Lessons From Facebook

If you’re in the business of selling ad space online, then competing with Facebook is one of those good news/bad news situations.

Let’s start with the bad news: the big brand advertisers you’d love to have are lining up to spend their dollars with Facebook. So there’s that.

Now for the good news: because Facebook is so fast, aggressive, and fearless in the adjustments it makes to the platform, all of its learnings are right out in the open for anyone to take cues from.

Of course, that’s what really makes Facebook such a special company. It tests, learns, and most importantly, it acts. There are no sacred cows with Facebook and no final end state; it’s an ongoing evolution.

And because Facebook isn’t beholden to any particular outcome, much of what it has learned has turned long-standing assumptions about digital marketing on their head. Like these:

Size Doesn’t Matter

The history of (non-search) online advertising is a story about an inferiority complex relative to TV and the quest to find formats that replicate what brands get from the tube.

The thinking has always seemed to be, with the right creative canvas – bigger, louder, and splashier – ads would become more effective and big brand dollars would follow. And yet, Facebook is turning into a brand advertising powerhouse with 110 x 80 units that don’t animate. These are units that almost defy creative expression.

Sidebar – it’s interesting that the lack of Flash on the iPhone/iPad has caused such a stir, when arguably the two most effective ad formats (Facebook and Google ads) are essentially static placements.

Less Is More

By any measure, there are way too many ads online.

Subjectively, most sites are so visually cluttered that every ad loses a degree of its potential impact. Objectively, publishers aren’t able to sell the vast majority of their inventory and have to offload the excess to networks and exchanges. The only reason there are so many ads is because there have always been so many ads.

Facebook has gone in the opposite direction. When it saw banner ads didn’t work…poof, it eliminated them. Talk about killing a sacred cow.

There is exactly one ad on the Facebook home page. It doesn’t shout at you. It’s just there. And when you interact with it, it doesn’t take you away from what you really want to be doing.

Relevance Is Irrelevant

While online targeting abilities certainly benefit advertisers, it’s interesting that the Facebook home page ads used by big brands on a daily basis are often served with only the broadest of targeting parameters, namely age and gender.

While Facebook can target your every interest, that’s not how major brands use the platform. They see it as a reach play. As I write this, my home page ad is for “Food Wars,” from the Travel Channel – same as yours, I bet. It’s only relevant to me in as much as I like to eat food and watch TV.

Leap of Faith ROI

I have no doubt that building a Facebook fan base has tremendous financial value, but the fact is that it’s hard to quantify that impact today.

And though Facebook has interesting metrics for brands to monitor, it doesn’t sell itself with a story about ROI (define) and measurable outcomes. It sells itself as the best way for brands to reach the masses, make a connection, and build long-term value through ongoing communication.

Facebook’s recent partnership with Nielsen does allow for measurement of the attitudinal impact of ads, and in the past week we’ve seen announcements from Webtrends and Omniture about new products that improve on marketers’ abilities to measure Facebook. But it’s still an imperfect science, as anyone who has tried to put a dollar value to a fan knows, and Facebook doesn’t seem to be overly motivated to open the platform up to the standard tracking used elsewhere on the Web.

To be fair to other publishers, Facebook is in a unique position. It’s become indispensable to brands because it’s become indispensable to so many people. It would probably not be an effective strategy for most ad sellers to de-emphasize ROI, for example.

On the other hand, it seems to me that the lesson about removing clutter is one that every publisher can and should replicate.

The most important lesson, though, is to try new things and be brave enough to walk away from things that aren’t working.