Facebook Beacon to become opt-in

by Charlene Li

I just received word from Facebook that they will be making significant changes to Beacon. I've included the full text of their statement below.

As you may know, I had a situation with Beacon where information from Overstock was sent to Facebook without my knowledge. Because I took no action, the information appeared on my profile.

This is a definitely a step in the right direction -- I argued for greater transparency along with many other people, and it appears Facebook has heard the protest. But given the concerns out there, I think Facebook has to do a lot more to regain the trust of not only its members but also of its partners. Here's a quick summary of the major changes and what it means:

- Facebook members will be given clearer notifications of information sent by partners to Facebook, on both the partner site and on Facebook. Beacon also won't send information to Facebook if it believes that members didn't see a pop-up on the partner site. This was a major problem in my situation -- if a Beacon notification did appear on Overstock, I never got a chance to see it.
- Adding Beacon-generated stories will require an explicit opt-in by the member. Before, if the member did nothing, the story would appear. The changes mean that the user HAS to approve the addition of the story -- so no more inadvertent discoveries of purchases by your friends. (In my the comments of my original post, "Will" bought an engagement ring on Overstock -- and his friends, fiance, fiance's friends, etc. all found out about it)

- If you take not action, stories will be archived and still available for you to take action on later.

- There will be no opt-out option of Beacon, either at the partner level or universally from Facebook. That means that if you really, really can't stand the idea of your information traveling between sites, you have to either never use sites that deploy Beacon or stop using Facebook.

It's this last point that I think is most interesting. Facebook obviously wants to keep Beacon going, and it has taken the first step to give members greater control over when information is posted. I, for one, am comfortable with this, as I find it a pretty convenient way to publish information (like when I bought Beowulf tickets on  went to see Beowulf).

So MoveOn and many of us pushing for change got what we wanted -- the ability to opt-in to stories that appear on our profile. But I believe some privacy advocates will continue to loudly agitate for the full dismantling of the Beacon program. I don't think this will have that big of an impact on members -- after all, MoveOn had 54,000 members of its group as of today, which is significant, but nothing like the hundreds of thousands who petitioned for change after News Feed was introduced last year.

The greater impact will be on nervous partners, some of whom -- like Overstock -- have withdrawn their Beacon participation. Most have taken a wait-and-see approach, weighing the benefits of exposure to their customers' friends network against possible push-back from privacy advocates. My concern is that this mistrust of Beacon spills over and dampens the already nascent beginnings of social media marketing.

It's imperative and in Facebook's best interest -- and the interest of the social networking marketing industry as a whole -- that Beacon be a program that is clear in its intent and execution,and wins over the trust of members and partners.

I'd love to know your thoughts -- has Facebook gone far enough with these changes, or do they need to do more?

Here's the release:

Facebook Update on Changes to Beacon
No stories will be published without users proactively consenting

We appreciate feedback from all Facebook users and made some changes to Beacon in the past day. Users now have more control over the stories that get published to their Mini-Feed and potentially to their friends’ News Feeds.

Here’s how the Beacon changes work:

- Stories about actions users take on external websites will continue to be presented to users at the top of their News Feed the next time they return to Facebook.  These stories will now always be expanded on their home page so they can see and read them clearly.

-  Users must click on “OK” in a new initial notification on their Facebook home page before the first Beacon story is published to their friends from each participating site. We recognize that users need to clearly understand Beacon before they first have a story published, and we will continue to refine this approach to give users choice.

- If a user does nothing with the initial notification on Facebook, it will hide after some duration without a story being published. When a user takes a future action on a Beacon site, it will reappear and display all the potential stories along with the opportunity to click “OK” to publish or click “remove” to not publish.

- Users will have clear options in ongoing notifications to either delete or publish. No stories will be published if users navigate away from their home page. If they delay in making this decision, the notification will hide and they can make a decision at a later time.

- Clicking the “Help” link next to the story will take users to a full tutorial that explains exactly how Beacon works, with screenshots showing each step in the process.

These changes are in addition to those made earlier to improve the notifications on partner sites as follows:

- Users were sometimes moving away from a page before a notification could be fully displayed. We changed the process so that we confirm the full display of the notification before any information can be sent back to a user’s Facebook account.

