Facebook wants to improve their advertising targeting, but needs more information to do so. Where will this new information come from? Your web history. Something we reported two months ago.
This week, at Facebook’s F8 developer event, Facebook is expected to roll out a new advertising system and series of social buttons. These buttons will mimic Twitter and Digg buttons that are ubiquitous online.
Users can click the Facebook button while off-Facebook, signaling the giant with new information about their preferences that will then be fed into algorithms for advanced, and dead-on, advert targeting. More and better information will allow Facebook to boost its CPM and CPC rates significantly.
As mentioned, we called this back in February, naming the new advertising product “Facebook’s adsense.” Facebook denied it.
While we were not perfect on every small detail, we got the important part dead on: behavioral targeting is the future for Facebook, and that your listed interests and loves are not enough to fully nail down ad targeting. Facebook needed more data, and now they will have it.
If you put Facebook and advertising in to the same sentence, everyone thinks the same thing: privacy debacles. Beacon was bad, and this could follow.
From what we understand, Facebook will note when a user makes an action on a third-party website, and use that information. That makes the collection of data very active, not passive. If instead Facebook sets up the buttons to note any logged in Facebook user, and save that data hit without alerting them, we are going to see class-action lawsuits.
Still, this could be done very well. New Facebook buttons, if incorporated with perhaps advanced sharing functions would be picked up very quickly by every major website. That is, this informational spigot could be turned on in a matter of days.
It’s All About The Money
If Facebook wants to hit the IPO mark, it needs to have its advertising platform mature. A company cannot go public on the type of advertisers that Facebook seems to attract.
By improving their entire ad platform to include bucketfuls of new data, Facebook can chase and hold on to the largest ad budgets in the world, and with that stability move towards a major liquidity event. Not before.
Last week was Chirp, this week get ready for a Facebook deluge.