Wednesday, November 30, 2011

How close is close enough? Is it magical?

Facebook just reached privacy settlement with FTC (, and the settlement also requires that Facebook obtain periodic reviews of its privacy practices by an independent auditor for the next 20 years.
One of the biggest reasons that Facebook being so eyeball catching is that it successfully helps marketers define online segments clearly. We used to have a difficult time determining who the people exactly are behind those IDs, but now we can have a clear grasp idea about the target we would like to address to, what are their favorite foods, where they shop, and what kind of music they are listening to. The power of WOM would no longer be limited to regions; instead, it would reach out to the whole world and affect the behaviors globally. In addition, WOM has become so powerful because those comments are either from the people who have no direct benefit from doing so or from the friend you rely on most. Thanks to Facebook, we would be able to leverage the power of community to another level; thanks to Facebook, the information on the side can tell me the information of my favorite band; thanks to Facebook, we can find out whether our boyfriends/girlfriends are cheating on us.
Wait, cheating? Why would I want others, especially marketers, to know my relationship status? Why do I want them to know how many kids do I have or where do they go to school? Do I want them to know that I’m keeping a dog or a cat, or what do I have for breakfast?
Indeed, the overall trend of online community is growing and growing. They like to share life and whatever happens around them in every second. There is, however, another group of people that who tend to reveal less and less information online so they don’t have to worry about receiving those intrusive yet very relevant advertisements on the side of their page. In fact, they might not even bother looking at it. One of my friend did tell me that she felt creepy to see the wedding planner advertisement when she changed her relationship status, and she stopped to provide any personal information online ever since.
There are also other indicators suggesting that Facebook should reconsider how it approach to other advertisers and to its users. According to the campaign performance over 2009 and 2010, the average click-through rate (CTR) for Facebook ads in 2009 was 0.063% and 0.051% in 2010 — half as much as industry standard of .1%. The cost per click (CPC) was also $0.27 and $0.49 for those periods, respectively. This suggests that either the power of social community isn’t that dominating, or Facebook hasn’t found a right way to wave its magic wand to address it to both the advertisers or to the users.
What Facebook would need is to give full respect to its users and not to abuse its power of users information to advertisers, and figure out a better way to express the ads to increase its CTR in a way that its users won’t feel “creepy”. It can’t just run through database and feed those advertisers the segments with digital criteria. After all, it is people they are dealing with, not numbers.  

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