Facebook is hard at work serving personalized advertising to its users, and the network’s popular self-serve ad platform is a big part of its planned $1 billion in revenue for 2010. But it doesn’t take a long visit to the site to see that those ads aren’t always on target.

Today The New York Times looks at the ongoing problem of misdirected Facebook ads. Facebook’s platform is still relatively new, but its personalized approach to display is not always so personalized.

According to The Times:

“The so-called self-service ads on the site, from the likes of video
game start-ups, herbal supplement makers, sweepstakes companies and
wedding photographers, are shown on the right side of most pages. Many
advertisers who use the self-service system are tempted to go as far as
possible in making ads that attract attention and appear relevant,
aided by the information that people give to Facebook.”

Unfortunately, that often means users get hyper-targeted for their demographic information and interests. Men who are pushing 40 get ads that offer to help them lose weight, fight baldness and last longer in bed, while any woman who changes her status to engaged is sure to get bombarded with wedding planning ads.

And for users who do not provide extensive data on their profiles, that often means getting mistargeted (as with the ad above for moms that I was served).

Facebook says that as time progresses, it will get better at serving advertising. From The Times:

“Dan Rose, vice president for business development at Facebook,
compared the company’s self-service ad platform to the early versions
of Google’s
highly profitable AdWords system. He predicted that the quality of the
promotional messages on the site would improve as more companies began
to use it.

“A year ago, we had lower-quality ads, and a year from
now we will have higher-quality ads,” Mr. Rose said. “It’s early, but
we have made a lot of progress.”

But the idea of serving ads based on profile information will unavoidably lead to marketing noise on the network. Times writer David Gallagher decided to conduct a Facebook experiment:

“I realized I had posted almost no information about my favorite
bands, hobbies and so forth, making it hard for anyone to focus on me.
So I beefed up my profile with a keyword bonanza: surfing,
snowboarding, skateboarding, knitting, cooking, Xbox, Star Trek, Star
Wars, Harry Potter and so forth. (Keywords are for experimental use
only and do not reflect actual interests. Except maybe Star Wars.)
This produced some quick changes. Among other customized ads, I
started getting the surfing- and cooking-themed campaigns shown above.
In fact, foodies seem to be a big target for Facebook advertisers. But
there were still plenty of junkier ads, like the Oprah one, which would
seem to violate Facebook’s policy regarding the need for
some connection between the image and the product being advertised.
Unless Oprah is in need of debt relief.”

Stowe Boyd suggests that Facebook simply ask users what sort of marketing messages they’d like to receive. That route towards consumers is difficult because consumers often attempt to refrain from all advertising when
given the choice. And they often aren’t aware in the abstract of what ads they might find useful.

But another route is to make ads on the social network more social. Boyd writes:

“Why can’t ads — good ones, ones that actually offer value for
possessing them, like discounts or exclusive time-limited offers —
become social objects that increase in value by being passed around?
Why can’t discounts increase, for example, when many of my friends pass
the same offer along to me?”

One of the strengths of social networking is the power of the social graph, and utilizing users’ friends to share marketing could be great for brands. But Facebook is wary about putting ads in places where they are not clearly distinguished.

For instance, an Ikea contest last year that gave away products when consumers tagged them in pictures on a Facebook profile was a great way to use Facebook’s sharing capabilities, but ran afowl of Facebook’s terms and conditions.

Meanwhile, ads that are based on behaviors fare much better. And Facebook is fully capable of serving them. Bing ran an in-game Farmwille ad on Facebook this week that offered users 3 Farm Cash (FarmVille’s virtual currency) if they became a fan of Bing. In two days, Bing went from having about 100,000 fans to over 500,000.

By targeting users where they are and offering them something they’d value, Bing was able to achieve its short term goal of growing its fan base on Facebook. It remains to be seen if those followers will enjoy or continue receiving marketing messages from Bing, but it’s certainly a step in the right direction.

Meanwhile, Facebook’s self-serve ads are clearly returning good enough results for
advertisers to continue to grow their spend on the service. By keeping detailed tabs on how different ads perform with different users, the network will continue to serve more relevant ads on the site. And there is plenty of room (and time) for growth.

However, consumers have gotten pretty good at avoiding display ads on other parts of the internet, and it’s a skill that is easily adapted to social networks.

As Times reader Deaon Jones writes:

“The
facebook ads are really bad so I taught myself to not even look in the
general direction. If facebook ever put anything useful in the right
most column I am sure to miss it.”

Images: Facebook