- The notification appears more rapidly and is more clearly displayed.

There has been misinformation in the market about some key aspects of how Beacon works:

- Participation in Beacon is free for all partner sites.

- Beacon only allows for the sharing of specific actions on the specific sites participating in Beacon.

- Beacon only has the potential to display actions to a selection of a user’s friends through News Feed and on a user’s Mini-Feed.

- Facebook is not sharing user information with participating sites and never sells user information.

As with all its products, Facebook will continue to iterate quickly and listen to feedback from its users.

Close encounter with Facebook Beacon

I put a lot of trust in sites like Facebook to do the right thing when it comes to privacy. After all, the only stuff that gets out into the public is the stuff that I actually put in.

Until now.

Earlier this week, I bought a coffee table on Overstock.com. When I next logged into Facebook and saw this at the top of my newsfeed:

I was pretty surprised to see this, because I received no notification while I was on Overstock.com that they had the Facebook Beacon installed on the site. If they had, I would have turned it off.

I used my personal email address to buy the coffee table, so I was puzzled why and how this "personal" activity was being associated with my "public" Facebook profile.

(Since I was on Facebook, I updated my status to say that I was trying to figure out Facebook Beacon. And Scott Rafer instantly messaged me that he could explain all -- which he very succinctly did. Thank you Scott!)

Facebook Beacon is merely a small piece of script that allows the partner site to put a cookie on your  browser. So when I bought the table, an Overstock cookie was created, which then transferred the information to Facebook. Facebook then checks to see that the same browser is logged into Facebook, and shows the information. I'm not sure of all of the details, but I suspect that if I had logged into my "personal" Facebook account first (yes, I have two Facebook accounts and unless you know my personal email, you won't find my truly personal Facebook profile), that Overstock activity would have been logged to that Facebook profile.

So there's no checking or verification of email address, name, etc. to verify that the activity on Overstock is being done by the same person logging into Facebook. Imagine my horror if items were added to my NewsFeed because my kids were using my computer ("Charlene played DragonFable last night for 3 hours").

So I'm joining a growing chorus of Facebook critics that Beacon has some serious problems. Facebook has made the point that Beacon isn't sharing information publically, but with your friends. That's correct, but I think both the critics and Facebook are missing the point.

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.

I'd love to hear your perspective on this issue -- and please send me examples and screenshots!

Update 11/23/07: The plot thickens. It turns out that my husband and I inadvertently both bought the same coffee table from Overstock.com on the same day (yeah, not the greatest spousal communication going on!). I suspect that the order that made it on to my Facebook profile was actually HIS order, because I had additional items in my order.

So that means when my husband purchased the coffee table, because the Facebook cookie on that machine was for my Facebook account (my husband is not on Facebook), the purchase was attributed to my profile. He also did not have any notification that Overstock.com was sending the information to Facebook.

Lastly, some of who have friended me noted that I bought Fandango tickets to Beowulf Wednesday night. I received a very clear pop-up notice at the end of the transaction, and had no problem with that information being added to my profile. Granted, I had advance notice that this would likely happen, so to some people's point, i think that this is a matter of people getting used to this feature, much in the same way that it took a while for Newsfeed to grow on Facebook users.

But remember that Facebook made some significant changes to Newsfeed after it was launched, namely, giving people the ability to control what items made it into the newsfeed, and who in your friends list could see it via limited profiles.

I think that Facebook Beacon will have to undergo some significant retooling -- it has a lot of potential in terms of tying together aspects of my online life, but as I wrote above, I need to be able to have total transparency and control on when this is happening. Reigning in and policing partners like Overstock.com will be an essential -- and tough -- thing to do, especially if Facebook switches Beacon to be opt-in.

Forrester videos on social technologies from Consumer Forum 2007

by Charlene Li

The video highlights from our Consumer Forum 2007 are now available. Josh and I were keynotes and we spoke in details about some of the key highlights from our book. Below is a summary of the keynote speakers and speech topics. In particular, I highly recommend the speeches by Christie Hefner and Henry Jenkins.

