MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of the “Fan-Sumer” matter to brands
By Jeremiah Owyang, insight from Charlene Li and Shar VanBoskirk. This is also being cross-posted on the Forrester Marketing Blog.
Executive Summary
Both Facebook and MySpace have launched profile and network targeted advertising and marketing products. As they both use member interests and the communities which they are part of, trust continues to become key in adoption as information is passed along the network. The sheer size of MySpace’s member base, as well as the thriving local business membership will lead to success. Facebook, which brings a unique solution evolves advertisements to endorsements and encourages members to subscribe to a brand in what we are calling “Fan-Sumers” (an evolution of the consumer). As consumers share their affinities, brands can advertise using trusted social relationships.
Data: Highest trust comes from friends or acquaintances
(Left Graph: Consumers trust their friends and acquaintances far more than any other sources –Report: Leveraging User-Generated Content, 2007)
Trust is and will continue to be one of the most important attributes in the decision making process.
Communities form online, trust develops
How we get information continues to evolve as communities form online organized by individuals with similar interests. Just like in real life, we identify our interests, and are often influenced by opinions and experiences of trusted peers in our communities. For many, social networking sites embody these relationships and influence how trusted decisions are made.
MySpace: Brands have a home and can hyper-target ads
The already active MySpace platform is leveraging their already active member profile pages, encouraging the many small and medium businesses to setup a online storefront and providing tools to make it easy to self-serve advertisements to their customers. It’s easy to make the case that demand and inventory are present.
[Brands can now self-serve a targeted marketing and advertising campaign within the already thriving MySpace community]
Webmaster not needed: MySpace profile for businesses
Small businesses can continue to build their online profile on MySpace (many of them already have), but now, because of their familiarity with self-marketing (restaurant, nightclub, and other local businesses and their customers) on Myspace.Self-service ads remove middle man
When friction is removed, efficiency is created. With MySpace’s “Self-Service” ad network small businesese can target ads across a variety of affinities (over 300) and deploy ads on users’ profile pages. These ads, which should (by theory) be relevant and contextual to a user who has self-populated their profile page will have these ads displayed.Advertising balance required in already busy MySpace
With marketers already with a strong presence in MySpace this could continue to erode away at early adopter “cool kids” from embracing MySpace. But as cycles have shown, where communities form, marketers follow.User experience continues to be free-form
These ads, which will conform to IAB advertising standards (sizes) will give advertisers the freedom to create the ads in the style accustomed to the network. Yes, expect more blinking text.To watch: OpenSocial
As OpenSocial starts to be deployed across MySpace and other partners, expect profile ads to be tied to widgets and vice versa; a fabric of links. I’ve already outlined How to explain OpenSocial to your executives.Inaccurate user profiles could result in mis-targeting of ads
We know that many members do not make their profiles accurate which could yield inconsistencies in how and where ads are displayed. While MySpace has assured they’re accounting for rogue outliers, expect some inefficiencies in advertisements.
Our Call: Sheer mass will yield success
We think this to be a win for MySpace, given their great reach, there are millions of users with active profiles, and there’s also plenty of inventory as many small and local businesses that are present will be comfortable deploying ads where their community already exists.
Facebook: Rise of the Fan-Sumer
Going beyond just profile matching of advertisements, Facebook allows consumers to self-identify with brands and becoming fans. In turn, brands can use these “Fan-Sumers” as endorsers to their own trusted networks, resulting in trusted word-of-mouth. Brands can also self-manage their own campaigns, and there’s some unique opportunities for eCommerce widgets or applications to be part of this formula.
[Using Facebook, consumers will publicly endorse brands, resulting in the birth of the “Fan-Sumer”, causing efficient word-of-mouth marketing in their trusted network]
There are three major components to today’s announcement, they include the following:
1) Facebook Pages: Brands get their own profile
For the first time, businesses will legitimately be able to setup profile pages, much like MySpace’s business profiles feature. Next, Facebook members will add these brands as ‘fans’ (much like friends) and this will produce a connection between the parties. Members will self-identify with brands in what we are calling “Fan-Sumers”. Furthermore, this service, called “Beacon” gives third parties the ability to share information on the newsfeed and provides lots of unique opportunities. Sponsored groups will start to evolve into this new form brand profile as this system gets adopted.2) SocialAds: Endorsements at the friend level lead to eCommerce
Once a member has indicated they are a fan of a brand, that brand can choose to purchase SocialAds (from Facebook Sales or via a self-service platform). A unique endorsement of a product or brand will now appear on that individuals news feed or banner or skyscraper ads. Advertisers can purchase social ads target by profile demographics and profiles, as well as by activities done in Facebook. Payment is an auction-based system available to marketers via both CPM and CPC pricing.3) Use “Insight” for control and flexibility
This self-service dashboard called Insight gives the marketer detailed knowledge how their advertising campaign is working on Facebook. It’s expected that advertisers will have flexibility, control over the type of ads they deploy, in what quantity, and the demographics they want to target.A likely scenario:
Shauna, who enjoys Revlon products, indicates she’s a fan of the brand and becomes a Fan-Sumer. Marketers at Revlon can then purchase SocialAds, which will then display on Shauna’s newsfeed or on ads on her profile. If Shauna purchases Revlon makeup from Amazon, her newsfeed could indicate an eCommerce links recommending it to her 100 trusted friends, resulting in further sales.
