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Facebook loses face - November 30, 2007

The quick and ferocious backlash against Facebook’s involuntary viral marketing program Beacon should serve as a warning beacon for anyone banking on an ad-supported monetization strategy for online content.

The premise of most such plans is that highly targeted ads, delivered to Web surfers based on online behavioral profiling, will command fat CPMs even if the total number of eyeballs is relatively small.

At Digital Media Wire’s recent Future of Television conference, for instance, many panelists took it as axiomatic that consumers will welcome ads with their online content if the product or service being pitched is relevant to them.

“For us, monetization comes down to giving [content] publishers all the tools they need for tracking their content, for understanding the context it’s seen in and the personal context of who is viewing it,” KickApps founder Eric Alterman said. “It’s about who is watching, not what they’re watching. That’s what’s valuable to advertisers.”

Maybe so, but you better ask the viewer first.

Some of those Whos out in Who-ville could get at bit creeped out at the idea of being stalked across the Internet in order to be served ads, as Facebook found out when it started broadcasting—without warning—the online purchases its users made to all their little Facebook friends.

After 50,000 Facebook Whos signed a petition in two weeks asking to be left alone, the social networking site was forced into some quick damage control and added an opt-in feature to Beacon. Unless you click OK, Facebook now promises not to tell the world what you’re buying. Gee, thanks.

But if even Facebook users—who after all voluntarily put a great deal of information about themselves online for the world to see—object to being shadowed, content distributors and advertisers are going to have to be very careful about dragooning people into their marketing schemes without their knowledge.

Next time, the backlash might come not from users but from regulators.
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