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| By Justin Smith | 5 Comments » |
Earlier this week, Inside Facebook detailed the nascent market surrounding Facebook Page squatting: some entrepreneurs are building Facebook Pages around local cities and towns and trying to sell ad space on them for profit.
However, while the future of Facebook Page squatting in light of Facebook’s intentions for Pages may be questionable (Facebook wants Pages to be managed and operated by an authorized agent), that’s not stopping some from selling ad space on their own (legitimate) Pages.
The latest example is Us Weekly, the popular celebrity magazine, which recently sold a sponsorship of the News tab of its Facebook page to State Farm, according to AdWeek.
The State Farm sponsorship on Us Weekly’s Facebook page, which is not yet live, extends a campaign State Farm is already running with the celeb magazine. But Us Weekly plans to use Facebook page sponsorships as added value or independent ad inventory for other advertisers after that.
“We do anticipate that this becomes another tool in our tool chest, among meaningful ways to let brands reach our audience in a very credible, differentiated environment,” said Steven Schwartz, the chief digital officer at Us Weekly’s parent, Wenner Media, since January.
While Us Weekly’s Facebook Page only has 3,000 fans (it is in the process of launching a new version with the help of Involver), some Facebook Pages have several million, and could theoretically sell various kinds of sponsorship integration.
What does Facebook think of that idea?
“Currently we do not restrict Facebook Page owners from having sponsors on their public profiles. But, if brands are looking to create and maintain lasting connections with people our Engagement Ads are the single best way to do that,” a Facebook spokesperson tells Inside Facebook.
It’s probably a net positive for Facebook for there to be a market for Facebook Page inventory, but Facebook will be paying close attention to see how the market for Facebook Page inventory develops. Facebook has allowed application developers on the Facebook Platform to sell their own inventory with almost no restrictions since it launched in 2007, and recently started alpha testing its own in-house ad network for app developers.
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April 24th, 2009 at 7:33 am
Though FB provides a great platform for us to communicate within, it is still wholly founded on our data. To that end; whilst prepared to accept the irritation of advertising on my profile without being paid myself, and in lieu of that service; if I now receive increasing invitations to be a ‘fan’ of something I don’t want, continued annoying application requests or even more intrusive advertising of any sort, I will quickly seek a new home.
The elegant advertising dollar relies on environments which can give advertisers originality, style and relevance. The Catch-22 for Facebook and indeed Twitter of course, is that they are trying to create that off the back of data which is not theirs, exists in a fast moving environment and is in reality pretty asinine in value. If I were a Celebrity or Brand, looking to maintain the cache I had worked so hard to achieve in tradtional media, then I’d also be dubious as to whether large numbers of so called ‘fans’ actually translated into sustainable eyeballs on an ongoing basis and wonder whether leading advertisers may actually feel their brands are compromised in such a viral and unsophisticated sea of opinion which is also awash with cheap unfettered advertising alongside which they will inevitably be compared.
Most successful businesses follow an 80/20 rule where 20% of the top Clients pay for the remaining 80% which earn very little. In Facebook and Twitter’s case (and largely because they, unlike Google, have possibly arrogantly tried to monetize after the fact), I believe secretly they’ve arrived at a place where that 20% revenue opportunity doesn’t actually exist within their current platforms and never will because of the very nature of them.
That’s just my opinion of course, but I fear that the excitement of seeing 200m people connecting in one place is clouding many smart people’s subjective judgement. Sure the Ashton Kutcher race and Mark/ Evan wowing Oprah is all very fun, but who really cares. Certainly not those with the big cheque books who I think in my own view would be wise to keep their distance for some time to come, just in case this is another ‘emperor’s new clothes’ model we may come to refer to as sub-prime advertising one day!
For my part, I always want to build something I actually own & earn Bill Gates kind of money so I can give it all away again and shall therefore keep focusing on the 20% and leave the 80% to others.
I think these issues will be resolved of course but I predict some interesting and unexpected partnerships/ mergers/ takeovers pretty soon before the heavily commited VC’s realise even hyped IPO’s won’t deliver much return; as well as knowing of course, some new pretenders will again arrive & steal everyone’s thunder again!
In Facebook’s case their smartest move is in my opinion not within their own platform, but more about that another time!
April 26th, 2009 at 9:23 pm
[...] 2 Facebook told IF, “Currently we do not restrict Facebook Page owners from having sponsors on their public [...]
April 27th, 2009 at 8:32 am
[...] with Us Weekly and State Farm. This news, in turn, was quickly picked up by Mashable and Inside Facebook, with the latter including a quote of support from Facebook. With this coverage alone, Involver [...]
April 28th, 2009 at 10:23 am
Not much of an ad, doesn’t link anywhere. Apart from the Statefarm logo, I see no advantage for them. And with not even 4,000 fans, not exactly a huge hit.
April 29th, 2009 at 7:00 am
[...] Involver has used Us Weekly’s Facebook public profile, where many of these apps have been implemented, as a poster child to lure potential clients to the product. The implementation received notoriety because Involver helped the magazine set up a spot within the public profile’s main News Feed to push sponsored (paid) content from State Farm Insurance. [...]