Contextual advertising – How does Facebook fare?
Contextual advertising is one of my favorite subjects in marketing. How do we find the context and create value from that of users?
Context is what advertisers look for – they want to be able to speak directly to their target audience, and sometimes that target can get very well defined (18 year old male who plays games and has looked at game reviews within the past 6 months).
Google has a strong context because the user is looking for something on Google, and advertisers might be able to provide that. For instance, if you’re looking for batteries for your computer, ads that offer low cost batteries with good service would be attractive. I’ve clicked on some of them before and they haven’t disappointed.
Facebook – well, its context is kind of weak. The user is on Facebook to kill time or to see what their friends are up to. Facebook provides all that the user wants – therefore, users will not click on the ads that are on Facebook because they just don’t have any need to. Facebook’s context in this sense becomes like TV’s context – its there because you need to fund the social network. Tolerable, I suppose, but its hard to find people who click on ads on Facebook. The most you can do with Facebook’s ads is make an impression, much like the ads on TV.
We can ask ourselves, why has TV with ads been so popular, and why hasn’t something beat it out? Well, it just turns out that people would rather have free TV with ads than pay for TV. People find ads tolerable on TV. I think this is the same with Facebook – will some other social network come in to steal Facebook’s revenue? Will ads make people leave Facebook for something else? Maybe. But I’m inclined to think that, like TV ads, Facebook ads are here to stay, because how else will Facebook be funded? Or any other social network for that matter. All social networks that are up-and-coming will have to deal with this issue, and unless they can come up with some specific feature that gives them magical revenue numbers, they’ll have to include ads to fund themselves. So, will ads hurt the user’s experience? Yes. Will they be drawn away to different social networks? Probably not. Eventually, all social networks will have some form of advertising on them, because that is the model that they are using right now.