[The traditional marketing funnel as we know it is distorted; endorsements are now passed from trusted customers to prospects, not direct from the brands themselves]
Implications for Facebook:
Members have more control over ads
Facebook users can opt to turn off social ads, and friends of that user can ‘dial down’ endorsements they see using preferences. We believe that Facebook is attempting to respect the rights of users by giving control to members to ‘opt-in’ to become a Fan-Sumer.Quest for Fans will cause brands to beg
Since social ads only work if a member has indicated they are a fan, brands will be working to earn and buy fans to accept them as members. Expect a lot of noise to be generated from this activity as brands run campaigns to encourage members to add them as fans through discussion boards, banner ads, and special offers.
Hard to qualify a “business”
Facebook is limiting these features to ‘real’ businesses and organizations. Expect an entire team to be crawling and dealing with this qualifying the issue. As recent member accounts have been disabled from Facebook, expect businesses and organizations to encounter same issues.Limited ad supply to raise prices
Because Facebook members will see only two social ads per day, we expect the supply of ads to be in scarce supply and thus raising prices and not matching the value. This could shift ad buying to large brands who have experience buying and managing search and direct response ads.
Our Call: Brand affinity leads to community endorsements and more trusted marketing.
We see this as a win for Facebook, this highly targeted system isn’t just about web advertising but about brand affinity and hooks into what’s really important, trusted endorsements from people in a network. This truly is the next generation of advertising. Facebook tells us that the worst case it will be 2 times click through rate over the performance of (existing is 4-26%)
Next Steps For Brands
Experiment: Because of the control and flexibility, we recommend to brands that are currently on either of these social networks to experiment and test.
Learn how to efficiently manage your campaigns. There’s clearly a trend towards self-service, which provides efficiencies for both businesses and the platforms.
To know: Marketing has changed, advertising is no longer a sole-solution. Marketers must also learn how to be part of communities, engage with them, and be part of the conversation.
To know: Marketing is now distributed, brands must embrace communities where they currently exist, rather than solely driving them to their corporate website.
[While traditional search advertisers like Google and Yahoo match by keyword, My Space and Facebook match on something far more powerful: people and their relationships]
This digest not only explains what is happening, but why it matters to you. If this was helpful, please pass it on. Love to hear your thoughts, please leave a comment, even if you don’t agree.
127 Comments so far
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Well, I guess we all saw this coming. “Fan-Sumer”? hmmm…more like “Friend-Sumer”.
The fan-sumer idea is interesting (though the word itself makes me throw up a little) but I wonder how willing people will be to indicate that they’re a fan of a brand if it just means that they’ll be subjected to more advertising, even if it is targeted.
The more beneficial scenario that I can see for the user is not so much being a brand fan, but indicating what they’re in the market for - i.e. I’m going to Italy in a month, so I want to see airline deals for trips to Europe at that time.
Certainly a unique idea, but I’m not convinced it will work as perfectly as ad agencies would like it to.
Fan-sumer? So now we are further reduced to FANatical ConSUMERS?
As usual, the underlying idea is interesting, but the execution is so user-unfriendly (the name alone reveals their true intentions) that they are just legitimizing peer-to-peer spam.
As a true social solution for advertising it is not a write-off, but the execution needs a lot of tweaking to be truly about engagement and personalization with a true sense of trust based endorsements from your friends.
never ending friending? Good model and good analysis. Expect some cynicism tho from savvy digital natives
Great post, but there’s one thing I’d be weary about when playing on Myspace. It’s totally inundated with hacked accounts, spam comments (spamments?), etc. The problem has gone on for too long without being addressed. Each week, I delete at least two spam comments. After a while, this invasion has the effect of making users feel unsafe.
Just a thought…
There is something akin to Vendor Relationship Management (Doc Searls project).
In general I think this is a good development - though I’m not sure about the limitation of only showing 2 ads per day - I would think they might want to experiment with that to reach the right balance. Some people might want to see many more (I’m actively shopping for gifts and my friends suggest a bunch of things in the right range so all those ’socialads’ are useful to me) etc.
A critical question - I think - will be how well (and if) Facebook illustrates that a given news post is paid for. Right now they do show that a sponsored group post is sponsored - I hope they do this for everything.
Another open question - can “brands” on Facebook add widgets etc to their profiles? (i.e. are they essentially real users just under a different name). This would allow the odd experience perhaps of playing a game of Scrabble with a soda company… BUT on the other hand things like that could be pretty amusing - and in some apps will be engaging to users.
As well Brands may want to tailor their site in Facebook - much as individuals do their own profiles.
I would also wonder where the lines will be drawn. i.e. what makes someone a business vs. an individual. (to take an extreme example - George Lucas is a person, Lucas Films is one of his companies.)
Which raises another question. Is Facebook assuming a one-to-one correspondence between a company and a brand? (i.e. I might drink Diet Coke Lime Flavor - you might brink Classic Coke - is that one Facebook profile or many?)
More subtly take the LucasArts example. Probably close to a million people on Facebook (at least) might be fanatical enough fans of Star Wars to want to link to and share their fandom. BUT many many fewer might be fans of JarJar Binks than of Luke Skywalker or Darth Vader.
i.e. what are you linking to and what types of businesses can create profiles? Is it GM or their specific car brnads? Within those brands is it the brand as a whole or is it each car make?
Definitely only the start of something pretty interesting.
Shannon
Interesting. Not hard to see that coming. The problem, the way I see it, once a social network becomes too cluttered with spam-like friend requests, advertorial news feed items and valueless network connections people stop using it. Value is a delicate thing. Trust is even more fragile.
MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of the “Fan-Sumer” matter to brands…
Game on! Here’s some detail and analysis of Facebook’s announcement from Forrester’s Social Computing analyst: MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of the “Fan-Sumer” matter to brands. We…
Interesting article. Fairly astute analysis.
I like how you’ve presented MySpace’s solution first though the reader is looking for the Facebook angle (at least, I was).
