Facebook cracks the monetisation code

The value of Facebook has tanked since the IPO last year, largely because after the hype, people wondered how the returns would be delivered when the obvious source, advertising, does not really work on Facebook. 

However, Facebook is in the throes of launching an extensively re-engineered search facility, “Graph Search“. This facility will enable placement of extremely focused advertising in situations where the search being conducted is for things other than friendly e-conversation. This change potentially removes the barrier to successful adverting on Facebook, the disinterest in anything commercial when interacting with friends.

This Wired article on Graph Search offers detail, but essentially, the new search facility reflects peoples networks as a graph, or network chart, and the search capability can interrogate the network, and answer questions, with extensive auto-complete suggestions based on your previous activity.

Google cannot get at the data held by Facebook, that is a huge resource of people, networks, preferences, links, and reviews  that can now be leveraged in searches conducted from within the Facebook community.

Similarly, the power of Linkedin is the connections between people and their work. Want to see who is connected to someone at a competitor, supplier, potential customer, and so on? now Facebook will be able to do it, perhaps better than Linkedin, particularly for the under 35’s.

An underutilised aspect of Twitter is the search capability, when used well, it is an enormously valuable addition to a Google search, and contains links that enable a deeper dive from any starting point in a topic. Other services like Pinterest also now chase the available advertising dollars, making media choices a complex nightmare.

Graph Search makes the battle for on line advertising even more interesting, and will add some extra lead into the saddlebags of newspapers as they try to monetarise their offerings. News Corp is in the middle of splitting their operations, separating newspaper film and television assets globally, restructuring to enhance revenue generation options, already having paywalls in place for their newspapers.  Fairfax is expected to introduce some level of paywall sometime in the next few months in an effort to stem the bleeding.

As the search capabilities improve, and paywalls emerge, the attraction of  free sources of information will increase, with the minor irritation of the presence of advertising. Facebook now appears to not only to be in a position to cash in on their huge network, but to potentially extensively disrupt the current web and remaining legacy media advertising options.

About strategyaudit

A small marketing and strategy consultancy concentrating on the challenges of small businesses that make up the backbone of our economy. The particular focus is on the strategic and marketing development of small businesses, as well as the business and operational efficiency improvements necessary for day to day commercial survival. We not only give advice, we go down "into the weeds" to ensure and enable implementation.
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2 Responses to Facebook cracks the monetisation code

  1. Pingback: Graph Search loves friends « Strategyaudit

  2. Pingback: “Graph Search” branding « Strategyaudit

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