mattmaroon.com: How Advertising Works, and Why It Won’t For Facebook
Dane
· 1 year ago
I agree, the current ad revenue model for Facebook and other social networking sites is pretty bogus. Facebook tried to break some new ground with Beacon but failed because it was too invasive. They didn't even think through the major difference between an opt-in and opt-out program. The privacy advocates went on a rampage, and they had to pull the plug. Too bad for them, since Beacon would have been the missing link for the 'focus' issue that you mentioned. Users are on Facebook to see what their friends are doing, so they should be interested to hear about the things their friends are buying.
FriendFeed seems to be fairing well with this model using their social network feeds from sites like Amazon and Netflix, and I suspect this revenue stream will continue to grow for them. The funny part is that there's a Facebook app for FriendFeed.
John
· 1 year ago
"Users are on Facebook to see what their friends are doing, so they should be interested to hear about the things their friends are buying."
Sure - from their friends. From a snooping third party? Not so much. Think about what Facebook is for and why people use it. It won't be long until people start asking of advertisers, "Dude, who let THAT guy into the party?"
Joining Dots
· 1 year ago
Hi Matt, great article
I recently wrote a post covering this from a different angle - http://www.joiningdots.net/blog/2008/04/despera... - Google faces a similar challenge: how to grow beyond what is now their core business. Their ad model works for information-seeking, but social nets are about people-seeking and info-sharing. A different approach is needed, one that will take more effort on the part of advertisers if they want to connect with their target audience.
Mobile access to the Internet will also require a different approach. Even if the ads are relevant (i.e. not including location-specific searches, that make up a larger percentage of search on mobiles), they will take up too much screen space and the majority likely link to sites that are unusable on a mobile phone
Isaac
· 1 year ago
Good argument, and generally agree. Though i haven't spent time thinking this through, what do you think about Facebook beating Google on engagement which could ultimately lead to it being the better branding vehicle? If, as you say, Facebook is where people hangout, spend time, etc., I would think their branding potential will be better as reach continues to grow and their exposure time is greater than Google's.
mattmaroon
· 1 year ago
That's possible. I still think unlikely, because at the end of the day people will still hang out in the real world and fulfill needs online.
Richard
· 1 year ago
I agree in general with your perspective that FB is nowhere near a Google (and likely never to be), but I do think there is likely something pretty powerful in what FB *could* do and I'd not want to bet too much against human ingenuity solving it sooner or later.
I suspect that thousands of developers haven't found it means about as much as the many thousands of developers who had pokey search algorithms before PageRank came along.
FB is a heap and I don't think simply knowing the social graph does much, but there's opportunity there still.
mattmaroon
· 1 year ago
Everyone says this, convinced that it's a potential oil field just because it exists. I just don't get why.
Josiah
· 1 year ago
Isn't the 'focus' of Facebook provided by the content that is entered by you and your friends? Granted, it's not quite my "right now" focus, but if I make a post on FB about the new Ford Focus, and some of my friends comment about it, my friends and I should see ads for the Focus.
Also, if FB can convince it's users to use Facebook search, or something similar to find information (what cars to my friends drive?) than they might have a chance at finding focus.
I think the bar is higher for FB, and the challenges are more complex than Goog's (keyword entered = focus) but if they figure out how to determine focus from all the content people post, they will have solved the problem.
mattmaroon
· 1 year ago
That's not very good though. Go look at your last 10 wall posts and tell me which ads match. It's going to be far less accurate than what you type into Google.
And I think I've already addressed why Facebook Search is a pipedream.
SomeNametoPost
· 1 year ago
I so disagree with you. You've left out 2 very important factors: weight (the value of each of you factors which are very opinionated) and emergence (the ability to see the trend).