My gut feel is that Facebook’s solution will probably be a hit specifically because of the control it gives the user to opt-in/out.
They handled the News Feed user revolt storm in a tea cup admirably last year and are probably applying lessons learnt in implementing SocialAds.
MySpace… will probably continue playing catch up.
We’ll see.
It’s FAN-Sumer as a member has to ‘fan’ a brand’s Facebook page.
As I understand it, Members cannot ‘friend’ a brand, only ‘fan’ them.
What incentive is there for the “fan-sumer” to remain opted into this system? Using the scenario above, why would Shauna willingly allow Revlon to market to her friends through her news feed or profile page? As a Facebook user, I could see myself sharing certain brands that I’m extremely passionate about with friends through the methods I control (posting a link / video of the brand, adding the brand’s app, etc), but I’m not sure I’d want the brand to control the message.
Perhaps I’m missing something, but I don’t see how this would work advertisers other than the hottest brands around. Those companies probably don’t need to advertise to begin with. There are clear incentives for the advertiser and for Facebook, but what’s in it for the consumer?
~ Joe
[…] previous banner ads, Forrester Research analyst Jeremiah Owyang tells us. Check out his analysis here for […]
great post Jeremiah. Hopefully this will help facebook and myspace turn around their extremely low ROI. At ad:tech i’ve spoken to some big marketers who have said privately that the ROIs for both Facebook and MySpace are the lowest they’ve ever seen and in their eyes a non-starter. I hope the ‘microtargeting’ will yield ‘micro creative’ campaigns that work for users and consumers (or FanSumers)
Cheers
John
FaceBook, MySpace announce target advertising campaign…
…
Manual Trackback expanding on my points above:
http://www.particls.com/blog/2007/11/facebook-says-that-you-are-fanatical.html
[…] short, Facebook is doing what they can, but they’re not bringing anything to the table. It’s just advertising on their site and their limitations are pretty obvious. They can […]
ASre we really seeing anything new here? Anything to justify their valuation. I think not.
http://techmerkin.wordpress.com/2007/11/06/facebook-to-copy-yahoo-business-model/
[…] Mark Zuckerberg believes he is on to something, BIG: The next 100 years of advertising. Of course, the Facebook maven can think SO long-term, he is but a mere 23! […]
I saw some amazing fan-spammers when I worked at a retail/make-up company. Benefit (the makeup company) fans would take photos of their eyebrows and faces with the product and post on a community blog/metablog. It was intense, and showed us just what brand in the hands of the (empowered?) consumer does. Oh, they also stalked retail shops and took photos of new products before the doors opened.
[…] it means: First thoughts: with this announcement, we’re seeing the rise of what Jeremiah Owyang is calling the Fan-sumer. Consumers who “vote” for their favorite advertisers by […]
Thanks Anna, that’s a great example of brand ownership by fans.
Hey Jeremiah,
Interesting Post.
Anyway I can get a link to the .pdf file of the Forrester Report?
Thanks,
Matt
[…] Partners… TechC has Q&A. There is also a great analysis on this along with MySpace on Jeremiah Owyang blog. Here’s the Facebook Ads […]
Oy, Maybe I am jaded, but I don’t think this will work for Facebook as well as for MySpace. MySpace has a demographic of younger consumers who are more open to peer pressure. Facebook has moved in exactly the opposite direction, going for a more sophisticated and increasingly older audience.
As an “adult,” I can’t think of a single brand I would “friend.” Not even BMW or Cartier or Chico’s, or Garnier Fructis, all of which I either use or have used, own or have owned. And if “friending” them meant I would have to see their ads, I’d de-friend them even if I like them, because the presence of the ads — not why I go to Facebook — would deter me. I have other places to look at those ads.
Not to mention all the marketers who will pay people to friend their brands, and start groups that game the system.
I don’t like this. I DID like an ad I saw earlier this week for leggings from American Apparel. Why did I like it? 1)I wear leggings. 2) The ad was bright-colored, and actually stood out on the Facebook page (most Facebook ads don’t) 3)It went away after a while.
This will work for certain types of ads on Myspace: skate and surfboards, music, cosmetics, etc.
While I’ve been writing this post, I’ve been also trying to figure out what brands this could work for on Facebook. Maybe Apple? J.Crew? It will be a limited buy for the marketer, and many marketers, anxious to get into social media, will stub their toes on this one. As John Wanamaker said, 50% of advertising dollars are wasted. He just could never tell WHICH 50%.
Anna, if I had friends who where fan-spammers, I would immediately delete them as friends. What people are not seeing is that in that any group of friends, there are more differences in likes/preferences than similarities. That’s why this program will be a net loss for Facebook, as they scare away valuable users for the fanatical 5%.
Francine
I think it will be lifestyle brands that individuals WANT to be associated with.
One obvious brand comes to mind: Apple
Please, Jeremiah, turn back from this madness, I beg you.
Imagine that you’re a Radiohead fan. How would you feel if the music industry started referring to Radiohead fans as “Radiohead fan-sumers”?
This is very easy to understand, and was expected for quite some time.
Next will be USERS WHO GET PAID TO USE FACEBOOK.
Marketers will further integrate themselves into the Social Graph by hiring agents to find the most potentially profitable “friends” among the Facebook users, and will pay these users to help sell their products and services.
Check out my most recent post for more on this one and to continue the discussion on what’s going to happen next…
Cheers - Devin
We may see some interesting e-commerce applications begin to appear on the Facebook platform to support these branded pages.
If only facebook had their own online payment service.
Will applications be integrated into the brand pages in anyway?
@Wade. Funny stuff. But do take a look, there’s a trend happening here, and that term (although cheesy) is an accurate description.
