The Facebook Chart That Freaks Google Out(allthingsd.com)
allthingsd.com
The Facebook Chart That Freaks Google Out
http://allthingsd.com/20110926/the-facebook-chart-that-freaks-google-out/?mod=tweet
13 comments
I'm not trying to be deliberately obtuse, here, but would you please clarify where the money is, there?
Facebook can create a demographic profile of its users by observing (spying) on users' browsing behavior. Advertisers will pay more for targeted demographics, e.g. women over 40 who read Martha Stewart and travel often.
For those with their own ad network the obvious benefit is in better targeting of customer's ads to users. The more clicks they get the happier the customers are and the more money they make from their cut of the ad spend.
They also provide a lot of tools to view and examine the data to the advertisers so they can tailor their ads in some way. Most of the times you click one of these ads your user_id or email is sent to the advertisers and they can make pretty good use of that data as well.
That's the obvious one but they also sell the data to market research companies who analyse it and package it up for resale as "customer engagement profiles" or some other euphemism for poorly anonymized user tracking data.
I have no experience with Facebook here but with Google and Yahoo there is an understanding between big advertisers and their account reps about API abuse. Someone's personal credit card rents a few VPS's and some perl scripts start pulling in everything they can and even if they go over the API limits by a few orders of magnitude they never get blocked.
For any ad network or other service provider who has a resource like an ad unit or a like or +1 button everywhere on the web and can track people, the user tracking data is a major revenue stream, both for internal use and external.
They also provide a lot of tools to view and examine the data to the advertisers so they can tailor their ads in some way. Most of the times you click one of these ads your user_id or email is sent to the advertisers and they can make pretty good use of that data as well.
That's the obvious one but they also sell the data to market research companies who analyse it and package it up for resale as "customer engagement profiles" or some other euphemism for poorly anonymized user tracking data.
I have no experience with Facebook here but with Google and Yahoo there is an understanding between big advertisers and their account reps about API abuse. Someone's personal credit card rents a few VPS's and some perl scripts start pulling in everything they can and even if they go over the API limits by a few orders of magnitude they never get blocked.
For any ad network or other service provider who has a resource like an ad unit or a like or +1 button everywhere on the web and can track people, the user tracking data is a major revenue stream, both for internal use and external.
Theoretically, fine-grained targeted advertising is the money. To get to that fine grain, you need lots of Stasi-like data. That's the tough part, unless you're FB. The other half (algorithms) can be continually iterated and improved by throwing math/CS/physics PhDs at the problem.
Now if only it was easier for said PhDs to get access to said data.
Actually, on second thought, that's a bit horrifying.
Actually, on second thought, that's a bit horrifying.
Ad networks, research companies and domain parking companies will kill to get PhD's on staff to do those kind of optimization problems.
They pay well but the good ones never stay long as the job is pretty boring for someone with those skills, it's really just a few problems that need to be solved over and over to the 10th decimal place because slight improvements in results mean lot's of real dollars.
They pay well but the good ones never stay long as the job is pretty boring for someone with those skills, it's really just a few problems that need to be solved over and over to the 10th decimal place because slight improvements in results mean lot's of real dollars.
Optimization, bleh.
Mining the tar out of Facebook's rather Orwellian data set? FUN!
Mining the tar out of Facebook's rather Orwellian data set? FUN!
Look at the fundamentals:
Facebook has a shit-ton of information about you already. It knows your social graph, it knows what you "like", it knows your name, it knows your relationship and job status, it knows your religion, it knows your age, it knows your education, it knows your phone number and address. These are things you may have explicitly told it. It now also knows a significant fraction of your browsing history. Web-savvy folks with a solid business sense know how that sort of information can be easily monetized.
Consider what Facebook can easily determine from the information it explicitly knows: your income, debt level, and credit rating; your family size (and stage); your job satisfaction; your relationship satisfaction; your hobbies; your fetishes; every single one of your buying patterns. Facebook can not only determine a better set of ads to present to you on facebook.com it can resell information elsewhere to others so they can present better and more effective ads/deals on potentially every site you visit and offers you receive in the mail and through other mechanisms as well.
A hypothetical example: facebook is able to determine that you are a gainfully employed person with a much higher than average income and no children, they can also tell that you "like" a lot of things about motorcycles, you visit motorcycle news sites and web forums several times a week, you visit motorcycle manufacturer pages often. How valuable is that information to a local motorcycle dealership?
Facebook has a shit-ton of information about you already. It knows your social graph, it knows what you "like", it knows your name, it knows your relationship and job status, it knows your religion, it knows your age, it knows your education, it knows your phone number and address. These are things you may have explicitly told it. It now also knows a significant fraction of your browsing history. Web-savvy folks with a solid business sense know how that sort of information can be easily monetized.
Consider what Facebook can easily determine from the information it explicitly knows: your income, debt level, and credit rating; your family size (and stage); your job satisfaction; your relationship satisfaction; your hobbies; your fetishes; every single one of your buying patterns. Facebook can not only determine a better set of ads to present to you on facebook.com it can resell information elsewhere to others so they can present better and more effective ads/deals on potentially every site you visit and offers you receive in the mail and through other mechanisms as well.
