Newsweek: Facebook unveils ad targeting program

So Facebook finally grows up... and gets a proper business model. Then again.. is it a good business model?

It is ridiculous that both Microsoft and NY hedge firms are valuing Facebook at USD 15 Billion. (yes that is a big "B" and not "M".). I mean I did not blog when I read that, but certainly thought to myself "uh... why? What's the business models?" Up to recently, they were selling banner ads that do not work as well as icons ... I mean "Gifts"... to the same people who buy ringtones online. But that is not worth USD 15 BILLION!

So now they have unveiled an ad targeting program.

According to the Facebook Press Release, "Facebook Ads, an ad system for businesses to connect with users and target advertising to the exact audiences they want." You know what? It sounds like Google Adsense: " With Google's extensive AdWords advertiser base, we have ads for just about all categories of businesses and for practically all types of content, no matter how specialized. Google technology matches the most relevant and highest performing AdWords ads to your website."

I was getting excited when Newsweek started: "Facebook is giving users some control over whether to share information on their buying habits and other online activities with friends."

But the reality according to the press fodder was: "Facebook Ads launched with three parts: a way for businesses to build pages on Facebook to connect with their audiences; an ad system that facilitates the spread of brand messages virally through Facebook Social Ads™; and an interface to gather insights into people’s activity on Facebook that marketers care about."

Viral marketing is great but is it worth USD 15 BILLION SMACKAROOS?

During the a Google Panel, I actually suggested to Google why don't they let the AdSense site owners decide exactly what ad or product they advertise? This would apply to all social network sites they have and any Adsense customers. So let the market decides what it want to advertise on its pages and split the commission. Not just the product, but even choose the "etailer".

What if Facebook did this: produced a "What's in my purse?" widget/gadget/fadget and let people load up their "purse" with actual branded items. The brand marketers pay for this advertising AND facebook splits the ad dollar with the person. Extend this to "My mobile", "my watch", "my shampoo", "my computers", "my underwear", and even "my wallet" (including what type of Trojans and what flavor.). Imagine the freaking market research!!!

Now that is a business model. Not some silly "ad system that facilitates the spread of brand messages virally". This model is not viral. It is mainstream marketing and branding. And that's where the money is. It is not in viral marketing which is for product launches and market studies.

Besides transactional sites, all other web publishers are like any other media (print, TV, radio): Their main revenue comes from advertising. So get a proper business model to make the most out of that. Google currently gets the lion's share of my online marketing spend, because they perform and because I can track exactly how much money I make from the ads. And until Yahoo, Facebook, Myspace, etc get their collective acts together, they are still going to get left overs... if anything at all.

Peace. Out.