Check out the NY Times article on gossip http://www.nytimes.com/2007/10/16/science/16tier.html?_r=2&ref=science&oref=slogin&oref=slogin relate nicely to the chart here.
[…] Mark Zuckerberg & Co. stood up in front of the advertising community in New York (TODAY?) and unveiled Facebook Ads, an ad system that allows companies to use the Facebook social graph and to develop highly targeted ads. Large brands such as Coca-Cola […]
I’m not enamoured of the “Fan-sumer” label. Since fan comes from ‘fanatic’ - that makes the consumer seem a bit rabid.
I’d suggest an alternate play on words, like maybe “Pro-sumer” (as the antithesis to con) instead.
Advocating the product rather than mindlessly following it.
@jeremiah: Maybe I don’t understand the distinction you’re making between “fans” and “fan-sumers”. What does “-sumer” add to “fan” that makes it tell us something new and useful about that person?
An Apple fan is presumably a person who both consumes Apple products and loves the brand. It’s possible that they love Apple but don’t consume any of its products (maybe they can’t afford them but would buy them if they could), but that seems highly unlikely–so unlikely that we’ve never needed a word before that combines their identity as brand-lover with their identity as person-who-spends-money-on-products. And in the context of “fanning” a brand on Facebook, whether or not they’ve actually parted with money on the brand’s behalf doesn’t matter, does it?
I CAN’T BELIEVE YOU’VE GOTTEN ME TO OBSESS OVER THIS TERM ALL DAY, JEREMIAH.
[…] wondering what this is all about and what this means to marketers, I highly recommend checking out Jeremiah Owyang’s blog for some good […]
@26Among brands listed on TC there are only few lifestyle brands such as Apple,but it’s funny that TripAdvisor will advertise this way although they have fbapp with more than 1m users.I wonder how many
users of ebay or clients of verzion are fanatical about them.App’s are much beter method for advertising since they are more engaging and have some value for consumer,but in lack of creativity the easiest way is to throw some money.
I really don’t get this thing. I can imagine someone being a fan of a movie, band, writer, etc.
I can even imagine someone that is a fan-like of some manufacturer (apple was named in previous comment).
Well, i can’t picture finding a facebook profile declaring being a fan of some dish washer detergent. This seems to apply only to some high targeted brands, or “very cool” wannabe… perhaps. I have an HP notebook, but i have no problem buying Dell if price/performance is better (most CON-sumers will, i believe).
Neither i can picture a user that will not make a phone call unless s/he has an iPhone, or not using internet unless from X provider or not giving a present to a child unless it’s from Disney.
This is about preference, not ultimate need. This idea everyone is talking about make human beings seem like automatons absolutely influenced by some BS.
JEREMIAH: you keep insisting on how is going to be about community, conversation, treat your customer as humans, etc. This seems to me like going the opposite way. Remember your own words: people will notice when you [brand] are not transparent (so they will when a user is acting like a brand-idiot or brand-iot :-).
Yet, i think this is important for online advertising. But that’s it. It will probably increase click rates, but to be honest, i use gmail and i don’t even bother to read ads (which are very targeted to whatever mail i’m reading).
[…] For more, see Eric Eldon’s post at VentureBeat, and some thoughts from Henry Blodget at Silicon Alley Insider. Jeremiah Owyang calls it the rise of the “Fan-sumer,” but I think his portrayal of the new ad platform and its prospects is, well… overly rosy. […]
Hey Fansumer, isn’t that kind of like the person that spends double on a pair of jeans with someone else’s name on it just to they can be in the cool crowd. Yeah, I think it will work.
[…] Jeremiah Owyang, Shar VanBoskirk and Charlene Li agree. According to their research, 83% of consumers polled place […]
@Wade, getting you to obsess over this was my MO for the day, ok not really. You make a good point, but the idea I was trying to drive home is that there are consumers, and then there’s another level above it, which we both disagree over the terms of ‘fans’ or ‘fansumers’.
Jose Luis, read my “To Know” points for the Next steps in brands. I clearly indicated that advertising is NOT enough. Brands must be part of the conversation.
[…] to the masses. Both strategic moves flooded the platform with innovation and ultimately enabled the advertising initiative introduced today (or follow the discussion on […]
[…] beer or two with my name on it. Until I get home stateside to write about this more, you can read a pretty cool analysis of the newly launched Facebook and Myspace ads campaigns […]
Jeremiah,
i’ve re-read part of your post after my comment and i think i understand what you meant. I’ve also gave further tough to this whole thing.
True: when i’m about to buy a (non-ordinary) thing, i seek advice from people i know, but not necessarily from people i trust.
Also true: if what i get is (or seems) too biased, i re-seek advice.
What doesn’t seems to work at all is the idea that most consumers will behave like: “i trust X that consumes Y” then “i consume Y”.
I think it may work in must-fit-in groups, not in massive consumer scale and in the former, it will not be out of trust but out of social pressure.
What is true is that targeting (and effectiveness) will probably be higher than in today ads and this will be a very good tool for advertisers.
Call me jaded, I’m underwhelmed by the whole SocialAds thing. (Same w/OpenSocial).
[…] L’analyse de jeremiah ohawong sur les nouveaux reseau publictaire de myspace et facebook : MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th… Et Toutes les news sur le sujet et le live blogging de techcrunch […]
[…] to brand updates as ‘Fan-sumers’ (update: This term was apparently coined by Jeremiah Owyang from Forrester Research - not Facebook […]
Facebook Ads - do they have a cluetrain?…
So…Facebook’s new Ad platform is the next 100 year turn in the way Ads are served, we are told. Sez Zuckerberg:
“Once every hundred years media changes. the last hundred years have been defined by the mass media. The way to advertise was to get…
re: Facebook: This seems fatally flawed. It’s all very well appealing to ‘fans’ of brands, but they’re the only ones who care. Apple’s a great example. Brands would have to believe that fans attract fans in some sort of lemming fashion. I can’t see that happening except for those products that have mass appeal or which are so compelling as to be no brainers. Apple again is a good example but it is one of a very small number that can pull that trick.
