Remember when you only saw Google content after a web search? You know, before they basically took over the internet. Google introduced or rather made popular the concept of adwords but it seems facebook might be throwing their hat.
Adwords Crash Course
Google is really good at indexing websites and labeling them with certain keywords. Let's say you have a blog about Ronaldihno. Google might tag your website with keywords such as "soccer", "sports", "ronaldinho" and so forth. How they do it doesn't matter, the fact is that they can do it. Then they thought, "hmmm since we know what the page is about, we could show the best ad on it." By "best ad" I mean an advertisement that has a high chance of getting clicked on. For example, ads selling a poster of Ronaldihno would probably do better on your blog then the limited edition Jane Austin novel. That's ad words is in a nutshell. People purchase ad words and Google shows them on various pages across the internet.
The key here is page content. It has little or nothing to do with the actual user. What if you were on the blog and happened to be looking for new soccer cleats? The best ad would probably be for cleats. What if the ad module knew that you were a huge fan with the popular soccer game Fifa by EA? Here is where social adwords becomes really interesting. Facebook has data and collects data all the time. If they launch a social adwords service it could be amazing. They could show an ad based on the content of the site but also by the user. As of right now facebook has 50 million users and counting and I doubt anyone thinks it is going to slow down anytime soon. They'll dominate Tom's social site soon enough. Probably by the time he is 30. Or is it 40? I forget how old he is saying he is this week.
Don't think they can do it?
The newsfeed module can be seen as the building blocks for the ad module. It basically shows you content of what you should be interested in. Facebook could use these same algorithms and just run with them to display ads. Read this great article for more about new feeds.
There are two important things to realize. First, facebook is thinking far far ahead then anyone gives them credit for. Second, data is great but organized data is the key.
I'm sure you are wondering how much facebook could know about you? The first seven are from the great article I mentioned above.
- Whose profile pages you visit - and how frequently, how recently, and how often
- Who you message, and who messages you
- Whose walls you write on, and who writes on yours
- Who/what you search for
- Who you invite to events and groups, who accepts, and who invites you
- Who you tag in photos, and who tags you
- Which News Feed items you've clicked on before.
- What you are trying to get rid of or looking to buy (Marketplace).
- What types of links you are sharing.
- What type of videos you watch and how often.
- What groups you are in and what discussions you take part in.
- What type of people do you befriend and how often do you make new friends.
- What you are blogging about (Notes).
- Which events have you attended and plan to attend.
- Possibly know where you tavel to often based on your picture locations and names. For example, if you are tagged in a lot albums with "Las Vegas" then it's safe to assume you travel to Vegas a lot.
- What locations you usually use the internet from and what times are you most active.
- More data can be pulled from the Polling application.
- Which applications you use the most (they are categorized).
- Affiliations (Networks)
- Current Location
- Education History
- Desired Relationship or status
- Poltical Status
- Television Shows
- Work History
Privacy as we used to know it disappeared a long time ago. Probably some time after credit cards and a little before Google Earth. I don't think facebook is doing anything wrong from a business standpoint. They aren't selling the data they collect rather using it build another technology. It is a bit scary when I imagine the ads could but I would rather see relevant ads on sites I visit rather then have my email address sold to the highest bidder.
If you want to read more about the facebook ad-words rumors, check out facebook launching the google adwords killer.