We’ve been following the Facebook social ad controversy closely because it’s important to the future of advertising — including service provider ad strategies.
Today, Facebook turned its Beacon social advertising program from opt-out to opt-in — on an case-by-case basis. While many Web sites and online advertising approaches rely on tracking users to some extent, Beacon turned that tracking public by publishing the buying decisions that its users made out to their circle of friends. For instance, if a person bought a product on Overstock.com, all their friends would know about it too. The privacy concerns are obvious: what if you bought something embarrassing? Or purchased a holiday gift you don’t want your Facebook friends — including the one receiving the gift — to know about?
This has happened to Facebook before — in fact, successfully navigating a similar privacy brouhaha was crucial in helping the site grow to more than 50 million users. Last year, Facebook introduced its “News Feed” feature — the same capability that Beacon leverages — to automatically alert Facebook users about their friends online activities, such as posting a new photo or commenting on a page. Facebook users protested, and the site added new privacy controls to let users manage the information they shared. Today, the News Feed is a key feature within Facebook — in fact it would be hard to imagine the site without it.
Facebook is clearly hoping a nod to privacy will save Beacon as well. The site, along with participating partners, will require that users opt-in to sharing their e-commerce and off-site activities in their Facebook news feeds on a case-by-case basis. Previously, a pop-up box notified users of a potential data exchange and allowed them to opt-out, but it was small and disappeared quickly and if users missed it the information was automatically published. Facebook said it will not provide a universal opt-out for the feature, ensuring Beacon’s survival but ensuring at least some level of controversy may remains well.
So what’s the big deal? First of all, companies that rely on advertising should be thanking Facebook for continuing to challenge the online privacy status quo. The startup has enough good will to play the guinea pig and see how far it can go before users push back. Such efforts are required to explore the possibilities of advertising online. Facebook also should be applauded for the innovation of ad-related news feeds, which represent a unique new form of word of mouth or recommendation-based advertising, an ad-industry holy grail.
Beacon is an advertising 2.0 experiment we will continue to watch.
