MetaMuse

CPM Ad Rates for Facebook Apps

Andrew Chen links to some data from Facebook app developers on the CPM advertising rates they're making. I was surprised to see that it's a little higher than I expected, but he noted the issues with sell-thru ("fill rates") -- the % of ad inventory that gets filled with an ad vs. remaining unsold.

If your eCPM with one network is $.50 and your sell-thru (or fill) rate is 50%, then you're no better off than the network making you $.25 eCPM with 100% sell-thru.

John Battelle's "Facebook Focus Group"

From John's post today, and the questions he asked a class at Cal Berkeley:

1. "How many of you have a Facebook account?" (nearly everyone)
2. "How many have heard of their new social ad platform?" (only a smattering -- surprising?)
3. How many of you are interested in telling your friends, via your newsfeed or in some other way, about purchases you make on the web? (not one hand went up)
4. "What if sharing your purchase decisions meant that, say, you got a $5 credit in your  account that you could spend at Amazon, or for ringtones, or whatever?" (about a third raised their hands)

Facebook Beacon: Spyware 2.0?

When Facebook Beacon was first announced and the first screenshots shown, I pointed out in a comment on TechCrunch (#43) the issues around the collection of data in addition to notification. Four days later, GigaOm called out Beacon's privacy issues as well, and has carried a torch since.

Beacon is a brilliant move by Facebook, but they're toeing a huge line (wrt privacy concerns). Regardless of their conceding on notification issues, Beacon represents an unparalleled level of user profiling without user control or transparency. Everybody knows that every media company on the Web is profiling each of us, but that said we still have more privacy online than we do offline -- most profiling to date is typically associated to an IP address only.

Beacon is coupling personally identifiable information (aka PII) to widely distributed collection of browsing behavior and attention data. Their data collection is not limited to their beacon partners -- Facebook can collect valuable user browsing behavior anywhere they want, via an ad unit, image, or any distributed beacon that calls back home -- whether or not you're signed in. In doing so, Facebook even collects behavioral information on non-users. And  Beacon partners are basically giving Facebook all their commercial activity. Many spyware companies of 2003-2004 didn't have it this good!

I believe this is one of the reasons why Microsoft bought into Facebook. Think about Beacon in every ad unit served by Microsoft! The reach of Microsoft's ad network, coupled with Beacon partners and all their transaction data, coupled with the PII within Facebook -- this represents an unprecedented level of personally identifiable attention data collection if they pull it off.

This is way way more than a notification issue. And I wouldn't be surprised to see NY General Attorney Elliot Spitzer joining the fracas. Remember the DoubleClick controversy of 1999? They came under intense public scrutiny, with lawsuits from 10 states, for their attempts to merge anonymous browsing behavior with PII. There is very little different here ...

I spend a lot of time thinking about how to directly couple user value to deep user profiling. There is a tremendous market advantage to any company whose users are incentivized to provide information about themselves and their browsing behavior -- as doing so increases the value of the service. (Others Online is one such attempt.) It's a virtous cycle of value, for both the company and the user. But there has to be full transparency and control for the user, otherwise it will be given the dreaded spyware label.

Unless Facebook ceases their data collection efforts, allows users to opt-out of ALL data collection, and/or provides full transparency and control, then they risk earning the label "spyware 2.o".

Social Network Overlap

In this height of Facebook mania, we've all seen or heard the opinion that Facebook is eating LinkedIn's or Myspace's lunch. I've seen some reports from Compete and Read/Write Web in the last couple weeks that imply (to me anyway) that they are each simply expanding the social network market rather than abruptedly taking market share from each other.

There is very good data on the demographic breakdown of the users, particularly in the R/WW post.

From the R/WW post:

• 62% of Facebook users also use MySpace, but only 15% of MySpace users also use Facebook.
• Only 5% of Facebook users also use LinkedIn, but 16% of LinkedIn users are on Facebook.

Slightly different numbers from the Compete post, which has a great matrix:

• 64% of Facebook users also use MySpace, but only 20% of MySpace users also use Facebook.
• Only 2% of Facebook users also use LinkedIn, but 42% of LinkedIn users are on Facebook.

To me Facebook is not a professional network, it's personal. LinkedIn is all professional.

Why Microsoft Bought Into Farcebook

I'm so tired of hearing about Facebook that I don't feel right about proliferating the BS without using a new name -- Farcebook -- catchy, yes? (though still hypocritical)

Just my opinion, but I suspect MSFT negotiated the farcebook move with three takeaways:

1. MSN LiveSearch as default search within farcebook. Over 600MM searches/month is compelling.
2. Exclusivity on ad representation/sales for certain ad types. Probably not ALL ads, but enough clearly. They already had this deal, but probably added to it.
3. Access to social graph data for MSFT's competitor to AdSense.

Farcebook is getting ready to announce some sort of SocialAds deal in NY next week. I would suspect they're expanding their Flyers service in some way. But what I doubt they'll do is distribute their advertising across the Web, like AdSense. But MSFT absolutely needs to do this.

MSFT now has all the advertising tools, sales people and agency relationships (through the aQuantive acquisition). What they lack are the publisher relationships and a compelling reason for publishers to switch from AdSense to their content network. Microsoft will launch an AdSense competitor which will not only utilize the profiling data/targeting from aQuantive but also the social graph from Facebook.

Here's where this potentially hurts Google. AdSense pays for shit. The AdSense ad unit is dead, from the standpoint of the creative life cycle -- people are now blind to it. And Google's content network is responsible for the vast proportion of their ad delivery. Publishers would gladly swap that program out and try something new, if there was enough buzz and especially if there was a fresh design.