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Copyright &In Pursuit of Revenue, Social Networks Ramp Up Ad Targeting | Digital - AdAge
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For the dominant social networks, the pressure is
on. Facebook's IPO cast a harsh light on its ad business, which isn't growing as fast as Wall Street
had hoped. Twitter, on the other hand, has to prove that
it has a business that
scales enough to keep the doors open.
One way to gain more ad dollars is
to ramp up ad targeting, which both companies have done over the past few weeks. But while Twitter is
playing it safe, Facebook is
pushing the envelope with new tools that
could bring the web equivalent of
junk mail to your Facebook page.
Most Americans are accustomed to the rules of
engagement for direct mail,
very much an offline practice. (Subscribe to a new magazine? Don't be surprised to see a raft of
offers for credit cards in your mailbox.) But Facebook is
allowing its big advertisers to match the email addresses and phone numbers they've collected with profiles matching that
Giant brands will be able to sync their entire CRM databases to Facebook to more efficiently target
their customers, rather than waiting for them to "like" the brands' content or page.
The move raises a number of
privacy questions. When a consumer gives an email address or number to a marketer, there's the expectation he will get communication from the brand. But what about when it comes to Facebook? "I don't think anyone who has given an email and phone number to Facebook expected it to be used by
Tide to target
ads at them," said Alan Chapell, an attorney who consults with ad-tech companies on privacy policies.
Twitter's gentler approach
Facebook says it's giving users two opportunities to opt out. First, a marketer must ask permission from customers to reach them on Facebook. Second, users can opt out by
clicking a box on the ads themselves.
Twitter, which billed its new targeting option as the biggest change to its ad capabilities since they were first introduced, is
taking a more cautious approach. Twitter's interest targeting includes 350 prepackaged categories, from the broad "pets" or "films" to more niche subcategories like "documentaries" and "Bollywood."
The categories are not created from the content of
tweets themselves, but from user actions on Twitter such as retweets and favorites, and whom users follow. If you follow Anthony Bourdain, for example, that 's a clue that
you're a foodie.
Unlike Facebook, Twitter is
intrinsically public and users have no expectation of
privacy. Yet Twitter's approach to targeting is
likely to be perceived as less invasive than, say, Google's mining of
search data or Gmail. "We have always been thoughtful and deliberate in how we roll out our advertising products and features," a spokeswoman said in a statement. "This certainly applies to targeting as well."
From a revenue standpoint, Facebook is
under decidedly more pressure to ramp up revenue -- fast. One could also argue that
users have higher switching costs since many have spent years accumulating connections, photos and apps. That's why we predict it will keep pushing the envelope until the scope of
its business matches the ubiquity of
its user base, and why the ad targeting has only just begun.
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