Tuesday, October 02, 2012
Facebook's consumer information may become more valuable to advertisers than that of other service providers; do not track not so important, but other privacy concerns grow
Geoffrey A. Fowler has a detailed story in the Wall Street Journal, Oct. 2, Marketplace, p. B1, “Facebook sells more access to members”, link here.
Companies may find Facebook data more specifically useful for “target marketing” than they find Google and Twitter, because Facebook tends to have a lot more personal data (as compared to searching or surfing habits). Facebook argues that many clients find that every $1 spent of targeted Facebook advertising results in $3 in product sales. This could be significant for sales managers whose results are compared to quotas and performance measurements; it could matter in multi-level marketing, or even for financial planners or insurance agents pressured to find and sell more business. Personally, I am somewhat familiar with the pressure the latter find, from my own job interviews in the past ten years. (New hires face “fast start” expectations.)
Furthermore, Facebook wouldn’t be affected so much by “do not track” mechanisms, whether built into browsers as defaults (like in IE9) or required by law.
And Facebook’s policy of requiring real legal names and identities could work to its advantage in helping advertisers.
Privacy advocates fear that the use of social media personal information could pose security problems for consumers and perhaps even their insurers and employers, over time.
Users need to realize that it’s advertising and eventual sales that pays for their service. Maybe door-to-door and telemarketing will go away (it really hasn’t), but companies need to be able to reach consumers and sell their products for an economy to work.