Sunday, February 26, 2012

Facebook Ads and monetizing engagement

After the Facebook IPO filing, I got to thinking a lot more about what significant things Facebook would do beyond what we currently see on the website. Instead of thinking, as I normally would, about what functionality they would add, I figured I'd focus on how to better monetize what they have.

In my mind, what Facebook has is engagement. Whether it's "social" or not, they've got people scrolling, clicking, and moving their eyeballs all over their website. I didn't really see how they've actually made huge money except through deals with companies like Zynga. But what I had forgotten is that I had been blocking ads on Facebook for the longest time using AdBlocker.

So I turned off Adblocker and started seeing ads in the usual spots along the right-hand side. The odd thing is that the ads didn't really seem all that relevant for me in the here and now. I kept seeing ads for  products and services that professional photographers would use. This isn't surprising since I had a photography business for years and still run a photography site. But for the last 6-9 months, I've hardly said anything about photography.

So it didn't quite make sense. If Facebook was poised to make so much money off ads, how could they be presenting me with ads that haven't been all that relevant to me for the last year?

Then I started seeing ads for things related to internet technology and jobs. No surprise since I've been in the technology world in Silicon Valley for 12 years. Then I started seeing ad polls relate to the Lakers. Not surprising since I'm very active in a Laker Fans group on Facebook. This was getting better, especially as compared to the ads to buy Photoshop actions.

But then I kept seeing the same ads. Over and over.

What was going on?

The quick question I got after choosing to hide an ad
I finally decided to hide the ads using Facebook's function (to hide a specific ad or all ads from that advertiser). Then I started seeing where Facebook was taking things. Upon asking to hide the ad, I'd get a quick question about why I wanted to hide it. Then I was asked to help find more relevant content by telling Facebook what I liked.

Facebook as a site was basically engaging me with a few simple questions. And I didn't really have a problem answering them. The questions didn't confront me as pop-overs or cover up other content that I actually cared about. So I answered them and moved on.

The response after answering the above question
Very quickly I started seeing ads more relevant to my current interests. Like within an hour. Damn, they were already leveraging the simple questions I answered to provide me more relevant ads. That actually encouraged me to take a look at the ads (and hide them if I didn't like them along with giving them more knowledge about what's relevant to me). There are still a mix of photography & technology, but it's way more relevant and changing more often than it was just 2 weeks ago. Compare this with the weird ads I got years ago like a head-shaving razor (yeah, to shave my head), hunting camouflage, and pregnancy stretch-mark cream. Right now, I see an add for a business-technology conference, the Lakers, and Customer conversion through social engagement. Sounds on-point to me!

Of course, along this way, Facebook is learning more and more about me and is looking to make money off me. But the simple way in which they are getting me to look, click, and engage intrigues me. Amazon does a very good job with finding relevant content to show me on their home page (based on my previous buying and product research habits). Facebook is not nearly as good at providing me spot-on content, but I can already see it getting better. Given the amount of data they have on my habits & likes and my friends' habits, I expect the ad content to get more and more relevant.

So I'm leaving AdBlocker off and plan to look at the ads I'm presented every time I login. I probably won't click on them, but it's something I'm keeping a very close eye on this evolution. It's amazing to think it's still in its early stages, but given the speed at which I've seen improvement in relevancy, I can only see that Facebook will be making a lot more money (and very soon) off of the level of engagement its users have with each other and with the site itself.

BTW, as I finish off this post, I checked Facebook one more time and here's the ad I got. Relevant? Well, I love cooking and I'm it MUST mean I need a tandoor in my life and kitchen! Right!? Let's just say it's not a perfectly relevant ad, but I see where it's coming from :)

I'd love to hear your experiences with ads on social sites...leave your comments here!

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