***Note that you need to use Internet Explorer to use the navigation and see the slides.***

• Charlene Li — Vice President, Principal Analyst:  Your Customers Are Revolting ;-)
• Josh Bernoff — Vice President, Principal Analyst:  Business Strategies For Success In The Groundswell
• Christie Hefner — Chairman and CEO, Playboy Enterprises & Brian Haven — Senior Analyst:  Social Networking And User-Generated Content In Today’s Media Environment
• Christina Norman  — President, MTV Networks:  MTV — Defining The Next Generation
• Robert J. Bach — President, Entertainment & Devices Division, Microsoft:  Connected Entertainment: Delivering New Ways To Bringing People Together
• Richard Edelman — President and CEO, Edelman:  Corporate Image In The Age Of Social Technologies
• Jeremy Allaire — Founder and CEO, Brightcove, Ze Frank — Founder, ZeFrank.com, Philip J. Kaplan — Founder and President, Products, AdBrite, & Shar VanBoskirk — Principal Analyst: Three People Who Are Changing The Face Of Media
• Henry Jenkins — Co-Director, MIT Comparative Media Studies, MIT & Josh Bernoff — Vice President, Principal Analyst: Why The Convergence Culture Matters To You

• Charlene Li — Vice President, Principal Analyst:  Your Customers Are Revolting ;-)
• Josh Bernoff — Vice President, Principal Analyst:  Business Strategies For Success In The Groundswell
• Christie Hefner — Chairman and CEO, Playboy Enterprises & Brian Haven — Senior Analyst:  Social Networking And User-Generated Content In Today’s Media Environment
• Christina Norman  — President, MTV Networks:  MTV — Defining The Next Generation
• Robert J. Bach — President, Entertainment & Devices Division, Microsoft:  Connected Entertainment: Delivering New Ways To Bringing People Together
• Richard Edelman — President and CEO, Edelman:  Corporate Image In The Age Of Social Technologies
• Jeremy Allaire — Founder and CEO, Brightcove, Ze Frank — Founder, ZeFrank.com, Philip J. Kaplan — Founder and President, Products, AdBrite, & Shar VanBoskirk — Principal Analyst: Three People Who Are Changing The Face Of Media
• Henry Jenkins — Co-Director, MIT Comparative Media Studies, MIT & Josh Bernoff — Vice President, Principal Analyst: Why The Convergence Culture Matters To You

AT&T Wireless silliness

by Josh Bernoff

The only live TV I watch is sports -- and since AT&T Wireless blanketed the airwaves with it's "we work where you live" campaign during the Red Sox's triumphant march to the World Series, I got a chance to see a lot of it.

Now they are extending it to a Web site where you can create a custom T-shirt (or mug, etc.) about the places you live. For example, what you see at left is for someone who lives in Twitter, Web, and Facebook.

Through Zazzle, you can pay $20 and get the shirt yourself. It has a little AT&T logo on the back.

After having my fun, I had to ask, Is this worth it?

First of all, is it social? It doesn't really involve other people -- unless you count the ones that see your T-Shirt or your mug. And they don't get much of an AT&T message. This is zeroth, most minimal level of user-generated content.

Is it viral? Could be. Depends on how many people find it mildly interesting, as I did.

In the end, this is an ad campaign advertising an ad campaign. AT&T Wireless is now throwing what must be hundreds of millions of dollars at rebranding itself back again after selling its name and naming itself Cingular. How much money has been spent on these names? Ad Age raised the question of whether the branding effort was "A Failure of Epic Proportions".

But when you spend so much on branding, is advertising your advertising worth it? Will the people fooling around on this site take away any message about AT&T Wireless that they didn't already get from the TV commercials? I doubt it.

Still, it's fun. Here's what you get when you mash up GigaOm, TechCrunch, and Forrester.

Tags: AT&T Wireless, where do you live, bernoff, Forrester Research, Groundswell

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The cult of immediacy versus the unstoppable groundswell

by Josh Bernoff

When it comes to blogging, faster is often perceived to be better. GigaOm and TechCrunch are all over the trends, covering the same announcements, often within minutes of each other. I've become even more aware of this as I've spent some time with Jeremiah Owyang, our new analyst, who produces posts at a prodigious rate, not just on events, but on whatever's happening with him, complete with photos and videos. And this stuff is interesting.

It's also distracting.

Through Twitter and rapid blogging you can now have 30 or 300 perspectives on anything that happens, opinions and comments bouncing off each other like superballs in a trash compactor.

