Facebook’s new ad system

Facebook looks at Google AdWords in an attempt to produce profits that reflect its huge user base and rapid growth.

The social network...

Facebook looks at Google AdWords in an attempt to produce profits that reflect its huge user base and rapid growth.

The social network is expanding its advertising system, offering marketers access to a wider array of users’ posted information so they can better target their market, The Wall Street Journal reports.

Currently, advertisers can target users based on limited information (age, gender, and location) through banner ads and boxed flyers.
Facebook already uses…a rudimentary system that allows advertisers to go online, and starting at $10, buy simple "flyers" that run as boxed ads on the left-hand border of Facebook pages.


In the new system, allegedly to be launched later this fall, advertisers can visit a Web site to choose from characteristics in users’ personal information, and ads will show up on the "news feed" and other various pages. According to WSJ, Facebook hopes to eventually update the system to monitor how receptive people are toward an ad based not only on a user's personal information, but also on a user's friends.
Facebook's plan, if it works, could be potentially powerful for advertisers. While Google's keyword-targeted ads aim at "demand fulfillment" -- that is, they are triggered by Internet searches conducted by people who are actively looking for something that they want -- Facebook's new ad plan could help advertisers address an area called "demand generation." This involves using available information -- not just from a user but also the activities and interests of his "friends" on the site -- to figure out what people might want before they've specifically mentioned it.

The new system could spark controversy among users and upset Microsoft, with whom Facebook expects to generate half its revenue this year in a deal that enables Microsoft to sell many of the major display ads on Facebook’s US site.

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