Why 44 Companies Are Saying '"HELL YES!" To Facebook's Controversial (And Some Say Creepy) Advertising Platform

11 years ago

When Facebook unveiled "Beacon", its new advertising platform earlier this month, it unleashed a simultaneous bi-polar reaction. From privacy advocates, there was outrage and concern.

From advertisers, on the other hand,  the introduction of Beacon was as if Facebook had just handed them the keys to El Dorado.

Laura Scott wrote a comprehensive post called Facebook's New Ads: If You're a Good Person, Why Should You Want Privacy? that delves into the privacy concerns.

While the blogosphere is bursting with Beacon critics, major corporations--44 in all so far--have signed up to be part of Beacon including eBay,Coca Cola, New York Times, Blockbuster, Amazon, Bluefly.com, CBS Interactive (CBSSports.com & Dotspotter), ExpoTV, Gamefly, Hotwire, Joost, Kiva, Kongregate, LiveJournal, Live Nation, Mercantila, National Basketball Association,  Overstock.com, (RED), Redlight, SeamlessWeb, Sony Online Entertainment LLC, Sony Pictures, STA Travel, The Knot, TripAdvisor, Travel Ticker, TypePad, viagogo, Vox, Yelp, WeddingChannel.com and Zappos.com.

At its best, Beacon represents a new breed of designer marketing that is being dubbed "social advertising. Think extreme target marketing meets word-of-mouth marketing.

From the CBC:

If you buy a book on Amazon, a little bit of code is embedded within that site then sends the data to Facebook and informs your friends that you've bought a particular book. Or say you're surfing the recipe/food site Epicurious and rate or comment on a few recipes, again your Facebook friends will be notified of your culinary interests, as will Facebook itself and their advertising partners. Thus where Facebook used to be collecting data only within the confines of its own website, it will now extend that ability to harvest data across other websites that it partners with.

It is what the CBC calls an advertiser's treasure trove. While American consumers may say they (a) don't pay attention to advertising (b) are not influenced by advertising (c) find advertising to be a deceitful, distasteful industry,consumer behavior says something else entirely.

As a society, Americans embrace advertising and they love targeted marketing particularly when the targeting results in loyalty programs that offer perks and benefits like frequent flier miles.

Businesses know that if you target correctly and reward proficiently that consumers will respond with a loyalty that is amazing.

Before American Airlines introduced the idea of frequent flier points in 1981 people made their airline decisions based on the time a carrier would get them to their destination. People had a window of tolerance of about 30 minutes.

After frequent fliers points were introduced, people's behavior changed dramatically. Instead of asking which airlines could get them to SEA TAC at 1:00 p.m., people asked what flights the airline had in the afternoon. As long as the flight came within 3-4 hours, people would book the flight.

From a 30 minute window to 3-4 hours. That was a huge shift for the airlines.

But its not just the targeted marketing that makes advertisers salivate.Facebook's Beacon has a word of mouth component that is sheer advertising nirvana. While advertising is an industry consumers love to hate, those same consumers say that having a friend recommend a product is different. For advertisers, personal endorsements---word of mouth marketing --is the creme de la creme of advertising strategies.

Writing about Beacon for E-Commerce News,Katherine Noyes quotes eBay's senior vice president and chief marketing officer for eBay North America,Gary Briggs.

"Beacon offers an interesting new way for us to deliver on our goal of bringing more bidders and buyers to our sellers' listings," said Gary Briggs, senior vice president and chief marketing officer for eBay North America. "In a marketplace where trust and reputation are crucial to success, giving sellers the ability to easily alert their network of friends -- the people who already know and trust them -- to an item for sale has the potential to be a powerful tool."

In a post called Facebook Ads: 'Not Really Creepy as Much as Inevitable', blogger Ann All shares consumer reactions to Facebook's social advertising strategy.