The future of advertising is in social network sites. Everyone has been trained to be very specific in google searches, thus the advertising dollars poured into google are having less and less of an impact (ROI) everyday. Take for example the search "new car" in google. This kind of a search returns many car maker ads (Nissan , Ford, everyone) which is great. Instead do a search on "Ford". NOPE...Only Ford. People dont search on "new cars" anymore they start with something like "Ford" then try another type after...because people, over the years have been training to be specific in order to narrow the list of results. If someone looking for "Ford" gets a Ford ad - what the VALUE in that? They are advertising to someone that is already looking for them. Instead FaceBook allows to you more accurately target, via trial and error, specific groups of people who are not already looking for them. FaceBook is new and growing and will begin having more and more of an impact. Only 1 year have I been on FaceBook and I see new adds specific to the groups I subscribe to and in my RSS feeds front and centre.
Sorry, but I don't subscribe to any of your logic.
I'll leave you with this:
"I know half the money I spend on advertising is wasted. Now, if I only knew which half". -John Wanamaker (1838 - 1922)
At least Facebook ads more CLEARLY indicates which ads work and which ones are wasted. Half of the google ads are wasted, and more so everyday.
Pundit
· 1 year ago
The essay is correct - although to laypersons it probably seems counterintuitive. Two objections have sprung up but both are incorrect. Let's examine them one at a time.
The first objection is that social networking will eventually top Google as an ad platform because we use them to talk to our friends about things. There are of course two very real problems with this - if we're receiving ads based on the content of conversation, this is at best equal to receiving ads based on the content of search requests. Except that in practice it will have a much poorer hit rate, because search is fairly specific (I am seeking this out) and conversation is anything but (I mocked the Focus; I needed a rhyme; I told a friend why my car is better than a Focus). Those are all "wasted" dollars.
Much more problematic is the fact that consumers don't seem to want advertisers spying on them. I agree to have Ford try to pitch me when I'm seeking out Ford in a search request. That seems reasonable; after all, I'm already somewhat interested in learning whatever they have to tell me. But I certainly don't want Ford "listening in" on my conversations so it can take a stab in the dark. Facebook has already run into this problem with its Beacon ad system and faced a subscriber revolt over its implementation.
The second objection is the notion that search ads on Google are "wasted" because the consumer is already interested in the product. This falls apart on multiple levels, but we'll just look at two. The most obvious is that Ford is not the only person paying Google to display Focus ads. The majority of sponsored links returned are from regional dealerships and online brokerages. And more intriguingly Toyota advertises its competing Corolla to lure away potential customers!
The second error is in assuming that because I am seeking information on a product that I am ready to buy that product. This is especially true with big ticket items where research and comparison shopping are the norm. Ford needs to sell me on its Focus. Local dealers need to sell me on their price for the Focus. Portals offering reviews need to sell me on those, too.
SomeNametoPost
· 1 year ago
lol.
"The majority of sponsored links returned are from regional dealerships and online brokerages. And more intriguingly Toyota advertises its competing Corolla to lure away potential customers!"
Who cares? It's still wasted relative to finding new "buyers".
"The second error is in assuming that because I am seeking information on a product that I am ready to buy that product."
I didn't ASSuME anything here. I never claimed the searches mean a person is intending to buy. I suggested (relative to new audiences) it's wasted.
Also, the idea that people don't like being forced to see ads not specific to their wants needs .... welcome to reality..... ever been to a movie in the theatre? I see more ads then movie now. Do I feel violated - YES. Does anyone care if I feel violated? NO. Will it continue? YES.... why ? because it works.
Dude, you have good opinions, but that's all they are. And you know what they say about opinions right...
Anyway - time will tell. Until then keep blogging - it's always good to have a theory. :)
mattmaroon
· 1 year ago
How is it wasted for a local ford dealership to advertise to people in its area who Google for "buy Ford Focus"? I mean, I don't run a Ford dealership, but I would think that's pretty ideal.
Also, the person to which you are replying is not me, but I think he's totally correct.
SomeNametoPost
· 1 year ago
I did say "half of the google ads are wasted" - I did not say all.
Simply put. Facebook is not taking "ad"vantage (terrible Joke I know) of it's inherent ability. When they do, I believe they will become successfull.
