Short Tail Facebook ADS System - Facebook

When I started reading some interesting articles about Facebook’s new ad system, which is supposed to combine what your friends are doing, buying and recommending, with the available ad content, my first thought aside from the spying-on-users issue was “How are they going to get the little guys on board this thing?”.

Let me explain: CocaCola doesn’t really -need- to advertise on Facebook, as it’s one (if not the most) recognized brands on the planet. Still, it has created this animated Sprite Sips Facebook application, which you can “boost” with codes found under Sprite bottle caps. The app will most likely be installed by a large number of people, basically, because it comes from a well-recognized brand which is also regarded as cool, many of which already drink the stuff on a regular basis. Read more

What is happening is that users are marketing to other users with well-known products - but would they do the same with, say, ‘BoogieCola’? This imaginary company may be desperate to market its product as much as it can, having just launched into an already crowded space, with a product that may not be so nice and with a brand image which could be the result of the CEO’s 5-year-old son’s doodling on a paper. In other platforms, they could buy their way into the top advertising spots (read: Google AdWords), and make an impact across a wide population segment. While not a guarantee of success, at least you will not be able to say you failed because nobody knew you existed. On Facebook, this company would have probably gone largely ignored - as the ads targeted to users would probably point to the already-known, already-heavily-recommended brand. Thus, it will be pretty hard for newcomers to make Facebook an effective platform for entry into a market. In the end, the (OMG I’ve said it, I will burn in hell!) long tail of advertisers, who provide a sizable chunk of Google’s revenue, will not be sending their bucks to Facebook.

Could this new system make substantial revenue for Facebook? I guess so - but not in the long term, and most definitely not enough to even consider taking Google out of the picture. Google is omnipresent in many countries and market segments, while Facebook has had an impact basically in the US, a large market by itself, but again, not as big as the one the Big G has access to.