Summary
The Businessweek article, "How Facebook Will Upend Advertising," points out the growing popularity of social networks like Facebook and hence the growing potential to utilize social networks as ad vehicles. The article states that we are on the verge of breaking the mold and that soon we can expect all media to be trackable and accountable. The article also points out the new opportunities in technologies like Facebook's Connect. "Recommendations" from a peer group, in the form of what's most popular in the group, are not a direct form of advertising and can feasibly be as effective as word-of-mouth. The challenge is to exploit the advantages inherent in these new forms of peer-to-peer marketing.
Analysis
Facebook's importance in the world of social networking is undoubtedly significant, but what the Businessweek article purports, i.e. that Facebook will revolutionize the way the industry conducts business, is exaggerated, and for the time being, unfounded. Facebook - or any other social network website including Myspace and Twitter - has yet to stumble upon the holy grail of finding an effective way to utilize social media to advertise to its users. Facebook's current offering is far from being pinpoint accurate, but it is a good sign that the site hasn't resorted to unimaginative banners like Myspace has. It remains to be seen whether Facebook will succeed in figuring out how to use new technologies to advertise in a non-obtrusive way that won't result in backlash from its famously sensitive users. The good news, however, is that Facebook has the smarts and the financial backing to invent and test many vehicles. The process of finding new kinds of ads will most likely be ongoing, because to retain a user's interest, the vehicles will need to evolve constantly. Facebook will continue to have a major impact on Digital, but for TV, Print and other traditional media, Facebook's influence will be in terms of aiding Digital to take a greater share of the overall ad budget, not in terms of how those media are bought, sold and packaged.