John
· 1 year ago
So how would you do it? Lay out a scenario.
Pundit
· 1 year ago
You contradict yourself. If I am not committed to buying a Focus, the advertising is not wasted because it can persuade me to do so (hence Toyota counter programming). If I have already decided to buy, the vast majority of ad results are based around actually making the purchase (regional dealers, online brokerages and the like). In either case the ad dollars are more wisely spent with a better likelihood of return than a "hope" that using the words "Ford" and "Focus" in a social network post mean I have any interest whatsoever in learning more about the Ford Focus or where to buy one. You seem to overlook the fact that Ford is not the only advertiser in a search return and the impact of this is not to be underestimated - Google has made $42 billion over the last five years on advertising, because its model works, and works effectively for advertisers. Facebook and its peers are struggling to monetize because their platforms are not remotely as effective for advertising.
Social network advertising is really just poor man's broadcast advertising. The best it can hope for is an enforcement of brand awareness, whereas search advertising can lead directly to a sale. But it gets worse, because "focused" social network advertising can actually repel potential customers in a way search ads never will. Again I refer you to the Beacon debacle, which also puts paid to your assertion that Internet audiences treat the medium as indistinguishable from broadcast or cinema.
Time has already told the tale. News Corp is taking a hit on MySpace after discovering it's a relative failure as an ad platform. Google appears to be reaching the saturation point for its model, but a simple revenue comparison tells us all we need to know. The industry is growing increasingly worried social networks will not prove the ad jackpot some have envisioned, although if you are an "outsider" of course you wouldn't know that. Don't assume all guesses are equal, or that everyone who posts to this blog has access to the same information.
Meanwhile, the next time I ignore a Google search ad return at least I know it will have some bearing on my actual point of interest. Whereas if I ignore a hypothetical "conversation scan" ad display based on the content of this post I could get anything from a Ford Focus ad to a plea to buy "The Outsiders" on DVD to a shill for the Beacon restaurant in New York City - none of which have any bearing on the real point of this discussion.
I'm sure you can see the problem.
SomeNametoPost
· 1 year ago
Well, I don't believe Im contradicting myself.
1. I didn't say ALL google ads were "wasted".
2. I have been suggesting "wasted" from a relative perspective not an independant perspective. ie. Is your one dollar better spent targeting a specific demographic or better spent on a generic search engine? If you believe the first then the latter is a "wasted" dollar, relatively, not completely and indpendantly. I say this because I think google uses a brute force model and many adveristing dollars are thus wasted (relatively). I do beleive this has been expressed in my earlier posts.
3. If you go back and read, you'll notice my comments are also relative to "The future of advertising is in social network sites"....not based upon todays advertising earned dollars.
John
· 1 year ago
"Is your one dollar better spent targeting a specific demographic or better spent on a generic search engine?"
There isn't a more specific demographic than people who type your product into a search engine. The alternative is basic brand advertising and a proprietary social network is just never going to compete with broadcast.
mattmaroon
· 1 year ago
Totally agree with all of this.
mattmaroon
· 1 year ago
The market says thatâs untrue, at least currently. It proves I'm correct for now. Otherwise Facebooks (and MySpaces) effective CPM wouldnât be some tiny fraction of Google's.
Jesse Farmer
· 1 year ago
Matt,
That's not really how "advertising" works, that's only how search advertising works. As you point out right in your article, the paradigms for print, TV, and radio are totally different.
The key thing to understand about advertising is that ad-supported businesses are part of a two-sided market. I wrote an article about Web 2.0 and Two-sided Markets that has a diagram illustrating the principle.
Basically ad-supported companies work by reselling attention to advertisers at a price that is higher than what it cost them to acquire it.
The reason ads won't work on Facebook is not because there's no "intent." There's no intent on TV, either, or on large branded websites, but they still pull in CPMs two orders of magnitude than what you can expect to earn on Facebook.