Nick Carr’s ascerbic analysis seems reasonably on the button.
Whatever happened to the ‘conversation’ in all this? Seems to have vanished as fast as Zuckerberg can churn out new buzz phrases. Just how much can you say about a can of Sprite or is it some mindless game we’re supposed to think is cool? Return of the Asteroids?
Then there is the relative size of Facebook compared with Google. What’s the cash difference between the two? I wonder how much M$ will have to continue piling into this in order for FB to remain competitive?
I’m sure FB will work this all out over time but this doesn’t seem well baked to me. In the meantime, social ads seems like a combination of spyware+spam.
Jose, thanks for coming back for a closer look.
Mark, You’re right to feel underwhelmed, as OpenSocial has not been delivered to the market, it’s just being framed out.
Dennis, A conversation between companies and consumers will happen, this is how brands will get them to add them as ‘fans’. Conversations will increase, but at the same time, advertising becomes more sophisticated and more targeted.
Thanks for the great summary, duly linked!
http://blogs.guardian.co.uk/technology/2007/11/07/facebooks_social_advertising_system_and_the_rise_of_the_fansumer.html
I’ve been looking for a social advertising solution for some time, might as well see how FB works for us. There is a definite problem for a lot of products, but I feel there are products that people really do get attached to and want to declare their affiliation to - Apple, again, but there are others.
I was overwhelmed by the consumer response to my company at my first trade exhibition; I think this could work as long as the advertisers don’t go overboard.
[…] ramifications. Luckily for me I am a follower of Jeremiah Owyang and the work that he is doing. His post about what MySpace and Facebook are doing was nothing short of brilliant. You can also get more from Jeremiah and Robert Scoble in a […]
What surprises me… well. What *doesn’t* surprise me is that then “fan-sumer” (or, “fan”) has been around for many, many years - hence the word “fan”. That companies are finally finding themselves able to market to said fans on the internet, after a decade or more of individuals coming together in Yahoo groups, or my old job, SmartGroups (no longer with us), creating groups obsessing over specific products, which tended toward TV or music but could equally be a particular type of code, a kind of chocolate bar or indeed, a type of cat.
At base level, every specific targeted area which these self-created groups were centred around (as opposed to groups celebrating family or friendships, which can only tangentially be marketed to) can be described as a “brand” of sorts. That Facebook has finally found a way of concretely monetising these interest groups and is leveraging its “this year’s shiny new toy” reputation to boost its rep with branded goods is all to the good. The reason our groupware product was closed was for financial reasons: the ad software at the time could not fulfil the obvious promise of personalised advertising.
Yahoo groups et al might not seem as spangly as Facebook this year, but groupware is, and has been for years a valuable social commodity, which brings people together directly in to their inbox. If Yahoo has to any sense, they’re going to be revamping the customer barriers to entry as we speak, and reinventing its groupware advertising / commercial offering.
[…] Research finally looses its mind, and in the process introduces another word “fansumer”. Here’s my […]
While most FB and MS users think the sites are about them, they’re really about making money. It’s the same with TV because the programs exist to support the advertising. Up to now, the marketers haven’t gained a real foothold, but FB and MS are looking to make it easier.
Probably, users will ignore the ads much like they do on most Web sites. However,as some have posted here, companies will hire folks to disseminate propaganda. The marketers will find some way to make us believe it’s real and beneficial.
BTW, if I want to be a fan of a company, I can bookmark them in Explorer or Mozilla.
[…] Facebook and MySpace launch Ad Products I’ve covered and weighed the pros and cons of the announcement, to be fair, not everyone agrees with our call, so you can read other opinions from Doc Searls or […]
Well written review, clear and direct comparison of MySpace and Facebook offerings and constraints. Thanks for the analysis.
I think the Amway connection is probably the most accurate and that the advertisers will end up buying fans through rebates or discounts.
Downside being that if my friends decide to make money off of their profile, they’re in effect, selling access to me too.
So then, how much is my friendship worth?!
