Archive for the ‘ Facebook ’ Category

Facebook’s New Partnership – Tracking Purchases Made From Ads You See Online

Facebook made a big move last week that could change the dynamic of Dallas internet marketing — or spark a massive backlash.

According to The Atlantic Wire:

facebook digital advertising partnerIn an attempt to give advertisers more information about the effectiveness of ads, Facebook has partnered with Datalogix, a company that “can track whether people who see ads on the social networking site end up buying those products in stores,” as The Financial Times‘s Emily Steel and April Dembosky explainAdvertisers have complained that Facebook doesn’t give them any way to see if ads lead to buying. This new partnership is their response. The service will link up the 70 million households’ worth of purchasing information that Datalogix has with Facebook profiles so they can see if the ads you see changes the stuff you buy and tell advertisers whether their ads are working.

Specifically, Datalogix gets its information from retailers like grocery stores and drug stores who use loyalty discount programs to amass careful records of what their customers are buying. Datalogix’s site doesn’t list its partners, but from a Google search, it looks like the company has worked with CVS’s Extra Care card program.

For Facebook, this would help address some of the shortcomings in the company’s business model. The selling point behind Facebook is that user activity — especially listing preferences and interests and “liking” brands, products or services — can be tracked, measured, studied, and presented to companies interested in advertising on the site. All that data can be used to paint pretty detailed portraits of the consumer habits of Facebook users, and companies can target highly optimized ads at Facebook users who are most likely to become customers. At least in theory.

But Facebook has had trouble quantifying exactly how much a Facebook “like” is worth in advertising terms, and companies have started to sour ever so slightly on the advertising potential of the site. Google, meanwhile, has taken a similar but slightly different angle, using data gleaned from searches and other Google tools to build intricate consumer profiles. By adopting combining its user behavior with other sources of consumer data, Facebook would merge both approaches somewhat.

Inherently, there’s going to be lots of tension in this. On the one hand, no one wants to a company, government agency or any other entity watching their every move — especially when it comes to highly personal issues such as medical purchases. On the other hand, Facebook and Google insist repeatedly that all the data they collect is used only anonymously. Indeed, the backlash they’d face if it was revealed that they’d been abusing the data makes it plausible that they’re serious.

Moreover, from an advertising perspective, the vast potential of digital advertising fueled by all this data is mind-boggling. Companies will be able to spend their advertising dollars far more efficiently and reach far more likely-customers. Take, for example, the online advertising concept called re-targeting, which can only happen if websites are allowed to track the activities of the web users who visit them. Here’s how it works:

You visit Warby Parker, the online glasses seller. You look at a pair of glasses you might like to buy. You decide not to buy them right then. You leave the Warby Parker website. Later, on other Websites, you see ads with the pair of glasses you liked.

You see those ads because when you visited warbyparker.com, your browser downloaded a tiny piece of software, called a “cookie,” that told the ad servers on sites using re-targeting that you had previously gone to warbyparker and looked at a certain pair of glasses.

Ads that are “re-targeted” in this way are clicked on a lot, and it’s pretty obvious why. Unlike most ads in banners on the Internet, re-targeted ads are ones that you may actually want to see because they are based on your demonstrated interest in a product.

The benefits of re-targeting for companies are obvious: Fewer ad dollars. More customers.  A stronger bottom line. Moral concerns notwithstanding, it will become increasingly difficult not to take advantage of these tools when competing companies are thriving with them.

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Despite Wall St. Woes, Facebook Still Valuable on Main Street

Mark Cuban made news last week by announcing a (rare for investors) mea culpa about the huge investment he made in Facebook.  According to Web Pro NewsMark Cuban, who has been a steadfast supporter of Facebook throughout the IPO process, and an investor who purchased 150,000 shares of the company, is coming forward today to say he was wrong about the company.

[...] “I already sold it, I took my hit, my thesis was wrong. I thought we would get a quick bounce just about the excitement about the stock. I was wrong, and when you are wrong you don’t wait, you just get out. So I took a beating and left.” 

Here in Dallas, we pretty much love the ebullient billionaire. Even if he can be a little bit, er, entertaining at times from his courtside seats, he’s our billionaire. And no sports owner has done more for his team and his city than Cuban. This would be true (warning: chest-thump coming) even if the beloved Mavs hadn’t won the crown in the most satisfying way possible a year ago.

And there’s roughly 2.3 billion reasons why he’s earned Dallas-Ft. Worth’s attention when it comes to business and financial matters as well.

But it’s important here to make a distinction between Facebook’s success (or failure) on Wall Street and its Internet marketing value on Main Street — especially when it comes to social media marketing in Dallas.  If your goal for Facebook is stock returns, it could be deemed a failure. But if your goal is connect with vast numbers of potential new customers and clients, nothing has changed. It’s still an extraordinary tool.

Of course, there are links between the two realms. Unprofitability undermines the sustainability of Internet marketing tools —  and their long-term worth for businesses. But whether or not the social networking behemoth delivers a nice return to its early investors, its value to friends, families and businesses alike is proven and impervious to market whims.

If you read closely, Cuban is not condemning Facebook to long-term unprofitability or failure. Indeed, he said the site likely has long-term value in an article published the same day. Facebook just didn’t deliver the immediate returns he had expected and formed his investment strategy around, so he got out.

For businesses, the importance of Facebook isn’t going to decline any time soon. It’s still coming up with new, innovative ways to facilitate connections between businesses and potential customers. And it’s still being used by just about everyone you know.

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