to one of these sponsored pages, your application will receive a higher priority within news feeds of friends of the user who is interacting with your application (did I make that confusing enough for you?). Additionally, developers will now be able to pay for more effective ads. Rather than simply paying for flyers (which a number of application owners are already doing), ads will also be accompanied by a small list that informs the user of which of their friends have installed the application.

So what do brands get out of this? A lot. Up until now, Facebook brands were able to purchase sponsored groups that members became affiliated with. Instead of that, brands will now be able to purchase custom profiles which consist of ultimately the same features that traditional user profiles have without all of the personal information. Instead of information a brand can display:

  • Company website
  • Company location
  • Hours of operation
  • Band Members
  • Record Label
  • Season Schedule
  • and more

When I first read about this, I didn’t realize how significant this is but imagine if your favorite bar down the street creates a page. You can view their page that has all the regulars and there is conversation that takes place on that page. This is the concept of hyper-targeting. Local businesses will be able to interact directly with local customers via the social graph. I can now see college students running aroung to businesses trying to make a buck off of this new platform by offering consulting to local businesses.

So is this significant? Yes. It is going to take time though for businesses and consumers to realize the actual impact of this system. When you are interacting with the brands that you interact daily with (don’t think Nike, think the local restaurant down the street) these ads could easily become more significant. Look for some exciting things to come. It will be interesting to see what the true impact of this new system is.