I have been a facebook ADDICT since 2004. I am also a junior SEO copywriter. To be honest I don’t understand how people can sit here and denounce the concept of falling in love with brands. Maybe I’m biased because I’m in advertising and have a general infatuation with brands to begin with, but some of those who have commented are taking a very angry-consumer anti-advertising stance. Which is understandable. Honestly though, advertising is part of pop-culture whether or not you want to come to terms with that. To integrate direct consumer-targeted advertising into this fresh social media platform is naturally the next step. It’s a change and it’s nerv-racking. But so is everything new at first. From a social marketing standpoint, facebook has continued to profoundly surpass myspace in the past year as a gatekeeper against spam and pedophiles. It seems that each new thing facebook has thrown our way has been received at first with skepticism and then with open arms. Mark Zuckerberg added the news feed a few months ago, and a mob of angry users finally realized that the facebook activity of “friends” is way too fascinating to look the other way. Even the applications were awkward at first but now every other person whose profile you happen to land on is “zombie-attacking” or sending drinks to their friends at happy hour. From an advertising stance, facebook is now announcing itself as another advertising medium. Just like TV, print, radio, other forms of internet, etc. As with every medium out there, media planners/buyers pick and choose space based on whether or not it will support brand identity. Just like some brands aren’t meant for radio advertising for example, some brands will not be meant for facebook social marketing. Dish soap, for example as one person mentioned, clearly will not gain much headway on a social platform. However, products whose purchase decisions are based on emotional appeals, specifically self-esteem related products (beauty, cosmetics, clothing, hygiene, cars, jewelery,etc.) along with other products which already have lifestyle personalities (alcohol, soft drinks, food, restaurants, entertainment/music apparel, etc.)have the possibility of doing well. In fact, many kids already have brands such as these listed as interests in their profiles. Many brands and products have formed entire sub-cultures of passionate followers. If companies can tap into these social atmospheres and be part of the group and “part of the conversation” as Jeremy says, then I think they will have success on facebook. This means of course, not bombarding users with spam type ads. The sell must be extremely soft to the point of non-existence. If companies can provide users with incentives, benefits, and a feeling of superior exclusiveness, the way applications do, then I think this type of advertising is here to stay. Finally, one other point about credibility of our friends and word-of-mouth marketing. Someone commented that friends/acquaintances are irrelevant in the purchasing decision. Really? How do you think every social fad/small business venture gets started? A small group of people do it, their friends follow suit, then their friends, and their friends, and their friends, until it becomes a trend of the times. This is life people. We look to our networks to gauge how we ourselves should behave. If our friends think its cool, we are much more likely to agree. We didn’t discard these behaviors on the playground. This is human nature and the main reason behind the appeal of social networking sites in the first place (not to mention every social phenomena of the past decade - file sharing, texting, blogging, instant messaging, etc.)I think it will be very interesting to see how companies integrate their brands through the medium, how facebook filters company usage of this feature, and how consumers react. Thanks.
[…] November 7, 2007 at 9:30 AM PT | No comments The dueling advertising announcements out of Facebook and MySpace have once again put privacy concerns into the spotlight. Technology commentator Esther Dyson […]
Instead of “fan-sumer”, how about “spam-sumer”? There is already a social network of people shilling products to their friends. It is called Amway.
If a brand can create an interesting utility or service, I will share it with my friends. If they can create an extremely valuable product, I am already sharing that information with my friends. Banners tend not to fit into either of those categories.
[…] MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th… Both Facebook and MySpace have launched profile and network targeted advertising and marketing products. As they both use member interests and the communities which they are part of, trust continues to become key in adoption as information is passed along (tags: MySpace Facebook Marketing SocialWeb) […]
[…] MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th… […]
[…] jeremy O weighs in […]
Jeremiah, thank you for the analysis. Here are my thoughts.
I’ve read the announcement about Facebook’s Social Ads. What are you thinking Mark Z? Did you ask your audience what they think about this? I know you asked your advertisers because they’re desperate to get real value out of the money they’re spending. (Full disclosure: Crimson posts ads on Facebook). I know you asked yourself how you can get more advertising revenue from your asset of 52 million members. But something is missing in this logic, and that’s value to the member.
I’d like to help address the question of: “Why would a member willingly help promote an advertiser?”.
Well I can think of four reasons, and I recommend that the advertisers who want to take advantage of social ads design their ads around these concepts:
1) Compensate members who forward ads. For example, “Earn Facebook points”,
2) Share the ad to help my friend. For example, “Here’s a job listing I thought you’d like”,
3) Share the ad to entertain. For example, “This is really funny, watch this”,
4) Share the ad to do some social good. For example, “Visit www.freerice.com and donate rice to the needy”.
To make this work, you have to provide value to your users. I sincerely hope that is a key part of Facebook’s plan.
[…] teraz kilka cytatów z Jeremiah Owyang: Brands can now self-serve a targeted marketing and advertising campaign within the already […]
Jeremiah: thanks for the great summary of the announcements by MySpace and Facebook this week, and the analysis of what they are likely to mean to the various stakeholders!
I enjoyed many of the other commenters’ posts, particularly Chris’ notion of “peer-to-peer spam”.
I also like your coinage of “fan-sumer” … but am wondering whether a different mashup of “fanatic” and “consumer” - “fancon” - may be more appropriate … especially given my own misgivings about perceptions of people who might have new financial incentives for expressing themselves in certain ways about certain goods and services. The notion of “conning” someone has its origins in the practice of gaining someone’s confidence (typically, in order to take unfair advantage of them). I don’t know how much confidence people have in their “friends” on Facebook and MySpace, but some friends will certainly have new opportunities to take advantage - fair or unfair - of the confidences they share on these services.
[…] about the actual system. For those interested in knowing how it works, I encourage you to read Owyang’s summary about it. Instead I’m going to try to analyze how, why and what can be done with the new […]
Here is another link to a very interesting take on the opensocial and micro community targeting
http://senithomas.wordpress.com/2007/10/31/how-googles-opensocial-will-revolutionize-community-targeting/
[…] Web Strategy - Why Hyper Targeting, Social Ads and rise of the “Fan-Sumer” matter to brands Comment: “The sell must be extremely soft to the point of non-existence. If companies can provide users with incentives, benefits, and a feeling of superior exclusiveness, the way applications do, then I think this type of advertising is here to stay.” (tags: advertising facebook beacon socialads socialgraph p2p viral immateriallabour status attention friends people storytelling) […]
Hey Jeremiah, this was EXTREMELY insightful!
But, where is my trackback? Hell’s machines….
great summary Jeremiah,
I’m wondering whether you, or others, see a fit related to B2B, within the environment. There is a clear match for B2C, but I’m not sure about B2B. thoughts?
Mike
Brands like Intel or Hitachi Data Systems could easily create a Facebook Brand Page, then encourage people that relate to those brands (could be from their day jobs) to become fans.
