A small but powerful tweak to Facebook's 'social advertising' ad products

News of Facebook's "sponsored stories" came out a little while back, but since I haven't noticed any on my quick scans through FB (might have caught a case of banner-blindness recently), I had pretty much forgotten about it until today. Adage just did a story on Facebook's 'social advertising' features to advertisers and gave a good overview of the different offerings.

Many of the reader responses to this article were predictably unhappy that Facebook would 'sell' users' activity information and even users' likenesses to advertisers, especially without the ability to op-out. Some pointed out that if this ad style became popular, it would invariably cause Facebookers to think twice before hitting the 'Like' button. Keep in mind these were Adage readers who you'd think would be pouncing on these new tools.

But by focusing on the privacy concerns, we might be missing the bigger problem underlying the direction FB is taking to create this so-called 'social advertising'. Traditional WOM is driven by 'customer delight'... where the product or service has significantly exceeded the threshold for 'satisfaction'. The awkward step-sibling of WOM is network marketing where the WOM is incentivized by providing cash payouts to the person spreading the word. In both cases, the message stems from benefits received by the messenger. With FB's 'social advertising' offering, they are silently collecting the rent that should be paid to the messenger to convey the WOM. While it might seem like an elegant way to generate new revenues without disrupting a Facebooker's routine, I think this approach is both flawed and short-sighted.

The value of WOM is in getting the messenger's endorsement. A subtle change to the flow could make this 'social advertising' product truer to traditional WOM, less creepy, and ultimately more effective. Instead of treating user's 'Likes' and other activites as implicit approval, FB should pop up an explicit request to endorse or promote the product or brand. These pop-ups only happen if sponsored by an advertiser. Would we, as users, be willing to endorse the specific product or brand? Well, if they gave me 'customer delight', they would've earned it and I'd be happy to oblige. If I was just merely satisfied with the experience, I might need to be incentivized. In that case, advertisers should take a page from Groupon's friend referral program and offer some benefits to both me and the friends who will see my endorsement.

What's the impact to FB if they made this change? Less creeped out Facebookers for one thing. Also, the cost of the incentives offered by the advertisers to the users should be more than offset by the value of the actual endorsement. If these endorsements work and really brings to life the full effect of 'social advertising', then the biggest winner of all will be Facebook.

Win. Win. And Win.

What do you guys think? Know who I might forward this idea to at Facebook? It might save us from having our pictures next to products or services that we'd really rather not. :)

Can Google Stay Relevant?

I can't help but wonder what the news of Larry Page taking back the reins mean for Google. Unlike Apple when Jobs return in 1996, Google is still minting money by the boatloads. However, I wonder how many people in the industry still look to Google as an innovation powerhouse.

I'm still a happy gmail user and can still remember switching over from my Y!mail account. Gmail was definitely a couple steps ahead of its competitors at that point. My big Google hope, however, was for Wave. When word got out that a tiger team at Google was attempting to re-imagine email given everything we had learned in the last 15 years, I was hounding friends over at the GooglePlex for an early invite. While Wave was definitely fun to play around with, the half-hearted attempt at rollout and poor integration with Gmail probably doomed the product. Furthermore, Wave had pretty much completely missed the social train. Little surprise that the project got canned and the technology got "reabsorbed" into Google proper.

But there hasn't been a big innovation hurrah out of Google since. Buzz did not re-imagining anything. Its features are incremental and, as a result, it hasn't made a peep in the roaring social party. But the worse offense is this latest news of a Google "Offers" Groupon clone.

The pitch sheet for "Offers" that got leaked to the media describes a product that hardly brings anything new to the market. True, they offer to run ads on the display network, but that was a pretty obvious next-step for Groupon and LivingSocial in order to broaden their bases. But what surprised (and disappointed) me the most is that Google is offering local merchants the same broken economics that Groupon is peddling. As a leader in both advertising and technology, Google should definitely be attacking Groupon's Achilles heel by creating a marketing management framework for local merchants that actually makes financial sense. And it doesn't end there. The timing for leaking this news is abysmal! If the strategy or M&A folks over at the GooglePlex had leaked this document a couple weeks before talking to Groupon, they would have had a bit more strength at the negotiation table and, failing that, would have at least thrown some cold water onto their competitor's fund-raising. It didn't even require writing a single line of software. Just the 2-page pdf was enough.

Getting the "Offers" news out so strategically late really calls to mind Google's stumbles in the last couple years. Maybe Page taking direct control will give the team a boost. But since I didn't have the impression that Larry and Sergey had been marginalized by Eric, I'm not expecting a significant change. I'd hate to be the first to ask whether Google will remain relevant in the years to come. I couldn't help but cringe on hearing Carol Bartz talk about making Yahoo relevant. Apparently, when a company is mentioned in the same sentence as the word "relevant", irrelevance might not be too far off.