I don't know how many people have gone back to those "in the moment" posts to see just how swept away they were by the moment. Even amidst these events we are simultaneously at a time in which a broad, sweeping change is happening, and we can mark its progress by every event and announcement, like Facebook's advertising and Open Social. But the significance of these events is only visible over the long view.

I think bubble thinking is driven by the swirl of events in this frenzied cult of immediacy. It's hard to think straight when your head is buzzing with the cocaine high of whatever happened ten minutes ago. Steve Rubel, quoting Brian Reich, called it out as "Shiny Object Syndrome." Behind this bubble is a reality driving forward, an unstoppable groundswell. Stuff that builds with that trend will matter. The rest will be swept away.

Maybe it's because I just finished work on a book -- that archetype of slow-cooked slow thinking that needs to last -- and maybe it's just cause I'm a lot older than 25, but I am trying to fill a different niche. Let's face it, instant analysis isn't deep, and deep analysis isn't instantaneous.

The reason this matters -- and I'm sure I'll get strafed for saying this -- is not just the activity of people, but of companies.

You may think corporations don't get it, but they do, eventually -- they just move more slowly and carefully. I've now spoken with dozens -- they're spending real money, moving forward with projects, making mistakes, learning, and mobilizing. They have lots of money and big brands. As the mass of regular people absorbs these social phenomenon, many of those companies will be there to meet them, and laugh if you want, but they are not all clueless -- not any more.

That's a long-term business trend with money behind it, one that has staying power. And it won't be swept away with yesterday's press releases, either.

When your family asks you this Thankgiving what's really going on with this social "stuff" you're working on, try telling them that. It's not revolutionary, but it's making the future happen right now.

Tags: cult of immediacy, bubble, bernoff, Forrester Research, Groundswell

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Upcoming Forrester social computing workshop

I'm going to be running a small workshop on ThursdayWednesday, December 5th in San Francisco entitled, "Social Computing: Tapping Into The Power Of Connected Consumers". We limit attendance at the workshop so that there can be a great deal of interaction with the analysts -- which will also include my colleague Brian Haven.

The agenda closely follows and uses the framework from the Groundswell book -- we'll be looking the process of how to create a social strategy around one of five specific objectives. The day will also include a deep dive into the technologies that support these objectives, tools like blogging, social networking, podcasts, widgets, and wikis.

Closing out the day will be a panel of leading marketers and agencies in the space. The confirmed panelists are:

• Misha Cornes, Group Director of Strategy, Organic
• John Taschek, VP Market Strategy, Salesforce.com
• Ed Terpening, VP Social Media, Wells Fargo

To register or for more information, please email events@forrester.com, or phone +1 617/613-5905.

Why your company needs to be on Facebook & MySpace

by Charlene Li

(Note: this was originally posted on Harvard Business Online, which is part of Harvard Business School Press, the publisher of our upcoming book).

As an analyst, I’m often asked by people why they should bother with services like LinkedIn, Facebook, and MySpace, both from a personal as well as corporate perspective.

Let’s start with a fundamental premise – that all business is social and personal. Business involves people and communications and we all prize “networking” skills and opportunities. Businesses don’t strike deals with each other – people do. And we build bonds by talking about everything from sports teams and the weather to our families and hobbies.

So we as business people already engage in social networking every day, primarily through phone calls, emails, meetings, and events. The same activities take place on social networking sites – people share tidbits and moments that build relationships.

Yet, many people when they first go and experiment with a site like Facebook, don’t find it relevant to their professional lives. There are two reasons for this: 1) Your professional colleagues are likely not actively using Facebook; and 2) Most of the applications today aren’t designed for a business context.

Let’s take the first problem – you may not have many friends in these social networks. This was my problem – it was only this past spring that people I actually know started using Facebook. My friends are posting links, book reviews, the events they were going to, and suddenly, I now find myself at a near addiction with Facebook. I went to an event because five friends said they would be there. And when I saw them at the event, I congratulated them on closing a round of financing and asked about their recent vacation – all of which had been shared on Facebook. What’s the business value of staying on top of your network? As we know from experience, priceless.