You can segment where the social ads are targeted to, so I could select “Embedded systems engineer” or “Data storage” and it would really hone in on them.
While B2C will likely have faster and greater adoption (as consumers may relate to a lifestyle or affinity) B2B companies also stand to gain.
Some people are passionate about what they do for a living, even in B2B!
[…] but my impression is that SocialAds makes a systemic feature out of the fake profile, which "fan-sumers" can friend and flack to their friends — clutter up their friends’ News Feed with […]
[…] There’s more nuts-and-bolts stuff at Web Strategy by Jeremiah. […]
[…] 10th, 2007 · No Comments We have had all the ballyhoo about FB’s new ad network, and now MySpace is predictably moving ahead too. I say predictably because clearly the […]
[…] latest example is how they approached targeted advertising. Jeremiah has a solid analysis of what the near-term will likely hold for both […]
[…] Jeremiah Owyang, a senior analyst at Forrester Research, said the move would see advertisements evolve to endorsements and give rise to a new breed of consumer: the “«www.web-strategist.com»”. […]
[…] Jeremiah Owyang, a senior analyst at Forrester Research, said the move would see advertisements evolve to endorsements and give rise to a new breed of consumer: the “«www.web-strategist.com»”. […]
[…] Jeremiah Owyang, a senior analyst at Forrester Research, said the move would see advertisements evolve to endorsements and give rise to a new breed of consumer: the “«www.web-strategist.com»”. […]
[…] not with my seal of approval. And despite the incredibly self-serving spin I’ve been hearing out of the blogosphere by prominent web strategists, the social advertising platform is NOT the […]
[…] Jeremiah invented a term like “Fan-sumer“, I came up with the term “Falstians” - the false Christians who are abusing His […]
[…] was one of the very few briefed on this product and my analysis on the announcement is […]
[…] says a Forrester “strategist”. Makes sense. But the corollary is wrong: “Facebook, which brings a unique solution evolves […]
What you seem to forget is that consumers trust their friends’ recommendations because they think their friends have no hidden agenda. When it becomes clear that they do, they won’t trust them anymore (at least not on Facebook).
Thanks Elad, and great blog post challenging the concept (which I left a comment)
If consumers are transparently and authentically giving these endorsements, will it then work?
This all reminds me of the arguments and discussions we used to have about “what’s a community?” and “what’s a friend?”
Before them I suppose there were arguments/discussions about whether or not it was moral/ethical/effective to put Magic Decoder Rings into boxes of Cheerios. If a kid got a Magic Decoder Ring and wore it he could be part of the “Masked Avenger’s” “community of crime fighters” that would tune in every week (and get Mom to buy buy more Cheerios).
This is all starting to sound very boring…
I have a bunch of friends who, like me, run businesses.
I’m happy to go out and evangelise (fan-sume?) what they’re doing, even though it’s the kind of thing that doesn’t seem “interesting”.
For example, one of them runs an industrial laundry in South East London. He’s got a full-time research chemist, and some cutting edge technology about how to clean out certain types of damage that haven’t been possible before (running through the UK patent system at the moment.) The downside is that his processes cost about twice as much as taking your suit down to the local dry cleaners
Is it “cool”? Nope.
Would I tell a friend about him, if say, he had uninsured smoke damage to a wardrobe full of designer clothes? Yup - I have done so.
Don’t know it’s the stuff of FaceBook legend, but it’s an example of how people can get evangelical about all kinds of stuff that is, for 99.99% of the population, really, really, boring.
Jeremiah,
Consumers are transparently and authentically giving endorsements to brands all the time - if a friend wears Nike on the racetrack, then I guess that this is word-of-mouth marketing, and it might affect my opinion on that brand, or influence me to try it out. But if Nike were to give him some form of an “incentive” to show up wearing their sneakers and make sure I noticed that, and then he’d be transparent and tell me all of that, how would that influence my opinion on Nike do you think?
I guess it could be a tool for brands that aren’t really brands yet, i.e. that no one’s ever heard about, to get some traction. No such thing as bad PR for them. But I seriously doubt that established brands would find this to be a good strategy.
while I think this will be closely followed by the TechCrunch 100K and Facebook fanboys, I’m not sold that becoming fans of brands on Facebook will meet with much viral success.
567 fans of Coca Cola even after only a few days doesn’t strike me as very impressive. There are a couple of iPhone “product” pages and they don’t have 200 fans between them. Scoble has 5000 friends but only 108 have become “fans” of his “brand” page so far. Still, by these metrics though, Scoble is almost as popular as the iPhone!
Jeremiah, what metrics will you be using to determine whether you’re right?
Robert, we’ll be using tools and methodology that we normally do at Forrester, stay tuned.
