Facebook’s massive social community should be the advertisers heaven.  Millions of users surf to Facebook a day, all with at least some bit of information on them about where they live, their social status, their interests, etc.  These two characteristics alone make it easy to advertise on Facebook.  But really how useful is it?

We all know about the different banner ads, fan pages, flyers, and newsfeed ads that are supposedly aimed towards users but interestingly enough, it doesn’t seem to work that well at all.  Here’s a statistic from a site called Reach Students.  They ran a few tests and their most recent one at the writing of the article (July 2007) showed that “1.4 million page impressions delivered at specific universities – and only a 0.04% clickthrough rate”.  That’s an impressively bad rate.  The site even cites another site saying that’s the average for clickthrough rates on Facebook.  Really?  Why can that be?

There’s quite a few interesting reasons as described by Alex Iskold on the RWW blog about why this can happen.  Iskold has essentially 3 different arguments, including how much Facebook actually knows, what ads are getting aimed at us, and then really the one that I find to be the most important, the purpose of why we use a site like Facebook at all.  Without going into too much detail on Iskold’s arguments, I find each of the arguments to have some very good points to them.

•  How much Facebook actually knows about us is actually just at a very high level.  Facebook doesn’t actually know I’m a huge mystery novel nut even if I’ve put a bunch of those titles in my Favorite Books.  How is Facebook supposed to know that I actually only like a few of the bands that I listed in my Favorite Music and I only listen to another few religiously?  And finally, how many people lie or aren’t completely truthful on their profiles.  Lets face it.  A lot.
• I imagine ads getting aimed at us is pretty difficult and it is getting better by being able to vote whether some newsfeed item is good or not, but still, I’m not sure if this problem isn’t harder than it seems, partly because the information that Facebook gets from us isn’t that accurate.
• Finally, I go to Facebook to keep up with my friends, so I’m searching specifically for my friends and seeing what their up to, not necessarily any subject like what happened on Lost last night.  You can’t really sell me friends, but you can sell me a boardgame on Lost when I search for Lost.

With these few points, it does make sense that the clickthrough rate is so low.  So then how can we make this better?  I’m no advertising guru and honestly, I don’t have a great idea, but I can say that it seems like Facebook is taking one good step in the right direction.  The new Facebook Pages that was started a few months ago allows to become Fans of anyone who creates a Page for something.  This ranges from Music Artists to Food/Restaurants to Presidential Candidates.  Becoming a fan is almost like a separate ad serving application that lets our friends know what we are fans of (doesn’t this mean what we like EVEN MORE than the Favorite Music that we would have listed… funny enough).  But this gives us reason to actually search on the site for something other than connecting with our friends and slowly starts become closer to keyword searching because we’re actually searching for any updates on the Lost Fan Page.  Not to mention this Lost Page can actually be officially run by ABC instead of just a dinky little facebook group.

Obviously the connection to networks is how social networking can work (or can’t work) with advertising, but we can take this a step farther.  We have learned a bit about how Google can serve up adwords which are just Keyword-Based Advertising schemes.  Well I just said that this social network advertising is slowly becoming another keyword advertising scheme and I think it should become like that, if your prerogative is to serve up ads.  But they must also be disguised as this kind of scheme because we are usually not going to these social networks to search for the subjects that companies can sell us stuff for.  When they can though… watch out.

Sources:

http://www.readwriteweb.com/archives/facebook_and_the_myth_of_contexual_advertising.php

http://www.reachstudents.co.uk/blog/2007/07/11/facebook-advertising-warning/

http://ckwebb.com/social-networks-and-media/why-facebook-advertising-is-not-the-answer/