

Ads are no one-for-all revenue solution - ComNik
http://spotbloq.blogspot.de/2012/04/why-i-think-ads-are-no-one-for-all.html

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imjk
I think you're greatly underestimating the value of Google's content network,
and display advertising in general. While the majority of Google's ad revenue
still comes from search, Google's display advertising is sizable, and growing
quickly. In fact, it's the fastest growing advertising segment for Google,
having doubled last quarter to a $5B annual business from $2.5B annual
business just a year ago. The crazy thing about this is that while Google
“owns” the vast majority of web search advertising, they still only control
less than 10% of the webs display advertising.
Source:[http://adage.com/article/digital/search-drives-google-
displa...](http://adage.com/article/digital/search-drives-google-display-
ads-a-5-billion-business/232242/)

Remember, Google's content and display advertising technology is only in its
nascent stages relative to its Search technology. Display advertising
technology is a little trickier than search advertising, as search advertising
by nature of its use of keywords has targeting built into itself. Good display
advertisement targeting requires the conflux of accurate user data, accurate
interpretation of web content, and the understanding of advertisers goals. In
some regards, it seems Facebook has a much better system to meet these needs,
or at least, the potential for a better system.

On top of that, you also have to keep in mind the almost exponential growth
we’re seeing in mobile platform usage. I would posit that social applications
are going to make much better platforms for mobile advertising than mobile
search. Just anecdotally, consider the amount of time that you and your peers
spend searching on your mobile phones or tablets versus the amount of time you
spend say on Facebook or social new aggregators. I would assume your social
apps usage is much higher. Also, now consider from the user experience
perspective how poorly advertising on mobile search would be. The times you’re
searching on a mobile device is generally more often out of immediate needs,
and if a user is getting an advertisement in such a rushed condition,
especially with limited screen real estate, it’ll make for a much greater
inconvenience than being interrupted by an advertisement while browsing a
social app.

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ComNik
I think the problem with my point is, that the scale at which Google and all
these companies operate can compensate a lot of flaws in the business models.

And I dont really wan't to say that their Business Models are flawed, but you
have to admit that Google really has advertising figured out.

I could not think of a better example, but the focus of my concern are the
companies being built at this very moment, which seem to take advertising as a
solution to all their financial problems, if only they can get enough users.

Mobile is an interesting factor. I think this will be won by the company with
the best hyperlocal offering. Because this is in line with the whole idea of
mobile - being somewhere other than your home. Neither display, nor search ads
are really suited for mobile, who cares about some tax-management software
when they're sitting on a train.

Time will show who that'll be.

Thank your for your comment (:

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bradleyland
That's a pretty short view on Facebook's role in users' lives. Facebook
definitely has some challenges ahead, but advances in NLP and sentiment
analysis could be a boon for them. What happens when Facebook is able to use
their data set to extract implicit information about search subjects.

For example, I recently engaged in a discussion on Facebook with a friend who
is considering a career change. He had some questions about Linux system
administration career choices. Right now, that conversation is opaque to the
systems at Facebook. It has no meaning beyond the strings that are stored on
disk somewhere. What happens as NLP and sentiment analysis advance to the
point that they're able to extract real ideas from conversational threads?
Multiply that by 845 million active users.

In that scenario, Facebook is sitting on a gold mine of monumental
proportions. It's almost unimagineable the amount of data Facebook has. What
questions could be answered using that data? I can think of more than a few
inventive purposes for this data.

The fly in the ointment may end up being consumer privacy concerns. If the
government passes the right/wrong (depending on your view) legislation, it
could destroy Facebook or Google. Google didn't roll Google+ to have their own
social network, they rolled it for similar reasons as they did Google Voice.
They want the data.

I know it's common echo chamber fodder, but big data is the future.

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ComNik
Yes, this is exactly what I wan't. I'd love facebook to use their data to the
fullest, and I'd love to pay for such a search engine (mainly so, that they
dont need to sell my data). I hope this happens, and I hope they make alot of
money from that, keeping my feed/timeline/stream focused on my friends.

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javery
In 5 years Facebook will have a comprehensive search solution integrated with
Facebook to compete with Google and they will also have a Google Adsense style
ad network that uses the data they know about you to better target display
ads.

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ComNik
Yes, I thought about that. Maybe even something like Aardvark in big, who
knows.

And if they are able to execute search as well as connecting people, they will
and should become as or even more successful as Google.

But I'm hoping for more innovative business models, even though that is
unlikely.

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joelrunyon
The revenues are directly correlated to the click through rates for display
ads which are much more akin to what facebook is offering.

Separate out Google's search revenue and display revenue and you'll see
there's a big differentiation there.

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ComNik
This is true, but this is also my point. Google makes so much money because
theire business of search is perfectly aligned with ads (there is almost no
difference between a search result and an ad-result). Google's display ads are
not as 'successful', because I'm reading a blog or doing something else than
searching when I get into contact with AdSense. There is a huge difference
between my friend's status update and an ad (maybe Timeline can change this).

~~~
tissarah
I heard Google Plus's Vic Gundotra say the same thing at SXSW. There is
definitely a time and a place for ads, and while you're viewing intimate
social content might not be that time.

However... recently I've been seeing facebook ads where they are simply
reshowing old status updates from my friends where they have linked/liked
products, and pages. I'm not sure that reminding me of things my friends have
liked and linked to isn't a more meaningful advertising experience. It's
certainly not sufficient to support Facebook, but it feels like a new,
possibly more valuable, kind of ad.

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wisty
I've been saying this for a while. I got my idea from pg, who said that Yahoo
never realized that search traffic is the most valuable.

People with a problem pay for a solution. People looking for free
entertainment generally don't.

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dredmorbius
Plural apostrophe's are no one-for-all punctuation solution.

Just sayin'.

