Last week at Ad Tech London, a key conference and meeting point for the technology sector’s commercial players, Facebook had a large physical presence. Its booth stood out in the midst of a crowded exhibition hall, only dwarfed in size and impact by the Google stall, which had its own floor, one above, overlooking the whole scene.
You could say it was pretty apt staging by the conference’s organisers: Google head and shoulders above the rest of the technology scene, leading the way in innovation, online advertising and most importantly, digital revenues.
However, Facebook, both with its recent feature developments and commercial presence at Ad Tech, is sending out a message to brands and is unashamedly trying to take Google’s mantle as the place for companies to advertise effectively on the web.
The social network’s direct challenge to Google was pointed out to me by Nate Elliot, a principal analyst at Forrester Research, who was so surprised by this newly overt commercial strategy that he felt compelled to jot down what Facebook had written on the wall of its Ad Tech booth. The slogan said: “Find your customers before they search.”
Facebook is clearly trying to sell the idea that on its site companies can reach out to customers before they even know what they are looking for, unlike when using a search engine such as Google or Microsoft’s Bing.
In the last two weeks, Facebook has also launched Places in the UK. This mobile phone application allows users to alert their friends to their current location and provide a real-time update of what they are doing and where. It means people can now use the service to tell people about a great restaurant to visit or even a good spot for a picnic. The company has yet to turn on the commercial side of this new function, but the whole service screams local advertising served in real-time.
And then at the beginning of this week, Facebook launched a pages discovery tool which it slipped out quietly under the radar. Essentially the new tool is designed to help users discover branded pages as well as helping people find musicians and celebrities. “Page Browser” suggests pages to a user based on what they like, helping them to narrow down their browsing to categories, such as companies, and also allow people to discover interests based on what their friends like and what country they are in. Add this to the fact that people have started to shop on the social network (admittedly still a small base relative to e-commerce giants like Amazon) using shopping aggregators such as Payvment and it is clear Facebook is certainly trying to build a web within a web.
Joelle Musante, chief operating officer of Payvment, which defines itself as a social commerce platform, unsurprisingly believes e-commerce on the biggest social network on the planet is going to get big – with major brands such as Avon having started to sell their products via the site. According to Payvment it has 30,000 retailers on board, 200,000 users per month and with an average cart value of $42 (£26).
The fact that people can discuss their purchases easily before buying them, with their actual friends, on a platform designed wholly around communication with people they trust, certainly sounds like a compelling proposition for commerce online.
In its bid to attract major advertising money, Facebook is trying to pull all that’s great about the web: messaging, shopping, photo-tagging, location sharing, question-answering into one place.
If Facebook can get people to conduct most of their web activities through its service, it can increase the time spent on the site by the increasing amount of eyeballs – and then charge increasing amounts to brands for serving targeted adverts. However, taking a step back, it’s necessary for companies to apply some healthy scepticism.
The main issue with Facebook versus Google is that people do not come to Facebook and declare their intentions, which limits the serving of highly targeted advertising. The second issue is usage. According to Elliot, twice as many people are using search engines as are using social networks. And the third issue is attention. The fact is advertising within user-generated content, which Facebook is made up of, doesn’t work as well because people are focused on the other people’s activities on the site, as opposed to any commercial activities.
Facebook’s core challenge is to make people pay attention to marketing messages by companies. This is why companies advertising on Facebook need to make their brand message an engaging piece of content, as opposed to just a display advert, so that there is something the users can “like” on Facebook or share. It’s a different environment to Google, and one within which the marketer has to compete hard to get the user’s attention..
Equally, the advertising model around location-based tools has yet to progress much further beyond a voucher-type system, which means businesses end up giving away freebies all the time – without much proof of return. There is still a lot of work to be done in unlocking the value of this model. And finally, the e-commerce model on social networks is still very nascent and understandably many brands are nervous about selling their wares in uncharted territory.
Companies need to keep abreast of the huge changes and upcoming commercial opportunities on a site rapidly heading towards a billion users. However, Facebook as an advertising environment is still no match for Google, in terms of usage and the comprehension of intent, ultimately leading to consumption via click-throughs.
Facebook’s best function for companies, which brands can do through dedicated pages and highly innovative advertising campaigns, is to get people talking. Then, hopefully, if the brand messages are deployed correctly, after consulting with their friends, they will click through and convert the time spent by a company on engaging users into hard cash.