Some excerpts of reader comments:

* “Not really creepy as much as inevitable.”
* “I actually feel kind of special. To be honest, I never click ads, and I clicked this one, and I’m pretty satisfied. On a more generalized scope though, of course it’s a little disturbing, but we caused it. “
* “In a way it’s good, because I’m seeing advertisements about things I already like and don’t have to ignore another flashing auto insurance banner.”
* “‘Capitalism is capitalism’ has never been an effective argument for letting people exploit others or do things that are clearly harmful to society.”

While Facebook's advertising strategy may not offend many on a conceptual basis, their lack of transparency is offending even their most ardent supporters including Charlene Li who writes Groundswell for Forrester. Li was surprised to find that a coffee table bought on Overstock.com appeared on her newsfeed.

The biggest problem is the lack of transparency. Facebook is right in that I would really like to have some things that I do on third party sites to conveniently appear in newsfeed, e.g. events I'm attending from Evite or eBay/craigslist listings so that my friends know about them. That's the promise of Beacon. But I need to be in control and not get blindsided as I did in the example above. I was seriously wigged out, but wouldn't have been if Overstock had simply told me that they were inserting a Facebook Beacon and given me the opportunity at that time to opt-in to Beacon. And this is the problem for Facebook -- they aren't in control of what their Beacon partners do to notify people that this is happening. Facebook can only control this from their own interface, when the information has already been transmitted between sites, and without my explicit permission. There's a fine line that gets crossed when behavior data slips from being a convenience to being Big Brother. This is one of those times. Give me back my control by letting me opt-in (not opt-out as is currently the case), or I'm installing the Beacon Blocker.

Described as uber creepy by some and an in your face violation of privacy by others,here's how Bloggingstocks explains Facebook's version of social advertising.

Beacon goes beyond serving up targeted ads -- it takes my purchase
information from participating advertisers and broadcasts it
endorsement-style to all my Facebook friends, as well as any others in
my network who, for whatever illness or boredom, feel like probing my
Facebook essence. Facebook's advertisers page says such ads "act as a word-of-mouth promotion." The idea is that my friends would be sooo enamored
of my consumer choices that they would trod off cash in hand to the
exact same vendor (now there's an absurd ad waiting to happen -- "Barry
bought a round lot of Intuitive Surgical through E*Trade -- Won't you
make the switch today?"). We all get the concept, but I'd
rather choose when to actually use my word of mouth to let my friends
know, or more crucial, to keep stumm if I'm renting something randy Steel Magnolias from Blockbuster (NYSE: BBI). Facebook users can tweak their privacy settings to opt out of the Beacon promos, but you have to do it site by site, and you must renew your decline every week (this is according to an instructional movie at MoveOn.org
-- I haven't run into the Beacon service yet because I don't do much
online shopping). It's likely that difficult to opt out because
Facebook and Beacon advertisers know how averse folks would be to opt
in. Users get nothing out of this, mind you. I'd become a de
facto pitchman for whatever service chooses to betray my patronage,
with no compensation: no store credit, no discount, nothing.

In the meantime Moveon.org has created a Facebook "protest group"( on Facebook) encouraging Facebook to allow people to opt-in rather than opt-out.

So far the retailers are standing with Facebook. As Caroline McCarthy of the social reports,

Some retailers participating in Beacon say they're familiar with its potential pratfalls, but insist that it will ultimately be a positive development. "I think it's a new technology, and until people get used to it, it might surprise some," said Josh Mohrer, director of retail for BustedTees.com. "We have had a few instances where people were surprised, not necessarily angry, but surprised that their purchase showed up on their Facebook feed...I think when it becomes ubiquitous, which it most certainly will as Facebook things tend to be, that people will get used to it and see it as a good thing." Mohrer said that he saw where the complaints were coming from. "I think Facebook probably needs to do a better job of warning people about it," he said. "What's bad is that people are probably going to blame the merchant and not Facebook." Additionally, Mohrer admitted that he doesn't entirely disagree with the concerns of activists who have pointed out potential privacy issues with Beacon. "You should have an option to turn it on," Mohrer added, "not the other way around, especially around this time of year."


This is as they say in the news business, a story with legs. Lots of moving components.Complex. Live Altering. A Big Story.

To Be continued.

Elana blogs about business culture at FunnyBusiness

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