Now for the second problem. Business applications on services like Facebook have yet to take off, which is why people like Tom Davenport have a hard time seeing the business value of social networking sites. I don’t blame him – after all, the most popular applications on Facebook today include such frivolous things like playing Scrabble and Vampires (where you “bite” your friends – don’t ask). That’s because these applications are being designed by 20-something developers for their 20-something friends.

But remember: The notion of creating social applications is only 6 months old – we are in the early days here. Business-oriented developers are just now waking up to the possibilities, and the audience that would use these tools are just discovering social networking. It’s going to take some time for these two sides to find each other and develop an ecosystem for business applications.

Here’s an example – LinkedIn described to me a new social application that would show events in your industry that are coming up – and who in your network is going to them. It will also show you people in that city that you could connect with. So if you know that colleagues, suppliers, partners, funders, customers, etc. are going to be gathering, you’re going to want to be there too.

There’s one final business value that companies are already seeing – and that’s reaching the people who are using social networking sites. Advertising on social networking sites won’t work well – but communicating with people, talking with the “fans” of your products on Facebook makes a lot of sense. Victoria’s Secret has badges that its enthusiasts can download on MySpace on put on their profiles for their friends to see. Ernst & Young (yes, an accounting firm!) answers questions from college students on Facebook – people they are trying hard to recruit.

So don’t write off social networking sites as merely social playgrounds for the young. Your customers, prospects, and employees are exploring and extending their relationships there. Some of you will be bolder in creating business value in these networks while others will wait for the pioneers to carve out the paths. But ignore these new communities only if you believe your customers are not there – and there are few instances where this will be the case.

Does your business embrace social networks? Or is it taking a hands-off approach?

Tags: Facebook , MySpace, social networks,  Forrester Research, Groundswell

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MySpace and Facebook launch new Advertising products, why Hyper Targeting, Social Ads and rise of the “Fan-Sumer” matter to brands

By Jeremiah Owyang, insight from Charlene Li and Shar VanBoskirk.  This is also being cross-posted on the Jeremiah's Web Strategist Blog and the  Forrester Marketing Blog. 

Executive Summary
Both Facebook and MySpace have launched profile and network targeted advertising and marketing products. As they both use member interests and the communities which they are part of, trust continues to become key in adoption as information is passed along the network. The sheer size of MySpace’s member base, as well as the thriving local business membership will lead to success. Facebook, which brings a unique solution evolves advertisements to endorsements and encourages members to subscribe to a brand in what we are calling “Fan-Sumers” (an evolution of the consumer). As consumers share their affinities, brands can advertise using trusted social relationships.

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Data: Highest trust comes from friends or acquaintances

(Left Graph: Consumers trust their friends and acquaintances far more than any other sources –Report: Leveraging User-Generated Content, 2007)

Trust is and will continue to be one of the most important attributes in the decision making process. 

Communities form online, trust develops
How we get information continues to evolve as communities form online organized by individuals with similar interests. Just like in real life, we identify our interests, and are often influenced by opinions and experiences of trusted peers in our communities. For many, social networking sites embody these relationships and influence how trusted decisions are made.

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MySpace: Brands have a home and can hyper-target ads
The already active MySpace platform is leveraging their already active member profile pages, encouraging the many small and medium businesses to setup a online storefront and providing tools to make it easy to self-serve advertisements to their customers. It’s easy to make the case that demand and inventory are present.

[Brands can now self-serve a targeted marketing and advertising campaign within the already thriving MySpace community]

Webmaster not needed: MySpace profile for businesses
Small businesses can continue to build their online profile on MySpace (many of them already have), but now, because of their familiarity with self-marketing (restaurant, nightclub, and other local businesses and their customers) on Myspace.

Self-service ads remove middle man
When friction is removed, efficiency is created. With MySpace’s “Self-Service” ad network small businesese can target ads across a variety of affinities (over 300) and deploy ads on users’ profile pages. These ads, which should (by theory) be relevant and contextual to a user who has self-populated their profile page will have these ads displayed.

Advertising balance required in already busy MySpace
With marketers already with a strong presence in MySpace this could continue to erode away at early adopter “cool kids” from embracing MySpace. But as cycles have shown, where communities form, marketers follow.

User experience continues to be free-form
These ads, which will conform to IAB advertising standards (sizes) will give advertisers the freedom to create the ads in the style accustomed to the network. Yes, expect more blinking text.

