According to a Wall Street Journal report, the new system will “let marketers target users with ads based on the massive amounts of information people reveal on the site about themselves” with future development that is aiming to (in true Orwellian style…or should that Minority Report style) “predict what products and services users might be interested in even before they have specifically mentioned an area.”
Monetizing social networking platforms through advertising has been a hard task for a long time now. For example, although News Corp may be reaping revenues from MySpace today, most of those revenues comes indirectly, such as through the Google search deal. MySpace rates have previously been reported to be a small fraction of 1 cent CPM.
Facebook seems to be experiencing stronger advertising rates, with recent reports indicating that Facebook charges around $10 CPM. There is always scope to improve, and certainly the more upmarket demographic of Facebook should provide high paying advertising opportunities if and when the ad delivery is sorted out and well targeted.
There will be some who will question Facebook’s moves. Google has previously come under fire for delivering contextual advertising in Gmail based on the content of emails a user had received. Facebook is not only going to use user data and networking activities to deliver targeted advertising, they are going past that and trying to produce preemptive targeted advertising based on what they think you might want in the future.
If Facebook can create a system that accurately preempts user desires, it’s not unreasonable to consider that Facebook could easily become the next Adwords as well; not even Google can currently predict the future.