MySpace Has What Facebook Will: Ad Targeting
Earlier this week, a lot of attention was paid to Facebook's new advertising platform, in particular how the company was going to let marketers use profile information to better target their ads. It wasn't a surprise, given the fascination Silicon Valley has with Mark Zuckerberg's baby.
Context & Ripple Effects
The framing here runs against the week's consensus. As the Wall Street Journal reported the day before (and GigaOM picked up), Facebook is building an advertising system that lets marketers target users off profile information — treated in Silicon Valley as a novel step for Zuckerberg's platform, which has been riding extraordinary momentum since launching the F8 platform in May.
The counterpoint GigaOM lands on is that MySpace, still the larger property by traffic, has been selling exactly this kind of profile-based targeting for some time. If true, the story reframes Facebook's announcement from breakthrough to catch-up, and makes the real contest about execution and advertiser results rather than who ships the feature.
First-order effects
- Marketers evaluating social buys suddenly have two large networks pitching the same profile-targeting capability, so Facebook's announcement competes head-on with inventory MySpace already sells rather than opening new ground.
- MySpace gets an unexpected positioning gift: it can market itself to agencies as the proven option while Facebook's system is still unlaunched and untested by campaigns.
Second-order effects
- Competition shifts from features to proof — whichever network can demonstrate click-through and brand-lift data from targeted campaigns will set the pricing benchmark both charge against.
- MySpace is under pressure to productize and publicize its targeting more aggressively, since a rival narrative that Facebook invented social ad targeting could erode its standing with advertisers even if the capability gap runs the other way.
Third-order effects
- If profile-derived targeting becomes table stakes across major social networks, user profile data hardens into the core advertising currency of the medium — raising the eventual stakes around privacy expectations and how transparently networks use member information.
- Ad spending follows demonstrated targeting precision, structurally favoring whichever network converts registration data into performance metrics fastest, a dynamic that will shape the two companies' trajectories regardless of who shipped the feature first.
The trend: Social networks are converging on members' own profile data as the primary targeting currency for brand advertising, with feature gaps between rivals closing in months rather than years.