Posts Tagged privacy
Facebook’s public offering will be the largest and perhaps most highly anticipated Internet deal in history. But faced with great expectations, Facebook is staring down some potentially unnerving obstacles when it comes to key areas of monetization and growth: public distrust and display advertising apathy.
According to a new AP-CNBC poll, 57 percent of Facebook users say they never click ads or other sponsored content when they use the site, with another 26 percent saying they hardly ever engage in such activity. Only 4 percent of users say they often click on ads — results that are only slightly better than the 2-3 percent clickthrough rate some experts consider the benchmark for effective banner ads.
While the company makes money, in part, simply by displaying sponsored content, user clicks are a critical part of an advertiser’s calculus when gauging how effective those ads are and how much they’re willing to pay for them. In the first quarter, Facebook generated 82 percent of its $1.06 billion in revenue from advertising sales. In the company’s online IPO pitch to retail investors, CFO David Ebersman says the company is working to make ads “more relevant, more social, and more engaging” as it looks to grow.
And while Facebook has been able to decrease its reliance on sponsored content (down from 98 percent of sales in 2009), the hopes of expanding the company’s e-commerce footprint also faces public resistance, the poll shows. A majority of participants (54 percent) said they wouldn’t feel safe using the platform for financial transactions like purchasing goods or services. Only 8 percent said they would feel extremely or very safe in doing so.
We have been warning our friends, fans, and followers for a long time about the information they post on Facebook and Twitter. Facebook was created a way for Harvard students to communicate, socialize, and track each other (my 94 year old Uncle has a Facebook page. Yikes!). Twitter was created as a way to send text messages to groups of people. People still use these networks as intended but now the reach is in the billions (factoring in that search engines spider and list your Facebook page and Tweets). And along the way very smart people have figured out, and are working on figuring out, new ways to make money from all of the great, personalized content that you freely give them. The money isn’t in the ads Facebook runs by you, it’s in the content you give them, which they can, and will sell, to among others, the medical and insurance industries.
Real Age is a great example of what Facebook could do. Real Age takes the user through a form of health and lifestyle questions and at the end gives that person their “real age” as opposed to their “biological age”. The user feels they’ve benefited from their participation. And Real Age has a form of medical information that they sell to the medical community at about $50 a pop. However, participation in the Real Age process is anonymous. The information you offer up is not.
Below is a link to an article written by Helen A.S. Popkin that we thought would be of interest to you, Your Facebook profile: An open invite to crime?