Facebook ad trial risks new privacy fears
By Richard Waters, FT.com
March 27, 2013 -- Updated 1002 GMT (1802 HKT)
Facebook's planned "retargeting" adverts will
appear in users' newsfeeds and risk being seen as too intrusive by users.
(Financial Times) -- Watch this space: advisers say that
businesses will do themselves few favours if they cut staff off from using
consumer tools such as Twitter, Facebook or LinkedIn
Facebook is testing adverts in its members' newsfeeds
that are tied to their behaviour on other websites, bringing one of the web's
most effective forms of advertising into the heart of its social network.
The experiment could turn into one of the company's most
profitable forms of advertising, though it also risks stirring up fresh privacy
concerns if users find it intrusive, according to analysts.
The move, announced in a blogpost on Tuesday, marks
Facebook's latest attempt to find new ways for advertisers to tap the largest
online audience. The approach, known as "retargeting", is based on a
formula that has proved effective on the web, though it does little to draw on
the social relevance that Facebook has long said sets its service apart.
Using retargeting, advertisers can place their messages
in front of internet users based on what they have done on other websites. A
user who researches a holiday or a car online, for instance, may find adverts
for those things appearing on other, unconnected websites.
Facebook first trialled retargeting in mid-2012, shortly
after its tumultuous IPO led it to redouble efforts to boost its advertising
revenue. At the time, it limited the ads to the right side of its pages.
On Tuesday, the company said it had begun a global test
that put retargeted ads between the posts in its users' newsfeeds, considered
the prime location on the social network. The news feed accounts for about 40
per cent of Facebook users' attention and adverts placed there are estimated to
be eight times more effective than those on the right side of the page.
Putting retargeted ads inside the feed where users are
engaging most directly with friends and family members could backfire, said
Rebecca Lieb, an analyst at Altimeter Group. Adverts that appeared to follow
users around the web risked being seen as "creepy", an effect that
might be accentuated when they appeared in such a personal place on the page,
she added.
To soften the impact of advertising in the news feed,
Facebook has previously used approaches that draw on social context. Using a
format called "sponsored stories", for instance, advertisers have
been able to buy space in a user's feed when one of their friends has visited
the advertiser's page or engaged with it in some other way.
Showing retargeted ads without this type of social
context risks making the social network feel increasingly "spammy",
said Richard Greenfield, an analyst at BTIG Research.
Facebook said that the commercial messages, which will be
delivered through the online exchange it set up last year, "will create
more relevant ads for people". It added that the new type of advertising
would not increase the overall number of ads that it places in users' newsfeeds.
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