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tHE OPEN GRAPH: Facebook extends its network with new social services

A new service looks set to transform Facebook from being a simple social networking website into the hub of an entire online ecosystem. Any web page can now easily become a part of Facebook’s extensive record of who we are, what we do, and what we are interested in. With over 400 million users across the world (and over 24 million registered users in the UK alone), even minor changes to Facebook can have significant reverberations around the internet. But the Open Graph service unveiled last week looks set to cement Facebook’s dominance of the Social Web, and put them in an untouchable position of control over its users’ online identities. In this edition of EMERGING SPACES: PuLSE, we look at the implications that this new service will have for advertisers, website owners, and the future of the Social Web.

EMERGING SPACES: PuLSE

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Scott Thompson Senior Digital Research Executive Scott.Thompson@smvgroup.co.uk

Any page on the internet can now have the functionality of a Facebook fan page Any website can pull information from visitors’ Facebook profiles about themselves and their friends and use it to provide personalized content More personal information will be stored by Facebook about its users

EMERGING SPACES PuLSE: Facebook extends its network with new social services

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A BILLION N ‘LIKE’ B ButtONS S ACROSS tHE t wEB… … The T Open Graph allows a website ow wners to use Social Plugins on the eir website. w These are small pieces off code which website owners can add a to their pages, allowing them to integ grate their sites with w Facebook’s unctionality. fu A “LIKE ButtON N”— similar to tho ose on Facebook’s Fan pages or Engagement E Ads— — can be added to any web page.. Clicking these will w add this “like” to the users’ profile, and share the link witth their friends on n Facebook F through h their News Feed ds.

An “ACtIvItY St A tREAM” plugin diisplays a filtered version of users’ F Facebook’s News s Feeds on other websites, w contain ning updates thatt relate t recent “liking” activity to a on the sitte they are visiting g. So similar to th he R Recommendation ns plugin, but tailo ored more toward ds busier sites wiith more f frequent activity. The most obvious T s implementation n of these kinds of services might be b for a n news website or blog b to direct use ers towards pages s that have alread dy p proved popular. But B there are also opportunities for commercial site es to e enable visitors to guide their friend ds to their favourite items. We see e this b being especially powerful p in areas where certain friends might be p particularly influential— for examp ple, a user might s see that a techno ologylo oving friend has “liked” “ something g on a mobile pho one website they have n visited before not e, influencing their opinion of that p particular brand. Further functionality will be availab F ble to website ow wners through an A Applications Prog gramming Interfac ce (API.) If a userr logs in to a 3rd party w website via their Facebook F profile,, that site can acc cess any informattion the u user has made pu ublic— for examp ple, about their fav vourite food or ba ands t they have “liked”— — and can use th hat information when giving the us ser in nformation or rec commendations.

To T see another exxample of this in a action, visit IMDB B.com where every film, TV T programme, ac ctor and director already has a “lik ke” button. Facebook’s F 25 year old CEO Mark Zuckerberg estim mated that there would be b a billion “like” buttons b across th he web within 24 hours— and we think t that this is just the e beginning. A “RECOMMENDA AtIONS” plugin w will give personaliised recommendations fo or friends and pages, enabling we ebsite owners to provide p a “most liiked” list fo or their site (similar to the “most rread” or “most em mailed” lists often n seen on o news sites and d blogs.) This wou uld be tailored according to the vis sitors’ own o social connec ctions, showing the user any of their friends who have “liked” items on th hat site.

So, a user of an on S nline music servic ce like Spotify can share informatiion a about their listeniing tastes with Fa acebook. When th hat user then visits a another website that t sells concertt tickets, the inforrmation Facebook k has s stored about their music tastes co ould be used to prrovide recommen ndations f concerts and venues. for v

… …But NO O MORE FACEBOOK F K FANS Along with the ne A ew features, Faceb book have chang ged the language used o buttons on Fac on cebook Pages an nd Engagement A Ad units from “bec come a f fan” to “like”, to ke eep consistency across websites. Although Facebo ook a assure us that use ers will be able to o differentiate bettween the “likes” that s share information n about that single action and the “likes” which sub bscribe t a Facebook Page’s updates, it is to s not clear that th his difference will be o obvious to users, and we expect to o see some confu usion around this area.

EMERGING E SPACES PuLSE: Facebook exttends its netwo ork with new social s services

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SIMPLICItY IS tHE KEY tO SuCCESS The fact that these services are simple for Facebook’s members to use and simple for website owners to implement leads us to expect a strong take up of the new services. While Facebook Connect already enables websites to link in with Facebook, it requires the user to log in with their Facebook username and password before taking any ‘social actions.’ So although the Facebook Connect technology will remain, its functionality will overlap with the new Open Graph and the “Connect” branding will no longer exist.

