Tuesday, October 20, 2009

How Facebook Will Become the Top Ad Network

Facebook Connect is growing like a wildflower through websites, dramatically increasing registrations and logins now that users do not need to remember an account and password, and also driving traffic when users publish website activity to their Facebook newsfeeds and draw clicks from their friends.

Now when a user goes to a Facebook Connect enabled website, the website contacts Facebook to get their Profile photo and name.

Since Facebook knows a lot about people from their Facebook profiles, it lets advertisers place super targeted "Social Ads" on Facebook.com. These ads are already drawing over $500M in revenue for Facebook.

The next logical step is for Facebook to let Facebook Connect enabled websites show these same targeted ads and share revenue with the websites. So when users log onto Facebook Connect websites, they see the same highly targeted ads that Facebook shows them when they browse Facebook. And users are more likely to click on these ads on websites that they are browsing than on Facebook where they are engaging in a social experience.

Transitioning ads from one high volume website into a network of websites is the same thing that Google did. First Google offered AdWords that showed ads based on what a user was searching for at Google.com, and then it offered AdSense that let websites show the same ads based on what was on the page a user was looking at. Google then augmented its website ad network by purchasing DoubleClick's display ad network.

Facebook's ads are much more targeted than Google's ads. A Google ad at ESPN.com can assume that the user is a male aged 20-35 and then randomly show a Toyato truck ad or a movie ad for the new Farrelly brother movie. A Facebook Connect ad would know that the user (or a lot of the user's friends) are a fan of Something About Mary, that the user had checked out Facebook Connect enabled Movies.com earlier in the week, and show the Farrelly movie ad. If the user is not logged into Facebook Connect, Facebook will at least know which types of ads are doing better for different demogaphics.

Facebook surprised everyone with its rapid revenue growth to $500 million in Social Ads... its evolution into a Social Ad Network will accelerate revenue into Google territory.

1 comment:

Alice said...

With the effort they gave to improve facebook all these time, I think they deserve the raise....and I think they will earning more with this facebook blog, so it's like facebook has it all. No need to for another site to do this or that.

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