Facebook is planning to launch a new ad platform in the coming months, according to a Wall Street Journal report. The new system would target ads according to the personal information people have added to their profiles.
The ad platform would resemble Google's AdSense tool, the Journal reported, but leverage user profile data, such as favorite activities and music preferences. Facebook profiles offer up all kinds of data, including relationship status, hometowns, political and religious views, and many personal interests.
The ads would appear in the Facebook member's news feed, complementing banners that surround the page. If Facebook succeeds in taking a page out of Google's game plan, it could be a financial boon for the popular social-networking property. Most of Google's $10.6 billion in revenue last year stemmed from its advertising division.
Facebook is a self-described social utility that connects people with friends and others who work, study, and live around them. People use Facebook to keep up with friends, upload photos, share links and videos, and learn more about the people they meet. Anybody with an e-mail address can join.
This is not Facebook's first swipe at targeted ads. The company already serves up ads on the basis of information in user pages. Advertisers can buy and post flyers that appear in the left-hand border of Facebook pages for as little as $10. The ads are based on age, gender, and location of the user. The new system would offer much more robust behavioral targeting.
Facebook has reportedly been raking in about $150,000 for a three-month campaign under another model that offers advertisers their own page on Facebook and news feed ads. But the hands-on requirements from Facebook staff might make this a less profitable opportunity than the new scheme that taps technology to automate ad serving.
Facebook states its views on privacy on its "about" page. The company maintains that people should have control over how they share their information. For example, members can only see the profiles of confirmed friends and the people in their networks. Members can use Facebook's privacy settings at any time to control who can see what on the site.
This new initiative seems to depart from that stance. According to the Journal, Facebook's ad technology would "point the ads to the selected groups of people without exposing their personal information to the advertisers." But the Journal report indicates that Facebook's ad system will have the ability to "predict what products and services users might be interested in even before they have specifically mentioned an area."
Greg Sterling, principal analyst at Sterling Market Intelligence, called the rumored ad system a smart move on Facebook's part to deliver value to advertisers. However, he added, it could be a potentially risky move given the current state of privacy on the Web.
"Privacy is front and center again as a major issue across the board, from behavioral targeting to Google Maps' street view photographs. It's a little bit of a political minefield to talk about targeting based on profile data," Sterling said. "Still, Yahoo and others do it. I'm sure Facebook will assure its members that this advertising strategy can be executed while taking privacy concerns into account."