Facebook Efforts on Advertising Face a Day of Judgment
SAN FRANCISCO — In the race for digital advertising dollars, Google has been the clear winner, with its ability to customize advertisements based on what you search for. But Facebook, which customizes ads based on who you and your friends are, hopes to be a contender.
Context & Ripple Effects
Facebook’s advertising strategy has been in development since its early stealth advertising-system push and its social ad-network plans of 2007. By 2011, reported advertising bookings showed it was already pressing into territory associated with Google’s search-led business.
The challenge is not merely building an ad product but making social targeting useful to marketers. A 2010 account of ads that struck users as off-key underscored the risk that relationship data can be less immediately commercial than a search query.
First-order effects
- Facebook’s advertising operation is under pressure to show that targeting based on users and their connections can attract digital-ad budgets alongside Google’s search-based targeting.
- Advertisers gain another large platform promising customized ads, while Google faces a more direct contest for campaigns that depend on audience targeting.
Second-order effects
- Facebook’s ability to win budgets depends on whether its social signals produce relevant ads without repeating the user-relevance problems highlighted in earlier coverage.
- Google’s leadership raises the standard for Facebook: marketers can compare social targeting against an established search-driven alternative rather than treating Facebook as a standalone buy.
Third-order effects
- If social targeting proves commercially durable, digital advertising shifts toward competition between different forms of user data—declared relationships and behavior on one side, expressed search intent on the other.
- The contest makes ad relevance a core platform capability, linking consumer experience and advertiser demand more tightly than simple audience scale alone.
The trend: Digital advertising is broadening from search-intent targeting toward platforms seeking to monetize social and behavioral signals as inference inputs.