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Market Researchers in Your Facebook?

Rumor about new product highlights Facebook’s struggle for ad model

February 17, 2009

After a Facebook demonstration of a real-time targeted polling system at the World Economic Forum earlier this year, the Telegraph reported that the social network would start selling user data to market researchers this spring.

Facebook quickly tried to hush the buzz and denied that polling would be part of a commercially available product or its existing Engagement Ads. However, the social network is currently testing a new type of Engagement Ad that would allow advertisers to pose questions to users.

“For many years, Facebook has allowed the targeting of advertising in a non-personally-identifiable way, based on profile attributes,” Facebook spokesman Matt Hicks told eMarketer. “However, the advertiser does not receive any data about individual users, and only knows that their ad was shown to a certain number of users who fit the category. Further, Facebook is not selling any user’s information for market research purposes.”

With the record set straight, at least for now, an underlying fact remains. Facebook has the herds—some 150 million users around the world, with 450,000 added daily—and now it’s time to bring in the cash cow.

Facebook is a promising, yet hardly realized, place for advertisers. eMarketer predicted in December 2008 that social network advertising spending will grow from under $1.2 billion in 2008 to $1.3 billion in 2009, with the category making up a steady 5% of total online ad spending.

US Online Social Network Advertising Spending, 2008-2013 (billions and % of total online ad spending)

According to Compete’s blog, Facebook is now the No. 1 social network in the US, with 68.8 million unique visitors and nearly 1.2 billion visits in January 2009. Slipping to second place, MySpace had 58.6 million unique visitors and 810.2 million visits the same month.

Top 25 Social Networking Sites Among US Internet Users, Ranked by Visits, January 2009

Other researchers, such as comScore Media Metrix, still rank MySpace higher.

Polls on Facebook would be a boon to marketers looking for real-time feedback on products and authentic consumer opinions.

Both LinkedIn and MySpace Music have taken advantage of their rich user data. In January, LinkedIn introduced polls that allow members to gather insight from targeted groups, starting at $50—and for free within the member’s own network.

In February 2009, MySpace Music president Courtney Holt told PaidContent.org that artists who partner with the music service get access to data on fan activity and preferences.

“Facebook’s Engagement Ad polling feature may be a precursor to a more full-blown market research program—one that Facebook isn’t quite ready to talk about yet,” said eMarketer senior analyst Debra Aho Williamson. “Social network profiles are a treasure trove of information about consumer preferences, and people talk about brands and products frequently. The key will be making sure consumers know how the information is used.”

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