Rather, they don't work because of the sort of attention Facebook gets. You're right that's it all about staying in touch and communicating with friends. The consequence of this is that people are paying attention to other people, not to the ads floating around their page.
The engagement point is the person, not the page.
- Jesse
Pundit
· 1 year ago
"You're right that's it all about staying in touch and communicating with friends. The consequence of this is that people are paying attention to other people, not to the ads floating around their page."
Another excellent point.
Anders Conbere
· 1 year ago
This also neglects to understand the complex dynamics of advertising. If a user searches for “buy Ford Focus” in google, what has google done here for ford? In fact a user has already been sold on buying a Focus, which means that somewhere down the line the user was likely compelled to believe that they wanted a Ford Focus from somewhere else.
The big question in online advertising today is not, Social Networks versus Search advertising, it's figuring out what the grander scope of a persons advertising history is. Today's market only recognizes a single source as bringing in a customer. In this world Google (or search advertising in general) ALWAYS wins, it's the link between a users previous advertising history and the content/store/site they want to get to to buy that product.
This unfortunantly is NOT how advertising works, there is a huge body of history in that user. They've seen TV ads, print ads, adds on facebook, recommendations from friends, consumer reports articles, etc. Last click wins denies this history, the people who are going to win in this market are those that enable companies like Ford to discover a users history of interaction with the companies advertising and get real numbers about what caused them to search for that product in the first place.
SomeNametoPost
· 1 year ago
Agreed!
mattmaroon
· 1 year ago
That particular search doesnât do much for Ford, but it does a lot for local Ford dealerships. Google for that and thatâs what you see.
Ford might do a better job advertising on keywords that are competitive. Google for Chevy Cobalt (I'm just guessing that's a competitor since I know little about American cars) and that might be a great opportunity.
Anders Conbere
· 1 year ago
But if you look at the research, /that/ kind of advertising doesn't end up being particularly effective. Nowhere near as effective as recommendation based ads, associative advertising or brand affinity.
I'm not denying that Google has some massive advertising might, and that it's very effective at linking users to places to buy products. I'm simply arguing that our current methods of measuring the effectiveness of advertising give enormous bias to search providers because of the prevalence of last click wins.
John
· 1 year ago
I think we can assume that marketers know their business better than we do, and the simple fact is that they find search a far more compelling proposition than social networks. What do you know that an entire industry doesn't?
Pundit
· 1 year ago
"This also neglects to understand the complex dynamics of advertising. If a user searches for “buy Ford Focus” in google, what has google done here for ford?"
You can test this yourself. Type "buy Ford Focus" into Google and examine what the sponsored links. I just did it and Ford is only one of 11 advertisers to pay for ad space tied to that request.
James
· 1 year ago
facebook + MSN live search = social + intent
mattmaroon
· 1 year ago
Who uses msn? Its just too easy to open a new tab and google search for that to be relevant.
Evan Hamilton
· 1 year ago
Great post. I largely agree, though I also think that Facebook has been smart enough thus far that they won't only stick to their current focus. They'll find new ways to innovate while MySpace will continue to make a mint exploiting their community until it's gone.
It does surprise me that Facebook hasn't gotten smarter with "social graph"-based advertising. I frequently see ads on Facebook for same-sex dating sites. I am (and have set on my Facebook profile) heterosexual and in a relationship. These ads don't offend me, but why am I seeing them? That is a truly wasted ad.
I think what Facebook *could* have over Google is a sense of what is most important to a person. Google knows what you want RIGHT NOW, but Facebook *should* be able to figure out is what I like most. If I have listed Wilco in my musical interests, I become a fan of Wilco's Facebook Page, and my last.fm app lists Wilco as a frequent play, they should show me ads for Wilco stuff! This seems rather straightforward...if they just pay attention to what I like MOST, they will get my attention.
John
· 1 year ago
"If I have listed Wilco in my musical interests, I become a fan of Wilco's Facebook Page, and my last.fm app lists Wilco as a frequent play, they should show me ads for Wilco stuff!"
