Facebook Pursues More Advertising Opportunities

So we’ve seen many advertisers disappointed by Facebook’s ability to deliver their target audience.  Large advertisers such as General Motors pulled their advertising dollars after poor results.  Of course, this all resulted in one of the worst IPO’s ever.

But Facebook isn’t giving up.  It held a conference with representatives from large advertising agencies to find out just what it could do to bring in the advertising dollars.  Of course, agencies are looking for good demographic targeting, and Facebook will have a hard time delivering.  After all, none of us signed up for Facebook assuming our personal information would be hand-delivered to advertisers.

Now Facebook has announced its launch of Home, an app that allows consumers to have a constantly changing rotation of content from their Facebook friends.  But over time what will be rolling into this rotation?  Ads.  Now, as an advertiser, I’m only too happy to see more places to help clients reach their target audiences.  But as a Facebook user, do I want to see ads in the middle of my social time?

Therein lies the problem for Facebook.  If you’re at a cocktail party with friends, do you want a carpet salesman interrupting your conversation to make a sales pitch?  Of course not.  But that’s what advertising on Facebook attempts to do.

I think Facebook’s problems will continue.  After all, Facebook did not begin with a business plan.  It was not started to generate revenue.  It began in a college as a way for kids to connect.  It was only after it developed a huge following that Zuckerberg and investors began looking at its potential as a revenue stream.  But it will always have one problem at its core. The user experience is about connecting and sharing information with friends – not advertisers.  If Facebook gives advertisers what they want, they lose trust from their users and downgrade the user experience.  It will be interesting to see how users respond to the latest attempt to interject ads into their social world.