Facebook has gotten a lot of flack for its misdirected contextual advertising. Advertisers on the site have access to personal demographic data, and they don't always use it wisely. (Hello free laptop offers that randomly use age and location data!)
Poorly targeted ads are bad for Facebook's fledgling ad products, and the company has announced that it will start cracking down on demographic data abusers. Today, ClickZ has some details on Facebook's plans. Marketers may not be exciting to see what the social network is getting rid of, but Facebook is keeping an eye on its longterm business model.
Facebook's innovative self-service platform might be bringing in a lot of money, but showing consumers poorly targeted ads is bad for business. As The New York Times recently wrote:
"On social networks like Facebook, where people go to communicate with one another, advertisers seem to be trying especially hard to intrude on the conversation."
Facebook is aware of the problem and now has an evaluation program designed to seek out and discard ads that utilize user data that is not relevant to the product on offer. The new process will be part digitized and part human.
Facebook is still keen to have well-targeted ads on its site, but aggressive marketers targeting users with irrelevant ad copy are going to feel the hurt. According to ClickZ:
"Ads that are legitimately either locally targeted, gender-specific, or aimed at an age demo will apparently not get struck down while going after those audience segments. However, ads submitted with arbitrary profile-based copy - such as "37 and male in Los Angeles?" - have been met with rejection, some marketers say. A similar system is being used to weed out ads that incentivize a click-through (e.g., "Get A Free Laptop!") but do not deliver on the promise for several pages - if ever."
This makes a lot of sense for the social network, as ads on the site need to be relevant to grow in value. The new changes won't affect large brands advertising on the social network, but they will have a negative impact on smaller advertisers, who find that these tactics work pretty well.
Dan Sommer, CEO of Caridan Marketing Labs, tells ClickZ:
"If I can call out [in an ad] that you are a male in New York, that is a major driver for click-through rates. Because they are not allowing that anymore, [the ads] are going to be a little bit less engaging and relevant."
But if a product is actually relevant to a user's age and location, it will still make it through Facebook's system. And for consumers to start paying attention to the little Facebook ads on their pages, they have to be consistently pertinent.
As I noted earlier this month, consumers easily tune out advertising online, and irrelevant ads on Facebook encourage that behavior.
The problem of course is that self-serve ads are part of why Facebook is expected to bring in $1.1 billion in revenue this year. Turning away small advertisers could have a negative impact on the company's bottom line this year. But if Facebook wants to deliver on its promise of relevant social ads, it needs to help advertisers create useful ads. And this is a step in that direction.