On the other hand, all of those factors mark you out as someone who is already going to buy Wilco stuff anyway - and most likely someone who is already clued in to what's coming out and where to find it. It's back to the equivalent of a search ad, and changes are (just based on sheer numbers) that Wilco dollar is more effectively spent on Wilco search results than a social network display.
Evan Hamilton
· 1 year ago
Fair enough, John. But what if they showed me bands like Wilco that I might like, and pointed me to their Facebook page where I could hear songs, buy music, and make myself a fan? That is using the network, not just using my graph to point me to a store..
mattmaroon
· 1 year ago
Doesnt myspace sorta do this? I mean, wilcos myspace friends might be other bands. It hasnt netted them any decent cpms.
Brent
· 1 year ago
Succinct, intelligent and eloquent. I could not agree with you more.
bubu
· 1 year ago
恩,我真希望我的英文能足够好到能看懂你的文章
Robert Einspruch
· 1 year ago
Based on my experience advertising my online tutoring platform, ziizoo.com, the following quote is 100% accurate.
"But I think reality is slowly setting in. Because what we’re finding is that when people want something specific, they go to Google. When they want to kill time or just communicate with friends, they go to Facebook. And that isn’t changing."
When someone needs help in math, they search Google. Even though that same person may have seen my ad on Facebook, they don't react to it. They are simply in a different mindset. That may change over time, but right Matt is right.
All Comments
FriendFeed seems to be fairing well with this model using their social network feeds from sites like Amazon and Netflix, and I suspect this revenue stream will continue to grow for them. The funny part is that there's a Facebook app for FriendFeed.
Sure - from their friends. From a snooping third party? Not so much. Think about what Facebook is for and why people use it. It won't be long until people start asking of advertisers, "Dude, who let THAT guy into the party?"
I recently wrote a post covering this from a different angle - http://www.joiningdots.net/blog/2008/04/despera... - Google faces a similar challenge: how to grow beyond what is now their core business. Their ad model works for information-seeking, but social nets are about people-seeking and info-sharing. A different approach is needed, one that will take more effort on the part of advertisers if they want to connect with their target audience.
Mobile access to the Internet will also require a different approach. Even if the ads are relevant (i.e. not including location-specific searches, that make up a larger percentage of search on mobiles), they will take up too much screen space and the majority likely link to sites that are unusable on a mobile phone
I suspect that thousands of developers haven't found it means about as much as the many thousands of developers who had pokey search algorithms before PageRank came along.
FB is a heap and I don't think simply knowing the social graph does much, but there's opportunity there still.
Also, if FB can convince it's users to use Facebook search, or something similar to find information (what cars to my friends drive?) than they might have a chance at finding focus.
I think the bar is higher for FB, and the challenges are more complex than Goog's (keyword entered = focus) but if they figure out how to determine focus from all the content people post, they will have solved the problem.
And I think I've already addressed why Facebook Search is a pipedream.
The future of advertising is in social network sites. Everyone has been trained to be very specific in google searches, thus the advertising dollars poured into google are having less and less of an impact (ROI) everyday. Take for example the search "new car" in google. This kind of a search returns many car maker ads (Nissan , Ford, everyone) which is great. Instead do a search on "Ford". NOPE...Only Ford. People dont search on "new cars" anymore they start with something like "Ford" then try another type after...because people, over the years have been training to be specific in order to narrow the list of results. If someone looking for "Ford" gets a Ford ad - what the VALUE in that? They are advertising to someone that is already looking for them. Instead FaceBook allows to you more accurately target, via trial and error, specific groups of people who are not already looking for them. FaceBook is new and growing and will begin having more and more of an impact. Only 1 year have I been on FaceBook and I see new adds specific to the groups I subscribe to and in my RSS feeds front and centre.
Sorry, but I don't subscribe to any of your logic.
I'll leave you with this:
"I know half the money I spend on advertising is wasted. Now, if I only knew which half".
-John Wanamaker (1838 - 1922)
At least Facebook ads more CLEARLY indicates which ads work and which ones are wasted. Half of the google ads are wasted, and more so everyday.
