P&G Ad Man: "I Don't Want To Buy Any More Banners On Facebook."
Too bad then, that Procter & Gamble's GM for interactive marketing and innovation, Ted McConnell," just told a conference: "I really don't want to buy any more banner ads on Facebook."
"I have a reaction to [Facebook] as a consumer advocate and an advertiser: What in heaven's name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?"
McConnell says branded Facebook applications could work, but that mostly, he rejects the idea that Facebook is social "media":
Who said this is media? Media is something you can buy and sell. Media contains inventory. Media contains blank spaces. Consumers weren't trying to generate media. They were trying to talk to somebody. So it just seems a bit arrogant. ... We hijack their own conversations, their own thoughts and feelings, and try to monetize it.
Facebook won't be able to win over ad buyers like McConnell with its new "engagement ads." Advertisers want to be seen as providing new functionality on the social network; they don't want to pay extra for users to comment on their banners.
Here's what Facebook should do instead. First, extend Facebook Connect to online retail stores. Second, analyze users' spending behavior and activity on Facebook, make that data anonymous and sell it to marketers. Third, turn on personal ads and charge more than the New York Times does -- about $48/week.
See Also:
Facebook Not Interested In Lucrative Personal Ads
Here's A Billion-Dollar Business For Facebook
There's a place for advertising on Facebook -- probably not enough to cover Facebook's margins, though.
Social networks have this paradoxical problem with user growth directly correlating to overhead growth. Yikes.
Old article, but see here:
http://www.cioinsight.com/c/a/Past-News/Inside-MySpacecom/
Sell tickets to events. Charge for full-featured party planning and event management tools. These are lucrative areas. People spend a lot of money on food, drinking, and partying. But you don't sell deodorant and vacation packages in the middle of a disco.
Personal ads could work, but not if Facebook keeps trying to tie anything to my profile. The hot chicks I'm trying to convince I'm cool really shouldn't know I'm selling my old Honda Civic or looking for a date on Saturday night.
"What in heaven's name made you think you could monetize the real estate in which somebody is breaking up with their girlfriend?"
Well maybe that is not a good place to advertise YOUR product in this situation but it may be excellent for some products. Maybe they are down and want to get away with a trip to Vegas, or see a psychologist, or even view a dating site to find a new girlfriend. The social networking space will provide this kind of targeting, not now but it will and there will be companies that can and will use this pin point targeting to reach their audience and sell more products and services than their competitors.
"Who said this is media? Media is something you can buy and sell. Media contains inventory. Media contains blank spaces. Consumers weren't trying to generate media. They were trying to talk to somebody. So it just seems a bit arrogant. ... We hijack their own conversations, their own thoughts and feelings, and try to monetize it."
This statement is simply naive to be honest. This logic can be used against anywhere there are ads. "Hey I was trying to watch a TV show here and you force me to watch ads". The logic can be used anywhere. Radio, movies, websites, outdoor, in-video game, and every other place (on or offline) that there are ads placed. Who decided to MAKE blank spaces in TV programming? By watching TV, viewers didn't "create" blank space to put ads. The networks did to make money from the audience. The TV and cable networks are not going to run their businesses for free. Same goes for social networking, the users didn't create the "blank space" to put ads...someone has to pay for the huge infrastructure needed to run the social networks. The point is, there is space, there is inventory and it can be bought and sold. It is happening today.
Social media and online advertising is here to stay. Precise targeting is partially here and will be the way of the future. Advertisers will migrate to where the eyes of consumers are and more and more that focus is going to be online. It surely won't be newspapers, we know where readership numbers of this "media" has been headed for several years now.
Lastly, everyone's appetite for advertising greatly varies. Some don't want their physical world cluttered with ads, some hate TV ads, radio, online etc. Others don't mind ads and yet another group will appreciate ads that are relevant and of interest to them.
Chad
http://adchap.com
the personals business mean competing head on with craigslist
face-book = dead-pool
too big to fail you say?
you mean like... excite@home?
Advertising always appears next to something. If you want to reach the eyeballs — and on a place where they are actually reading stuff in detail (IE about their friends), it seems like a decent place to be. Just like any other high-traffic site with a nice core of users, whether it's MySpace, the NYTimes, etc.
No offense but when you call the GM of interactive marketing for P&G "naive" it probably says more about you than it does about him.
I'm pretty sure that anyone that has worked at P&G for more than a day doesn't need a refresher course on the history of television advertising. P&G practically invented television advertising.
Nobody has ever denied that "online marketing is here to stay." Of course, online marketing is here to stay. This article is specifically talking about Facebook and whether private messages between two parties can be monetized. And not just monetized in pennies but monetized in millions of dollars.
