Facebook May Not Be Skynet, but It Is Getting Smarter, and That's Bad for Google
Wednesday, at F8, the annual Facebook Developer Conference, Facebook announced its open graph initiative to take the social network to its next logical evolution -- everyplace other than Facebook. The initiative is designed to use people's social interactions (when logged into Facebook, which is like always, natch) to shape their experiences across every possible connected environment. On the Facebook blog, founder Mark Zuckerberg stated that "the power of the open graph is that it helps to create a smarter, personalized web that gets better with every action taken."
Imagine visiting Pandora and it already knows how to program your station. Or visiting CNN and having it know what kind of news to display for you. As a consumer, there are potentially many benefits of the initiative, making many experiences you have more and more relevant the more interactions you perform.
In order to make all of this happen, a significant amount of non-personally identifiable data will be collected from consumers and made available to approved developers and publishers (75 at launch). As you might imagine, there will probably be some backlash from people concerned about privacy (heck, people made a fuss over the Census). But the promise here is that your experience on the web will be better thanks to Facebook and its delivery of more customized, relevant content.
This is all a very big deal if it's successful. Bigger than you think. And It makes Facebook a direct competitor to Google. Facebook has managed to succeed where Google has failed -- turning your social behavior into actionable intelligence. Google's major attempts at insights into web-wide consumer behavior (Orkut, FriendConnect, Checkout, Buzz) have not had anything close to the success that the Facebook platform has had. The intelligence collected from relationships with others, social micro-interactions (e.g., "likes," "shares," comments, updates), location (yup, Facebook's working on that) and even transactions (see Facebook Credits) will be inherently more valuable to advertisers than click-through and search behavior (as advertisers get smarter themselves about what those kinds of behaviors mean to their bottom lines). And make no mistake, this data will be collected en masse. Facebook expects to serve 1 billion "likes" in just 24 hours. By applying this kind of statistically significant intelligence to its Engagement Ads, Facebook can deliver even more efficient, impression-generating advertising for its customers.
And what the open graph suggests is that what happens off of Facebook may be even more important than what happens on it.
It seems to be an inevitability that all of this intelligence will one day be applied to power a socially targeted ad network as big (or bigger than) Google's AdSense. It would be a network that would theoretically deliver even better results for advertisers, resulting in higher CPMs/CPCs/CP-whatevers that can deliver higher payouts to publishers, making a choice between the two platforms a not-too-difficult one for those publishers.
Facebook took a huge step today toward becoming a lot smarter, and a lot more powerful. If you're an advertiser, you should take the cue. Start getting smarter about how social relationships and interactions impact your business. The brands that figure this out first will be the ones that are ready to take advantage of the new Facebook open graph initiative, and the inevitable developments that will ensue.
At a recent dinner, a group of friends of mine discussed whether or not Facebook's market capitalization would ever eclipse Google's. If this plan is successful, it may not be a question of if, but when.
Oh -- and if it does (and achieves sentience)? Please don't annihilate humanity, Facebook. We wouldn't "like" that. Bonus conspiracy theory: Former Facebook Chief Privacy Officer (and genuine, great guy) Chris Kelly is running for California attorney general. California's governor is Arnold Schwarzenegger. Ahnold was The Terminator. Circle. Complete.
UPDATE: Ad Age weighs in on this, and I have some comments in there too.
|ABOUT THE AUTHOR|
Ian Schafer is the CEO of Deep Focus, and can be stalked on Twitter at http://www.twitter.com/ischafer.