Facebook plays 'Big Brother' with real-time targeted ads

Facebook users, watch what you post. Anything you say could be used to target ads at you. Starting this month, the uber social networking site is playing "Big Brother," testing an automated method to deliver ads based on ongoing conversations between users in real time. Although Facebook is not the first company to serve targeted ads —Google has been doing it for years— this is a pioneering attempt to do so on-the-fly in the midst of ongoing conversations. The test is being conducted on about six million users —just one percent of Facebook's 600-million-strong population, according to marketing news site Advertising Age. The article did not mention how the test subjects were selected. AdAge quoted a Facebook spokesman as saying that the test will go on indefinitely, but declined to comment further or discuss the current results. "The long-held promise of local is to deliver timely, relevant and measurable ads which drive actions such as commerce, so if Facebook is moving in this direction, it's brilliant," said Reggie Bradford, CEO of Facebook software and marketing company Vitrue. "This is a massive market shift everyone is pivoting toward, led by services such as Groupon. Facebook has the power of the graph of me and my friends placing them in the position to dominate this medium," he added. To do this, Facebook is using an algorithm that is continuously being adjusted, to see if relevant ads can be served instantly once the user makes a statement that matches an ad in the system. With the system, Facebook users who mention, for example, "pizza" in their status may get an ad or a coupon from a pizza company, according to the AdAge article. But Facebook said the new feature does not so much alter the algorithm than speeding it up, such that ads are served immediately after a status is posted. Such real-time targeting means marketers could tap broad swells of sentiment, much like advertisers are attempting to do through Twitter. The AdAge article also said such a real-time test could largely improve Facebook ads. Some analytics firms claim that the Facebook display ad click-through rate is abysmally low —0.051% in 2010, or about half the industry average, according to Webtrends. On the other hand, EMarketer estimates Facebook sold $1.86 billion in ads in 2010, about 60% or $1.12 billion of which was self-serve, meaning advertisers that buy directly using Facebook's targeting tools. Gmail ads It would not be the first time a major online presence has played "Big Brother." Google's Gmail uses its own automated system that places ads next to Gmail messages. "In Gmail, ads are related to the content of your messages. Our goal is to provide Gmail users with ads that are useful and relevant to their interests," Gmail said. Google said its ad targeting in Gmail is fully automated, "and no humans read your email in order to target advertisements or related information." "This type of automated scanning is how many email services, not just Gmail, provide features like spam filtering and spell checking. Ads are selected for relevance and served by Google computers using the same contextual advertising technology that powers Google's AdSense program," it said. Google added it does not and will never rent, sell or share information that personally identifies a user for marketing purposes "without your express permission." — TJD, GMA News