Johnny
Sorry to be unclear. I am sure the GM is very experienced in his field and not calling him naive. He is fully entitled to his view on the issue of course. As am I. I disagree with the statement. Also, would be interesting to hear the full conversation to make sure that it isn't out of context in some way.
That said. Monetizing of conversations AND social media is going to happen in a big way in the near future. What the most effective way to do that has not been figured out yet, by any company. Not google, News Corp., P&G, Coke or any other company. It has started and it's effectiveness will blossom.
With google, yahoo, facebook connect, myspace, openID, friendfeed and other sites and platforms open access further to as well as sharing profile information between sites (and advertisers), "online" will become social networking. Social networking will become "online". More and more we are going to be linked in to networks and relationships. More and more companies and sites will have profile (or social networking info) on their users. More and more will we start to see ultra targeted ads to consumers across sites while logged into facebook or not.
As and once this happens, more and more targeting options will come giving advertisers better access to segments of their audience. They will also get more detailed statistics on performance on campaigns and segmentation which will allow them to fine tune and improve campaigns with greater consistency. With this will come the monetization of social networks in millions and billions of dollars. Not pennies as you say.
McConnell's comments point to social networks’ Achilles heal. No, not that consumers think less of brands found on networks. Whether ads on my email account, IM client, Facebook page, iPhone app, or cereal box, I can separate the conversation I’m having from the ads around it. Social Networks’ Achilles' heal is that brand advertisers perceive the display context tainted.
To be clear, social network inventory IS underperforming - hence the falling CPMs. But, Facebook and MySpace are smart. They’re layering in revenues that leverage their social nature. That means gift referral, app placement, digital product, bulk buying, and premium service revenues. It also means less reliance on display advertising.
While it’s one thing to hope that future apps will yield fertile ad ground, the question for CPG sellers is: As consumers shift to these networks, what are they doing to influence the ad outcomes? Is swearing off a pub’s inventory good enough? VC’s, with arguably worse odds of a payday, backed iPhone’s iFund and Facebook’s fbFund to spur app innovation. Where's the P&Gfund? It's time to start making lemonade.
Facebook happened to be at the right place at the right time (MySpace bought out) in terms of the VC hounds at the Valley trying to find/hype the next big thing which surprisingly enough no one wants to point out. The biggest loser in this Facebook saga will be its investors (hello MS) who are hoping that this is the next Google (please!). The biggest winner: Mark Zuckerberg who wisely is selling his stock. Btw, remind me to wake up when Mark finally decides to lay out a business plan showing how a company valued at $4 billion actually starts turning a profit. Then maybe I will change my mind on bathroom advertising too.
I also think Mr McConnell is generalising social media. I believe social media advertising is split into 2 parts. Passive advertising – when an ad is shown to a user alongside their social profile, and engaged advertising, when the user is interacting with a brand. For passive advertising - I can break up with my girlfriend by Facebook email or Gmail. One it would seem is immoral while the other is ok because of the platform used. In the case of engaged advertising, I believe as long as the user knows they’re interacting with the brand and the brand does not try and manipulate the conversation it’s having with the end user, then this is an entirely pure way of talking to a user and therefore a great form of advertising.
Either way, in our case it’s great news and I’d love to have a chat with Mr McConnell: “McConnell told the conference that he does not think P&G should continue to buy banner ads on Facebook, although he believes there is still value in branded Facebook applications.”
Adknowledge are a social media ad platform. In September we served 10 billion ads into social media applications across Facebook, MySpace, Hi5, Bebo, Friendster and Orkut. Along with monetising apps we also offer brands the opportunity to "rent an app"
Here's an example: http://apps.new.facebook.com/videotheater/Video.php?contentId=4 for more information pbowen@adknowledge.com
ok, i had a whole typed up answer that just got lost when I hit submit, so in short:
Facebook needs to start thinking hard about advertising and applications that are commercial and flow within the context of data. I dont think facebook should start a personals service, but I would think advertisers would rather advertise to someone they KNOW is single than throwing up a banner or even a CPC ad on google.
Any time someone mentions a sports team, ads should appear from ticketmaster. Airlines could create real time apps to show you how much it will cost to see anyone on your friend list mid conversation (hover over their name in your friend feed and you will see flight costs etc)...creative things like this that will MAKE money for advertiser, not just build their brand.
I dont have access to Facebook data, but they should be segmenting conversation types, picking the 20 most commercially focused and finding ways to help advertisers build advertising with commerical components around this data.
This is the future....
Facebook has a HUGE audience with high engagement levels so it doesn't take a rocket scientist to see that some combination of mastered content deals, better ad units and greater transparency will be the cat's meow, something that I blogged about in:
Why Social Nets Struggle to get Advertisers to Show Me the Money
http://thenetworkgarden.com/weblog/2008/06/why-social-nets.html
Check it out if interested.
Mark
What I have to do ?