It seems that Facebook might finally have a monetization plan. According to the Telegraph, Facebook demonstrated its new instant polling system at the World Economic Forum in Davos:
In an attempt to finally monetise the social networking site […] will soon allow multinational companies to selectively target its members in order to research the appeal of new products. Companies will be able to pose questions to specially selected members based on such intimate details as whether they are single or married and even whether they are gay or straight.
Even though the Facebook database will allow pollsters to target just the right demographics, I remain skeptical over how feasible the model is. Essentially, the Facebook platform is so optimal for interacting with your personal network, many users are loath to do anything else — such as pay attention to ads and then click on them. I think this is one of the reasons that so many advertisers on Facebook (many of them colleagues of mine) have reported such poor conversions on their Facebook ad campaigns. As the Telegraph story goes on to note:
Rival research company IDC said advertisers are turning their backs on social networking sites because they have a lower “click-through rate” than traditional online ads. Only 57pc of social network site users clicked on an advertisement and made a purchase last year, compared to 79pc on the internet at large.
Come to think of it, Facebook’s greatest opportunity might be in affiliate marketing as a super-affiliate. That is, instead of trying to monetize its database by letting third parties target Facebook users based on the desire of those third-parties, Facebook might consider leveraging that database to recommend products/services to those users that they might actually be interested in already.
For instance, Facebook might considering leveraging the Amazon and eBay APIs to “hyper-target” their users with product offers that coincide with what Facebook knows their interests to be. In fact, such a monetization model would be considerably less intrusive than current Facebook ads or this new polling system. After all, users would prefer seeing things that they are already interested in over being solicited by a random third-party that is interested in the demographic that a user belongs to.
[Hat-tip Nick Tadd]
Best monetization of facebook would be on-page advertising