The first objection is that social networking will eventually top Google as an ad platform because we use them to talk to our friends about things. There are of course two very real problems with this - if we're receiving ads based on the content of conversation, this is at best equal to receiving ads based on the content of search requests. Except that in practice it will have a much poorer hit rate, because search is fairly specific (I am seeking this out) and conversation is anything but (I mocked the Focus; I needed a rhyme; I told a friend why my car is better than a Focus). Those are all "wasted" dollars.
Much more problematic is the fact that consumers don't seem to want advertisers spying on them. I agree to have Ford try to pitch me when I'm seeking out Ford in a search request. That seems reasonable; after all, I'm already somewhat interested in learning whatever they have to tell me. But I certainly don't want Ford "listening in" on my conversations so it can take a stab in the dark. Facebook has already run into this problem with its Beacon ad system and faced a subscriber revolt over its implementation.
The second objection is the notion that search ads on Google are "wasted" because the consumer is already interested in the product. This falls apart on multiple levels, but we'll just look at two. The most obvious is that Ford is not the only person paying Google to display Focus ads. The majority of sponsored links returned are from regional dealerships and online brokerages. And more intriguingly Toyota advertises its competing Corolla to lure away potential customers!
The second error is in assuming that because I am seeking information on a product that I am ready to buy that product. This is especially true with big ticket items where research and comparison shopping are the norm. Ford needs to sell me on its Focus. Local dealers need to sell me on their price for the Focus. Portals offering reviews need to sell me on those, too.
"The majority of sponsored links returned are from regional dealerships and online brokerages. And more intriguingly Toyota advertises its competing Corolla to lure away potential customers!"
Who cares? It's still wasted relative to finding new "buyers".
"The second error is in assuming that because I am seeking information on a product that I am ready to buy that product."
I didn't ASSuME anything here. I never claimed the searches mean a person is intending to buy. I suggested (relative to new audiences) it's wasted.
Also, the idea that people don't like being forced to see ads not specific to their wants needs .... welcome to reality..... ever been to a movie in the theatre? I see more ads then movie now. Do I feel violated - YES. Does anyone care if I feel violated? NO. Will it continue? YES.... why ? because it works.
Dude, you have good opinions, but that's all they are. And you know what they say about opinions right...
Anyway - time will tell. Until then keep blogging - it's always good to have a theory.
:)
Also, the person to which you are replying is not me, but I think he's totally correct.
Simply put. Facebook is not taking "ad"vantage (terrible Joke I know) of it's inherent ability. When they do, I believe they will become successfull.
Social network advertising is really just poor man's broadcast advertising. The best it can hope for is an enforcement of brand awareness, whereas search advertising can lead directly to a sale. But it gets worse, because "focused" social network advertising can actually repel potential customers in a way search ads never will. Again I refer you to the Beacon debacle, which also puts paid to your assertion that Internet audiences treat the medium as indistinguishable from broadcast or cinema.
Time has already told the tale. News Corp is taking a hit on MySpace after discovering it's a relative failure as an ad platform. Google appears to be reaching the saturation point for its model, but a simple revenue comparison tells us all we need to know. The industry is growing increasingly worried social networks will not prove the ad jackpot some have envisioned, although if you are an "outsider" of course you wouldn't know that. Don't assume all guesses are equal, or that everyone who posts to this blog has access to the same information.
Meanwhile, the next time I ignore a Google search ad return at least I know it will have some bearing on my actual point of interest. Whereas if I ignore a hypothetical "conversation scan" ad display based on the content of this post I could get anything from a Ford Focus ad to a plea to buy "The Outsiders" on DVD to a shill for the Beacon restaurant in New York City - none of which have any bearing on the real point of this discussion.
I'm sure you can see the problem.