BEttER tARGEtING FOR ADvERtISERS Facebook’s mission might be “to give people the power to share and make the world more open and connected”– but its business is still in selling advertising. So it’s perhaps a little odd that so little has been mentioned about how the Open Graph plays into its advertising business. The immediately visible consequence will be in targeted advertising on Facebook itself. Advertisers can already use Facebook to target users by their demographic information submitted on their profile, and the ability for users to “like” things so easily on web pages beyond Facebook’s own is set to make this an even richer database of users’ declared interests.

SMG At tHE FOREFRONt Along with the new systems for website developers, Facebook have also introduced a new system for advertisers, allowing agencies to manage campaigns at scale. At Starcom MediaVest Group, we are amongst the first agencies to be using this new tool, and we are in the process of rolling this out across our clients. This will not only allow for more efficient bidding and creative optimisation, but will also improve the reporting capabilities on interactions with Facebook’s display ads, enabling real-time optimisation of CPM costs, weighting advertising spend to the more responsive audience segments.

PRIvACY CONCERNS AS PuBLIC INFORMAtION BECOMES MORE PuBLIC Although the Open Graph only shares information which the user has made public, we expect that some users will have concerns about the privacy implications. The changes will make it easier for users to share, and for companies to access ‘personal’ data. In short, public information shared on Facebook becomes more public. Not just public on Facebook itself, but public on any website that connects to the Facebook ecosystem. It takes a considerable amount of effort to follow and to understand Facebook’s changing privacy settings and features, and our chief concern is that the average user who isn’t familiar with the technology of 3rd party cookies, iFrames and APIs will almost certainly not understand the wider implications of the Open Graph. One consumer trend that this gives rise to is the idea of personal privacy being exchanged for a richer public profile, whether through a deliberate decision or simply apathy or inaction. So whether the type of information that users don’t necessarily intend to make public will end up being widely shared– and whether those kinds of mistakes will be seen to be the responsibility of the user, or of Facebook— remains to be seen. Facebook will need to take care to be transparent about the implications of their changes to avoid a similar user backlash to that seen when they unveiled “Beacon” in 2007. Although there is a clear benefit for many site owners who implement the system, for some websites with an existing registered community, there will be an important question about their future strategy. Will the value of sharing their unique knowledge of their users’ activity outweigh the potential returns from becoming a part of a larger Facebook ecosystem? Especially as anything their users publicly share with Facebook would also potentially be shared with their competitors.

EMERGING SPACES PuLSE: Facebook extends its network with new social services

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SOCIAL NEtwORKS + AD NEtwORKS: tHE FutuRE OF ONLINE DISPLAY? The competition that the Open Graph will create between Facebook– with a database of declared interests of its users– and Behavioural Targeting networks- which use cookie-based tracking and web browsing history to create a picture of a user’s interests– will make the world of “interest based” targeting a very interesting and competitive area as the rival technologies develop. The fact that billions of web pages carrying “like” buttons will also be connecting users’ browsing habits with Facebook means that– although this data is not currently being reported– it seems that behavioural targeting will at least be possible. (Although an article in the Financial Times reported that Facebook would be launching a behavioural targeting advertising product, this has been denied by Facebook, and the article was subsequently amended.) But this is surely the next logical stage for Facebook; to extend its own display advertising to other websites and create an advertising network of its own. Whether or not this would include behavioural data from tracking exposures to “like” buttons as well as the rich attitudinal and demographic data that is being explicitly reported to Facebook is almost a minor implementation detail. The fact is that, with the benefits of Facebook’s rich understanding of its audience, but away from the highly engaging content from the users’ own Facebook friends, this would create a highly effective method for both targeting and delivering online display advertising, putting them in direct competition, not just with other social networks and social media sites, but with the rest of the online display advertising industry.

FuRtHER INFORMAtION If you’d like to discuss the subjects raised in this issue of EMERGING SPACES: PuLSE in more detail, please contact; Scott Thompson Senior Digital Research Executive Scott.Thompson@smvgroup.co.uk

For more information about Starcom MediaVest’s EMERGING SPACES research and thought leadership programme, please contact; Donna Booth Associate Research Director Donna.Booth@smvgroup.co.uk Simon Stanforth Group Research Director Simon.Stanforth@smvgroup.co.uk

Whether they could pull it off remains to be seen, but the potential for Facebook forming a strategic partnership with someone like Yahoo! or Microsoft with the scale to quickly develop in this area is certainly a very interesting one. Which puts Facebook in the unusual position of being a business that must be giving Google something to worry about.

EMERGING SPACES PuLSE: Facebook extends its network with new social services

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Emerging Spaces Pulse - Facebook's Open Graph  

We look at the implications that this new service will have for advertisers, website owners, and the future of the Social Web.

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