Facebook Beacon

- November 21, 2007

Has Facebook gone too far with their last Innovation of Ad strategy?  What is the problem with Facebook Beacon?

Facebook has launched a new advertising strategy called Facebook Beacon.  It is a spin-off program that takes advantage of its Word of Mouth (WOM) networking to beef up advertising revenues. 

If you’ve been reading any SEM industry news, you know that Social Media forums have been proving searchers are more likely to purchase products or services online after reading reviews on those products online, whether they are friends with the person that reviewed the product or not.  Take that effective Word of Mouth marketing and apply it to a new platform, Facebook Beacon.  So what does FaceBook Beacon do?  It uses javascript embedded on participating external websites to track a Facebook user’s online purchases from those external websites. Facebook receives that information and then posts that purchase in the form of a story, or endorsement in an RSS feed within Facebook, for that user’s friends to see.  It appears to be a voluntary product endorsement. 

So what is the problem?  Well, there could be several.  First, in some states, if you haven’t solicited to have your name appear as an endorsement for commercial advertising, that could be considered illegal.  Second, let’s say you go online and make a purchase in part to keep your confidentiality.  More specifically, you didn’t go to a store and buy the product, instead you opt to purchase it online in order to keep your anonymity.  If that is the case, you may have just waived for your anonymity without knowing it. 

Facebook counters the problem by providing privacy controls. Facebook states that the users of Facebook can opt out from allowing their story to be posted for their friends to see.  However each user has to voluntarily choose to opt out.  Therefore, if that user doesn’t opt out, Facebook maintains the control in posting that information anyway.  Why can’t it be an opt-in program? Why not allow the user to choose to have their story posted?  Another issue that arises is clearly addressed by Om Malik, “If you [opt out], your friends won’t see the information, but apparently Facebook still receives it. This means that if you are a Facebook member, Facebook will know what you are doing on each of their partner sites.”  This may be yet another privacy violation. 

So, the debate comes down to this… as we evolve into a more virtual social era, the users are already knowingly posting private information about themselves for the world to view.  They are already waiving their privacy rights, however, those users are maintaining personal control over the information they release.  If users allow themselves to be involved in social media forums, what level of control should those users have over the information flowing over the web about them? Should advertisers be able to track those user’s purchases in order to determine behaviorally the most effective ad strategies to employ?  Who should have the final say in the information that is released about a person’s buying habits, the social forum or the user?


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