Facebook to Face Facts?: The Monetization of Eyeballs

Facebook has the greatest blessing and curse of a Web 2.0 company - a skyrocketing and captured community of eyeballs but no strategy to monetize it. While there is no clear answer, I strongly believe there are some critical signposts that might lead us in the right direction to understand how Facebook can monetize its constituency.

It took Google several years of providing a revolutionary search service and gaining a monumental following before it created AdWords which resulted in $10Bn per year revenue. Facebook has been striving for a similarly suitable model but has been wasting time with traditional banner ads that undermine its next-gen potential, until now. The next evolutionary step of a more dynamic ad-based system known at Engagement Ads (engagement marketing) is a unique convergence of social networking, advertising & market research. The purpose of these ads is to use video, polls and other interactive media to direct visitors to a specific Facebook Page.

The Engagement Ads are successful on a limited scale as they can bring in revenue from the SMB market but have not been able to bring in the large corporate advertisers which are critical.
Another aspect of the Engagement Ad is that it can involve polls used for market research which differ greatly from intrusive phone calls & questionnaires. These polls are:
  • completely optional
  • tapped into the social network paradigm
  • interactive - allowing user to help develop the brand
  • highly targeted to user demographics
  • can be completed at user's leisure
And they exist without the awkward phone call! The results gleaned are pure gold for marketing companies who will theoretically pay huge $$$ to Facebook to harvest this crucial data. This is the first significant step towards a monetization strategy and it reflects a forward thinking mindset for Facebook management. This type of media and paradigm convergence (much like Google splicing marketing, data indexing & websurfing into AdWords) is what we need to see happen and Engagement Ads is the first step.


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