The problem is the only way Facebook has found to make money is by treating all entities on the site as advertisers and charging them to share their content.
This business plan backfires because 1) not all entities ARE advertisers and 2) it was the content from these people, specifically friends, family, and creators that made the site worth visiting in the first place.
Now the incentives are misaligned:
- Individuals want to see great content, but they are now seeing more paid content and organically shared content which appeals to the lowest common denominator (babies, weddings, and banal memes)
- Creators want to reach fans but their posts are being throttled to force them to pay to be seen
- Brands and advertisers have to pay once to advertise their page on Facebook, and then pay again to reach the people who have already liked their page. Plus Facebook is not a place where people generally go to buy things.
Facebook stands in contrast to other social media like Twitter, YouTube, and Instagram where all content is shared with all followers.
Facebook is now compliant with the Online Interest-Based Advertising Accountability Program, and has to show the AdChoice icon in behaviorally targeted Facebook Exchange (FBX) ads. This allows users to know when an ad is marketed to them on their browser behavior. The catch, however, is that the icon is only displayed when a user interacts with it by scrolling of the gray "X" over the ad.
Facebook will change the "Report this Ad" text with "Learn About Facebook Ads," and users can choose to opt out of specific ad networks. As Engadget notes, however, whether this legally complies with the Federal Commission guidelines for "clear and prominent notice" is unsure, as the ads only reveal itself as targeted once a user interacts with it.
AdChoice implementation will start at the end of March.
Just came across a pretty interesting and entertaining look at three advertising channels that one can use to monetize their websites, including a look at demographics and such. For example, this look at Federated Media and MSN AdCenter:
MSN Advertising says MSN Tech & Gadgets (MSN and partner content) is “the place to reach technology users”:
Gender: 70% male, 30% female
Age: 69% are 25-54
Income: 61% have household income $50K+, 41% have household income $75K+
Education: 50% college graduates or higher
Occupation: 42% are professional/managerial
Federated Media says its sites “cater to cultural influencers, technology decision makers, early adopters…”:
Gender: 79% male
Average Age: 32.7
Income: Average household income range $50,000-$74,999
Occupation: 50% management, 20% Director or above
It should be noted that Federated Media is a closed advertising network, but the benefit there is that if you fit into their network, you stand to see a nice increase in revenue.
Read More | ZD Net
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