About 2 and half years ago I wrote about how I thought Facebook was going to launch their own version of Google Adsense. The idea was that Facebook would create an external advertising network that leverages that vast amount of data Facebook collects on its users to serve targeted ads based on likes, interests, music, comments, etc.
Well, 2 and half years later and GigaOm has confirmed that Facebook will release an external advertising network.
It is going to be interesting to watch how Facebook rolls out this network. How will they minimize complaints about privacy? Will they start with close partners first (Zynga, Instagram, etc)? Will it only be for external websites that utilize the Facebook Graph API? What will the impact be on the company’s bottom line? Will this be the killer revenue model that justifies a $100 billion valuation for Facebook? Should Google be nervous?
It is going to be fun to watch how this plays out and evolves over time…
I enjoy watching startups evolve. It is always interesting to me to see how they react to competitors and how they prioritize the roll-outs of features. Facebook has been really fun to watch in the way that they are always pushing the boundaries, which usually results in their members getting angry and Facebook easing up a little. When was the last time you saw Facebook add a major new feature that was immediately accepted by the community? I think you’d have to look back to when they added photos to Facebook to find an accepted feature roll-out.
So, what is next for Facebook? My prediction, and as a developer I can’t wait for this to come, is that Facebook will roll-out its equivalent to Google Adsense, except it won’t really be like Adsense. Imaging this… You have a website built on the Facebook Graph API where users login with their Facebook account. Now imagine that all you need to do in order to get extremely targeted ads on your website is to add a snippet of code. Facebook will then serve up revenue shared ads on your website that are targeted to 1.) everything Facebook knows about the user from their activities on Facebook, 2.) content on your website, and 3.) information that the user has volunteered on your website that you pass on to Facebook’s ad algorithm. Now how is that for convenience and effectiveness as a publisher?
I would image that this is probably coming pretty soon and probably would have been here one or two years ago if Facebook Connect hadn’t been such a flop. Now that Facebook has their new Graph API and 500+ million users, we are going to be seeing a lot more websites allowing users to login with Facebook. I would expect that Facebook will roll out this type of advertising relatively shortly. My time horizon for this feature is 6 – 12 months, and when it gets here – watch out! It’ll certainly be fun to play with as a publisher/developer and will escalate Facebook to a whole new level in terms of online dominance, competing with Google, and revenue figures.