To watch: OpenSocial
As OpenSocial starts to be deployed across MySpace and other partners, expect profile ads to be tied to widgets and vice versa; a fabric of links. I’ve already outlined How to explain OpenSocial to your executives.

Inaccurate user profiles could result in mis-targeting of ads
We know that many members do not make their profiles accurate which could yield inconsistencies in how and where ads are displayed. While MySpace has assured they’re accounting for rogue outliers, expect some inefficiencies in advertisements.

Our Call: Sheer mass will yield success
We think this to be a win for MySpace, given their great reach, there are millions of users with active profiles, and there’s also plenty of inventory as many small and local businesses that are present will be comfortable deploying ads where their community already exists.

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Facebook: Rise of the Fan-Sumer
Going beyond just profile matching of advertisements, Facebook allows consumers to self-identify with brands and becoming fans. In turn, brands can use these “Fan-Sumers” as endorsers to their own trusted networks, resulting in trusted word-of-mouth. Brands can also self-manage their own campaigns, and there’s some unique opportunities for eCommerce widgets or applications to be part of this formula.

[Using Facebook, consumers will publicly endorse brands, resulting in the birth of the “Fan-Sumer”, causing efficient word-of-mouth marketing in their trusted network]

There are three major components to today’s announcement, they include the following:

1) Facebook Pages: Brands get their own profile
For the first time, businesses will legitimately be able to setup profile pages, much like MySpace’s business profiles feature. Next, Facebook members will add these brands as ‘fans’ (much like friends) and this will produce a connection between the parties. Members will self-identify with brands in what we are calling “Fan-Sumers”. Furthermore, this service, called “Beacon” gives third parties the ability to share information on the newsfeed and provides lots of unique opportunities. Sponsored groups will start to evolve into this new form brand profile as this system gets adopted.

2) SocialAds: Endorsements at the friend level lead to eCommerce
Once a member has indicated they are a fan of a brand, that brand can choose to purchase SocialAds (from Facebook Sales or via a self-service platform). A unique endorsement of a product or brand will now appear on that individuals news feed or banner or skyscraper ads. Advertisers can purchase social ads target by profile demographics and profiles, as well as by activities done in Facebook. Payment is an auction-based system available to marketers via both CPM and CPC pricing.

3) Use “Insight” for control and flexibility
This self-service dashboard called Insight gives the marketer detailed knowledge how their advertising campaign is working on Facebook. It’s expected that advertisers will have flexibility, control over the type of ads they deploy, in what quantity, and the demographics they want to target.

A likely scenario:
Shauna, who enjoys Revlon products, indicates she’s a fan of the brand and becomes a Fan-Sumer. Marketers at Revlon can then purchase SocialAds, which will then display on Shauna’s newsfeed or on ads on her profile. If Shauna purchases Revlon makeup from Amazon, her newsfeed could indicate an eCommerce links recommending it to her 100 trusted friends, resulting in further sales.

[The traditional marketing funnel as we know it is distorted; endorsements are now passed from trusted customers to prospects, not direct from the brands themselves]

Implications for Facebook:

Members have more control over ads
Facebook users can opt to turn off social ads, and friends of that user can ‘dial down’ endorsements they see using preferences. We believe that Facebook is attempting to respect the rights of users by giving control to members to ‘opt-in’ to become a Fan-Sumer.

Quest for Fans will cause brands to beg
Since social ads only work if a member has indicated they are a fan, brands will be working to earn and buy fans to accept them as members. Expect a lot of noise to be generated from this activity as brands run campaigns to encourage members to add them as fans through discussion boards, banner ads, and special offers.

Hard to qualify a “business”
Facebook is limiting these features to ‘real’ businesses and organizations. Expect an entire team to be crawling and dealing with this qualifying the issue. As recent member accounts have been disabled from Facebook, expect businesses and organizations to encounter same issues.

Limited ad supply to raise prices
Because Facebook members will see only two social ads per day, we expect the supply of ads to be in scarce supply and thus raising prices and not matching the value. This could shift ad buying to large brands who have experience buying and managing search and direct response ads.

