Facebook Riding the Crest of Real-Time Advertising
Facebook Riding the Crest of Real-Time Advertising
Facebook has stepped up the game in the advertising stakes as this month it the web giant unveiled its behavioural targeting and real-time marketing, offering up the opportunity for marketers to target swells of sentiment in much the same was as Twitter does. For the first time as far as we know Facebook have begun tests using complex algorithms to target ads. The tests are currently only being conducted on 1% of users, however, this represents a focus group of 6 million people.
This is a step-up from Facebooks most recent effort of sponsored stories whereby users' brand interactions would be re-posted as an ad on the side bar. The issue here lied in the fact that targeting was reliant on users engaging with brands on the platform. Previous to this Facebook had been monitoring user and brand interaction in order to target relevant ads at users. Mining offers the next logical step by tuning into users real-time conversations in order to offer users what they want as soon as they know they want it. For example, you may update your status with "Mmm, I could go for some pizza tonight" and could instantly receive an ad or voucher from Domino's or Pizza Hut.
Currently Facebook collects and collates data on users activities, posts and interactions in order to add them into target audiences based on the data collected over time. Keywords are a small part of that equation, but Facebook says that sometimes keywords aren't even used. The company states that delivering ads based on user conversations is a complex algorithim that must be continuously updated and changed over time. Currently though, the tests are concentrating on the sites ability to target ads at split-second speed, as soon as the user makes a statement that is a match for an ad in the system.
With real-time delivery the mere mention of going out for dinner, fancying a beer, going for a run or even just watching a film is transformed into an opportunity to serve immediate ads, expanding the target audience exponentially beyond using usual targeting methods such as likes. Facebook did not need to create any new ads for this test, and no particular advertiser has been tapped to participate as a user may not have to have liked any football pages, or indicated that football is even of interest on their profile page, however, the mention of a trip to the pub to watch the latest international makes them an instant part of the Adidas target demographic. The moment between a potential customer expressing a desire and deciding on how to fulfil that desire is a key moment for advertisers, and therefore the real-time ad model puts advertisers in front of a user at that very delicate, decisive moment.
"The long-held promise of local is to deliver timely, relevant and measurable ads which drive actions such as commerce, so if Facebook is moving in this direction, it's brilliant," said Reggie Bradford, CEO of Facebook software and marketing company Vitrue. "This is a massive market shift everyone is pivoting toward, led by services such as Groupon. Facebook has the power of the graph of me and my friends placing them in the position to dominate this medium." Users often express the sentiment that they "don't even notice the ads," so engrossed are they in their Facebook activities. Those that do notice the ads complain they are not relevant to their interests. "All the ads I get are military-related, for building muscle or for big busty Asians in Florida who want men over 45," said Facebook user and Florida-based marketing student Mike Hanby, adding that he was not a target for any of those topics. "I hope that doesn't say anything bad about me."
This new feature does not alter the basic algorithm of expression of interest' resulting in relevant ads being promoted, the difference being that such ads are delivered in real-time so as to affect the users decision making process when they are most vulnerable to persuasion, whether it be through clever adverts, advice or discounts. The point of the algorithm is not to detect key words but in-fact to detect whether or not there is any commercial intent behind statements. "You might have the potential of seeing some unfortunate ads if not targeted correctly," said eMarketer social-media analyst Debra Aho Williamson. "If I'm talking generally about Starbucks my latte was cold' would it be weird to then see an ad from Costa?"
With Facebook ads performance generally being pretty poor (there are obviously some exceptions to this) with a reported click through rate of 0.051% in 2010 (about half the industry average) this could provide a real break-through for big brands looking to engage with fans via social media channels. It could also see Facebook's value rise even further as it becomes THE market leader in the advertising stakes. Facebook have stated that the test will continue indefinitely, but have declined to comment on the test results so far.
With such exciting occurrences it can be daunting trying to keep up to date with all the most recent happenings in the world of the web so why not get involved in local communities such as social media London in order to get connected with the brightest minds in the business.
For now however, we must wait with baited breath to find out the true potential of Facebook's latest venture.
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