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  1. Social Discovery
  2. How Facebook Will Incorporate New Types of Social Advertising
  3. Contextual Discovery
  4. Capitalizing on Contextual Discovery
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How Facebook Will Incorporate New Types of Social Advertising

Allow me to describe the landscape that marketers will soon be playing on. I expect the following five features to be incorporated into Facebook soon.

  • Richer tagging
  • New, purchase-related “stories” in the News Feed
  • Better information on friends and their activities
  • More personalized deals
  • Birthday gift suggestions

Richer Tagging

The capability to tag businesses, brands, and public figures in photos is vital to Facebook’s evolving social advertising vision, because it allows Facebook to see which brands people interact with most. After it has data on the brands people tag most, Facebook can ask those brands for advertising money whenever they appear in photos. It won’t be long before all types of products, places, and even services are taggable. In the future, as people browse through each other’s pictures (which is currently the most popular action on Facebook), they will be able to buy the products, services, or experiences they see.

Let’s look at three examples of the ways these new tags will be used.

Example #1: A Product

Figure 3.2 shows a mock-up in which the sneakers worn by my fiancée and me are tagged and can be purchased on Facebook.

Figure 3.2

Figure 3.2 This vacation photo could end up selling shoes on Facebook.

Example #2: A Service

The mock-up in Figure 3.3 shows a horseback riding tour company that is tagged, and anyone who sees my picture has the opportunity to book the same trip from the company I used.

Figure 3.3

Figure 3.3 Want to book the same trip I went on? Click the photo and you can.

Example #3: A Place or Experience

The mock-up in Figure 3.4 shows me at a rock concert. The concert venue is tagged, as is the artist, and both businesses are advertised.

Figure 3.4

Figure 3.4 Want to see this artist when he tours near you, or see another show at the same venue? Click the photo.

This innovation in ads will be the best social advertising product on the market because it targets the excitement of interacting with a friend’s picture, and happens to do so on the most popular photo-sharing site on Earth. However, affinity will be a crucial factor here; if I am a tastemaker to some of my friends, they are far more likely to want to purchase something I have purchased than if I am not influential to them. If Facebook can nail the affinity factor, it will give Google’s ad product, Adwords, a run for its money. Not only would succeeding in social discovery be profitable, it would open up a whole new chapter in advertising. It would prove that you can generate interest in products when people aren’t looking for them and aren’t physically in front of them. After all, everyone knows you can persuade a person who is walking through Walmart to buy a set of knives if you wow them by cutting through a brick, but getting the same person to buy those knives simply by showing them a picture of friends using the knives is far quicker and more scalable.

  • “If Facebook can nail the affinity factor, it will give Google’s ad product, Adwords, a run for its money.”

New, Purchase-Related “Stories” in the News Feed

Facebook knows that if it can find a way to add value to its users’ experience by updating them about their friends’ purchases, it stands to gain a great new referral model. Currently, the News Feed tells you what your friends like once in a while—such as, “Janice Cho likes Gilmore Girls.” But if it also told you what your friends purchased, the concept would be taken a step further. Anyone can like something, but would they buy it? It is possible this extra psychological nudge would trigger more ad clicks and dollars spent.

I think people would be very interested in what their friends spend money on. I can picture seeing stories like “Anna bought a Toyota Prius” and “Randy went to The Boom Boom Room” popping up, and I would enjoy reading about it as a kind of vicarious peek into people’s lives. If the success of Foursquare and Facebook Places is any indicator, people love getting gossip about real-life things their friends have done.

One of the more interesting startups that is already allowing us to examine our friends’ purchases is Blippy.com. Blippy integrates with your credit card company and announces every purchase you make to your social circle. The purpose is to allow friends to see what you buy so they can potentially buy the same things, and to generate conversation among people who have purchased the same items. Ashvin Kumar, Blippy’s CEO, told me that he knows Blippy will take some time to go mainstream, because it asks users to change their online behavior. “In the same way that Amazon changed the way people shop, Facebook changed the way people socialize, and Groupon changed the way people get local deals, Blippy will change the way people interact with their personal finances by making it into a social experience.” I think that Blippy is interesting because, as a company backed by some of the biggest venture capitalists in Silicon Valley, it represents a deep belief in the power of your social circle to influence purchases. It, along with a number of other startups whose names you don’t know yet, forms the foundation of a future where the packaging of data about other people’s lives makes you a more informed—and active—consumer than ever before.

Better Information on Friends and their Activities

At the 2011 F8 Developers Conference, Mark Zuckerberg made a few key annnouncements. Except for some design changes, all of the announcements amounted to Facebook’s attempt to capture more data in order to richen their offering to advertisers. The new profile contained a timeline feature, which encouraged users to input information about themselves from the past, dating back to when they were born. And the new social buttons, called “gestures,” essentially meant that the Like button was to become the antecedent of a long line of verbs you can use to tell your friends about what you’re doing. Giving users the ability to express actions beyond simple approval (for isn’t that what “like” basically means?) allows advertisers to understand users’ views on their products much better. For instance, it is more powerful for a movie studio to know that 230,000 people watched a movie rather than just liked it. And it is more powerful for a political campaign to know that 150,000 people cheered their cause rather than just liked it.

More Personalized Deals

Facebook knows precisely how important deals are (as does Google, who tried to purchase Groupon but got rebuffed). Think of the success that Groupon, Living Social, and all the clones out there have had by offering deals that aren’t overly personalized; if only they knew as much about you as Facebook does! Truly, Facebook has the capability to customize offers and deals to you like no other. And it will capitalize on that as soon as a critical mass of advertisers begin participating in deal-related advertising.

Birthday Gift Suggestions

How difficult would it be for Facebook to offer a list of suggested gifts for someone a week before his or her birthday? And how welcome and useful? Finding the right gift for a friend is an age-old problem that is ripe to be solved by a website that knows what you like. More social data will be needed before Facebook can truly do justice to this idea—but Facebook will have it soon.

Facebook can grow its data set only through your participation, so expect to see more encouragement to “gesture” (“like” and all the other verbs), comment, answer questions, and generally interact with friends online. As the number of connections between people, places, and products becomes greater—and the social graph becomes richer as a result—Facebook will tie up that huge net and fill it with money. If you are a tastemaker to your friends, you will probably be pestered more than most to tag your pictures, participate in deals, announce your plans and purchases, and generally function more like a commercial user. In fact, I wouldn’t be surprised if there was some internal debate within Facebook about whether to share money with tastemakers. Although it is a risky proposition to turn friends into salesmen, it could make sense for some people, especially public figures. If Facebook can get friends interested in selling products to their friends—actively or passively—it will have created the ultimate referral machine.

  • “If Facebook can get friends interested in selling products to their friends—actively or passively—it will have created the ultimate referral machine.”

Thus is the path to world domination for Facebook—and a far more personalized experience for you. The trick will be maintaining an environment that feels increasingly more social and interesting without letting monetization become too obvious. If people feel like a wallet, they will abandon ship. But if Facebook can add value to users’ lives through social discovery while making money, it will have struck the perfect balance.

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