1. I didn't say ALL google ads were "wasted".
2. I have been suggesting "wasted" from a relative perspective not an independant perspective. ie. Is your one dollar better spent targeting a specific demographic or better spent on a generic search engine? If you believe the first then the latter is a "wasted" dollar, relatively, not completely and indpendantly. I say this because I think google uses a brute force model and many adveristing dollars are thus wasted (relatively). I do beleive this has been expressed in my earlier posts.
3. If you go back and read, you'll notice my comments are also relative to "The future of advertising is in social network sites"....not based upon todays advertising earned dollars.
There isn't a more specific demographic than people who type your product into a search engine. The alternative is basic brand advertising and a proprietary social network is just never going to compete with broadcast.
That's not really how "advertising" works, that's only how search advertising works. As you point out right in your article, the paradigms for print, TV, and radio are totally different.
The key thing to understand about advertising is that ad-supported businesses are part of a two-sided market. I wrote an article about Web 2.0 and Two-sided Markets that has a diagram illustrating the principle.
Basically ad-supported companies work by reselling attention to advertisers at a price that is higher than what it cost them to acquire it.
The reason ads won't work on Facebook is not because there's no "intent." There's no intent on TV, either, or on large branded websites, but they still pull in CPMs two orders of magnitude than what you can expect to earn on Facebook.
Rather, they don't work because of the sort of attention Facebook gets. You're right that's it all about staying in touch and communicating with friends. The consequence of this is that people are paying attention to other people, not to the ads floating around their page.
The engagement point is the person, not the page.
- Jesse
Another excellent point.
The big question in online advertising today is not, Social Networks versus Search advertising, it's figuring out what the grander scope of a persons advertising history is. Today's market only recognizes a single source as bringing in a customer. In this world Google (or search advertising in general) ALWAYS wins, it's the link between a users previous advertising history and the content/store/site they want to get to to buy that product.
This unfortunantly is NOT how advertising works, there is a huge body of history in that user. They've seen TV ads, print ads, adds on facebook, recommendations from friends, consumer reports articles, etc. Last click wins denies this history, the people who are going to win in this market are those that enable companies like Ford to discover a users history of interaction with the companies advertising and get real numbers about what caused them to search for that product in the first place.
Ford might do a better job advertising on keywords that are competitive. Google for Chevy Cobalt (I'm just guessing that's a competitor since I know little about American cars) and that might be a great opportunity.
I'm not denying that Google has some massive advertising might, and that it's very effective at linking users to places to buy products. I'm simply arguing that our current methods of measuring the effectiveness of advertising give enormous bias to search providers because of the prevalence of last click wins.
You can test this yourself. Type "buy Ford Focus" into Google and examine what the sponsored links. I just did it and Ford is only one of 11 advertisers to pay for ad space tied to that request.
It does surprise me that Facebook hasn't gotten smarter with "social graph"-based advertising. I frequently see ads on Facebook for same-sex dating sites. I am (and have set on my Facebook profile) heterosexual and in a relationship. These ads don't offend me, but why am I seeing them? That is a truly wasted ad.
I think what Facebook *could* have over Google is a sense of what is most important to a person. Google knows what you want RIGHT NOW, but Facebook *should* be able to figure out is what I like most. If I have listed Wilco in my musical interests, I become a fan of Wilco's Facebook Page, and my last.fm app lists Wilco as a frequent play, they should show me ads for Wilco stuff! This seems rather straightforward...if they just pay attention to what I like MOST, they will get my attention.
On the other hand, all of those factors mark you out as someone who is already going to buy Wilco stuff anyway - and most likely someone who is already clued in to what's coming out and where to find it. It's back to the equivalent of a search ad, and changes are (just based on sheer numbers) that Wilco dollar is more effectively spent on Wilco search results than a social network display.
"But I think reality is slowly setting in. Because what we’re finding is that when people want something specific, they go to Google. When they want to kill time or just communicate with friends, they go to Facebook. And that isn’t changing."
When someone needs help in math, they search Google. Even though that same person may have seen my ad on Facebook, they don't react to it. They are simply in a different mindset. That may change over time, but right Matt is right.