Our Call: Brand affinity leads to community endorsements and more trusted marketing.
We see this as a win for Facebook, this highly targeted system isn’t just about web advertising but about brand affinity and hooks into what’s really important, trusted endorsements from people in a network. This truly is the next generation of advertising. Facebook tells us that the worst case it will be 2 times click through rate over the performance of (existing is 4-26%)

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Next Steps For Brands

Experiment: Because of the control and flexibility, we recommend to brands that are currently on either of these social networks to experiment and test.

Learn how to efficiently manage your campaigns. There’s clearly a trend towards self-service, which provides efficiencies for both businesses and the platforms.

To know: Marketing has changed, advertising is no longer a sole-solution. Marketers must also learn how to be part of communities, engage with them, and be part of the conversation.

To know: Marketing is now distributed, brands must embrace communities where they currently exist, rather than solely driving them to their corporate website.

[While traditional search advertisers like Google and Yahoo match by keyword, My Space and Facebook match on something far more powerful: people and their relationships]

This digest not only explains what is happening, but why it matters to you. If this was helpful, please pass it on. Love to hear your thoughts, please leave a comment, even if you don’t agree.

Google goes mobile - what it means

by Charlie Golvin

(Note: My colleague, Charlie Golvin, covers wireless devices and services, and he was kind enough to provide his insights on Google's latest mobile announcements - Charlene)

The Android platform that Google and its partners in the Open Handset Alliance announced today will significantly impact the mobile market — eventually, but the time for this impact to play out is lengthy.

Android is most impactful on handset vendors because it provides a very cost effective software solution that can reduce their licensing, development, and maintenance costs. The greater the portion of their portfolio that Android makes up, the more true this is.

Android holds a similar promise for developers, reducing the complexity of their development efforts that currently span multiple platforms and multiple versions within those platforms. Paradoxically, Android will increase complexity for developers initially since it represents yet another platform to support. But the platform also promises more flexibility in distribution and business models, more akin to the Net today.

Carriers have the opportunity to benefit by virtue of the innovation among developers Android will help spawn. Also, carriers now in search of business models that extend beyond subscriptions and pay per use have a greater chance of succeeding with partners that bring the necessary skills to make ad-based models succeed (try to think of one).

But there are some things Android won’t change — like the distribution model for handsets in markets like the US where carriers are in control. Those of you dreaming of low-cost unlocked handsets sold at retail along with flat rate access plans should sit back, take another hit off your bong, and mellow out. Not gonna happen, not just by virtue of Android’s presence, anyway.

Oh, what’s in it for Google? Reach to an audience that is larger than Net users on the PC, and growing larger, plus relevance for the next billions of Net users, the majority of whom will only experience the Net on a mobile phone, not a PC. And the opportunity to sell ads to anyone who wants to reach them, on any of these new Net-powered mobile apps or just on the mobile Internet through a browser.

(Note this goes nicely with the OpenSocial effort, since all those widget developers won’t have the tolerance for the complexity of today’s mobile environment but definitely want to be able to extend out to phones.)

Tags: Google, Open Handset Alliance, Android, mobile,  Forrester Research, Groundswell

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How the OpenSocial story broke

by Charlene Li

Valleywag pointed out that I may have contributed to the New York Times getting the scoop on Google’s OpenSocial announcement. I’ve always believed in transparency, so wanted to set the record straight.

Google’s Joe Kraus briefed me on Monday, October 29^th about OpenSocial. At the end of the conversation, I asked when the press embargo and NDA lifted, and I understood it to have lifted last Friday, Oct. 26^th. They actually meant THIS Friday, November 2^nd.

So when the New York Times called for background on OpenSocial, I unknowingly broke the press embargo. This is something I have never done in my eight+ years as an analyst. I am usually very carefully about asking for and respecting NDAs, and in this case, failed to be crystal clear in my understanding of when the embargo lifted.

The upshot is I contacted Google immediately and told them about my conversation with the Times. They were very understanding, said that they would notify the OpenSocial partners, and stressed that there were no hard feelings.

I feel that I have let down people who trusted me with embargoed information and I’m very sorry to have done so. My goal going forward is to rebuild that trust, so as you can imagine, I’m going to be even more diligent about getting the exact dates/times of embargoes from now on!

Tags:  OpenSocial,  Forrester Research, Groundswell

 

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