I suspect that Scoble IS more popular than the iPhone
[…] strumenti per acquisire clienti ad un costo competitivo… penso ad esempio alle evoluzioni che stanno accadendo nei social network, al marketing virale, ma anche alle nuove opportunità nei network di contenuti. Tutto da testare e […]
[…] MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th… Both Facebook and MySpace have launched profile and network targeted advertising and marketing products. As they both use member interests and the communities which they are part of, trust continues to become key in adoption as information is passed along (tags: marketing socialmedia advertising) […]
[…] Jay Stevens ging ook kort in op hypertargeting: het zeer precies kunnen targeten van gebruikers op basis van ongestructureerde gegevens. Hypertargeting stelt adverteerders in staat om in de omvangrijke sociale netwerken je doelgroep heel precies te kunnen selecteren op basis van psychografische factoren. Zowel MySpace als Facebook hebben dit recent gelanceerd (zie ook MySpace, Facebook showcase targeted Web advertising en MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th…). […]
[…] MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th… Annotated ‘ […]
[…] MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th… Annotated […]
[…] MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th… Annotated […]
[…] My daily readings 11/20/2007 MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of th… […]
[…] Everywhere I turn lately, there has been a discussion about brands and our relationship to them. One of the co-founders of Cloud Four, Lyza, wrote about Brand Affinity recently. My ex-coworker Chris Higgins picked up the theme on Mental Floss. Finally, Facebook’s recently unveiled its big advertising push with an emphasis on “Brand Fans” and “Fan-sumers.” […]
[…] online. And this snippet from Scobleizer will get a picture of the Ad thing of Facebook to you: Jeremiah Owyang, Forrester’s new social media analyst, has the best analysis I’ve seen of what Facebook and MySpace’s new ad platforms mean. « Bell to offer […]
I was reading MSNBC’s article “Facebook’s pursuit of ‘fan-sumers’”, in which you stated that the new advertising attempts on Facebook are “an opportunity to make marketing better” “Since trust is strongest between friends and acquaintances…advertisers should be excited about the opportunity to insert themselves into conversations on Facebook”.
as someone who is a strong opponent of aggressive advertising and a supporter of word-of-mouth, i need to point out that what’s missing here is that word-of-mouth is trusted because its an expression of voluntary information for support of a product that stands out from the rest. if we are impressed enough to tell out friends, we are saying that we support this product/brand because it exceeded our expectations compared to what else was out there. Facebook’s new Beacon advertising is not the same and is a blatant attempt to hide within this trusted form of personal advertising. Beacon is not a show of support, it is only showing others what has been bought. the product has not been experienced yet, and therefore, it is not word-of-mouth, in which people share and EXPERIENCE. this new tactic is not a positive step and is, in fact, more aggressive selling on the part of the companies who have signed up. this is a false sense of ‘trust’ being created simply because one friend decided to buy a product. i will be boycotting those companies and, while i am already selective of the information i share on Facebook (i.e. no interests are ever listed on my profile), i will be even more selective of my use of Facebook.
Does anybody knows how to insert a Facebook Beacon to a website.
[…] the first link to Pages), it is pages that I’m currently most interested in. Jeremiah Owyang wrote when pages first […]
[…] I’d love to assume that most people reading this are already well-aware of Facebook’s recently unveiled “social ad” system, allow me to explain for anyone still in the dark. Facebook has teamed up […]
[…] I’d love to assume that most people reading this are already well-aware of Facebook’s recently unveiled “social ad” system, allow me to explain for anyone still in the dark. Facebook has teamed up […]
[…] Facebook launches […]
[…] Jeremiah Owyang, a senior analyst at Forrester Research, said the move would see advertisements evolve to endorsements and give rise to a new breed of consumer: the “«www.web-strategist.com»”. […]
[…] MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of the “Fan-Sumer” matter to brands, here is the post that describe the deals in details. […]
[…] Forrester analyst Jeremiah Owyang explains & compares My Space and Facebook advertising products […]
[…] el último mes, Facebook ha sido objeto de múltiples conversaciones en la red, por el lanzamiento de su proyecto publicitario Beacon. El propósito de este sistema es el enviar información sobre la actividad de los usuarios de esta […]
[…] Mark Zuckerberg & Co. stood up in front of the advertising community in New York today and unveiled Facebook Ads, an ad system that allows companies to use the Facebook social graph and to develop highly targeted ads. Large brands such as Coca-Cola […]
[…] Having just appeared this year from Facebook, it uses contextual information from users who have become “Fans” of a brand, then ads are severed to their network, in an endorsement. This has been highly controversial, and […]
haha, I like Jess Kutchs’ word, “spamments” lol. Yeah MySpace has too much of it and seems like Facebook will start taking away some of its market and advertising share. Besides, have you seen the awesome integration Facebook has included in its advertising and marketing campaigns for businesses? It’s very impressive and similar to Google Adwords in many ways.
[…] Vous vendez des pneus, vous souhaitez faire de la promo auprès des aficionados de formule 1… C’est maintenant possible… En […]
[…] as "fans" rather than "friends", prompting Jeremiah Owyang to coin the term fan-sumers (fan + consumers, a la prosumers (producer + consumer) … though I wonder if fancons would be […]
[…] This one is also good: http://www.web-strategist.com/blog/2007/11/06/myspace-and-facebook-launch-new-advertising-products-w… […]
[…] Having just appeared this year from Facebook, it uses contextual information from users who have become “Fans” of a brand, then ads are severed to their network, in an endorsement. This has been highly controversial, and […]
[…] as "fans" rather than "friends", prompting Jeremiah Owyang to coin the term fan-sumers (fan + consumers, a la prosumers (producer + consumer) … though I wonder if fancons would be […]
[…] Mark Zuckerberg & Co. stood up in front of the advertising community in New York today and unveiled Facebook Ads, an ad system that allows companies to use the Facebook social graph and to develop highly targeted ads. Large brands such as Coca-Cola […]
[…] just appeared this year from Facebook, it uses contextual information from users who have become “Fans” of a brand, then ads are severed to their network, in an endorsement. This has been highly controversial, and […]
[…] promote among the members network. I covered the opportunities and challenges of being a ‘fansumer‘ in this earlier analysis this year. This is not new, as I noticed David Berkowitz endorsing […]
[…] Σημαντικό υλικό για όσα γράφω βρήκα εδώ, και εδώ, και εδώ, και εδώ, και εδώ (thanks to […]
[…] Having just appeared this year from Facebook, it uses contextual information from users who have become “Fans” of a brand, then ads are severed to their network, in an endorsement. This has been highly controversial, and […]
[…] Web Strategy by Jeremiah […]
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