A hypothetical example: facebook is able to determine that you are a gainfully employed person with a much higher than average income and no children, they can also tell that you "like" a lot of things about motorcycles, you visit motorcycle news sites and web forums several times a week, you visit motorcycle manufacturer pages often. How valuable is that information to a local motorcycle dealership?
For those that are worried about it(which should be pretty much anyone) this is an extension that claims to block all other sites from gleaning your fb credentials. Probably a good idea to do. The code is on github if you want to extend it.
http://webgraph.com/resources/facebookblocker/
http://webgraph.com/resources/facebookblocker/
Does Facebook's privacy statement state that they don't track "logged out" users? Logging out of Facebook does not delete all facebook.com cookies (let alone any web beacons from covert domains Facebook might use), so they could technically still track users.
I just deleted my facebook.com cookies. Visiting facebook.com login page issued me 5 cookies. Logging in issued 31 (!) additional cookies. Logging out and restarting my browsing (to clear session cookies) left me with 3 cookies. And those 3 cookies have suspicious names like "datr" and "lu" (Log User?) with obfuscated hash values.
I just deleted my facebook.com cookies. Visiting facebook.com login page issued me 5 cookies. Logging in issued 31 (!) additional cookies. Logging out and restarting my browsing (to clear session cookies) left me with 3 cookies. And those 3 cookies have suspicious names like "datr" and "lu" (Log User?) with obfuscated hash values.
:( This meme has been refuted so many times I don't know what else to do. We do not track logged-out behavior. The datr cookie is for phishing and spam protection.
http://www.facebook.com/help/?faq=186325668085084
http://www.zdnet.com/blog/facebook/facebook-denies-cookie-tr...
I like how it's "denies allegations". Stay classy, zdnet.
http://www.facebook.com/help/?faq=186325668085084
http://www.zdnet.com/blog/facebook/facebook-denies-cookie-tr...
I like how it's "denies allegations". Stay classy, zdnet.
How would anyone know that? If any personally identifying cookies remain you could.
And personally, from my corporate experience there's a good chance that you're simply lying to us here and a better chance that you're telling us what you think the truth is but have been lied to yourself.
For instance, the FAQ directly contradicts the Wall Street Journal. You and the FAQ say no logged out info is collected, the article says exactly otherwise.
> WSJ: Facebook acknowledges that it gets that data [from logged out users] but says it deletes it right away.
Oh, I see. You do track them. But, you don't inhale...
Even if we believed you, by collecting that data you change the game entirely. Now you can be legally required to log data from a specific user which you couldn't if the system wasn't in place.
Stay shifty, Facebook.
And personally, from my corporate experience there's a good chance that you're simply lying to us here and a better chance that you're telling us what you think the truth is but have been lied to yourself.
For instance, the FAQ directly contradicts the Wall Street Journal. You and the FAQ say no logged out info is collected, the article says exactly otherwise.
> WSJ: Facebook acknowledges that it gets that data [from logged out users] but says it deletes it right away.
Oh, I see. You do track them. But, you don't inhale...
Even if we believed you, by collecting that data you change the game entirely. Now you can be legally required to log data from a specific user which you couldn't if the system wasn't in place.
Stay shifty, Facebook.
If you cannot entertain the possibility that employees of the company who work with the code in question are telling the truth, and put more faith in a paraphrase by a journalist, then we don't have much common ground to have an intelligent and respectful discussion.
Many large web services, for instance Google's Plus button, appear to work in exactly the same way with logged-out cookies. This is something you can easily test yourself. When asked, these companies make exactly the same statements about how this data is and is not used. All of the speculations in your last paragraph would seem to apply equally, though I personally don't put much credence in them.
So the question is unfortunately not one of facts, but of trust and feelings. Beyond telling the truth as far as I know it there's not much else I can do. FWIW we don't make evil plans down in the old volcano lair.
Many large web services, for instance Google's Plus button, appear to work in exactly the same way with logged-out cookies. This is something you can easily test yourself. When asked, these companies make exactly the same statements about how this data is and is not used. All of the speculations in your last paragraph would seem to apply equally, though I personally don't put much credence in them.
So the question is unfortunately not one of facts, but of trust and feelings. Beyond telling the truth as far as I know it there's not much else I can do. FWIW we don't make evil plans down in the old volcano lair.
Google has G Analytic and now G+. Logged in or not they have the IP.
But the chart is about time spent online
But the chart is about time spent online
Strange - you insert an apostrophe and thus write "it is user profile" but leave it out of "facebook's perspective" where is needed. I can't work out why apostrophic abuse is so popular.
For me, it's that muscle memory will take over while I'm typing fast and thinking about something else. It's a really annoying habit I've developed.
I normally catch them when I read back the comment and think "glad I caught that, I would have looked stupid" ... not this time apparently.
I normally catch them when I read back the comment and think "glad I caught that, I would have looked stupid" ... not this time apparently.
Yes, people spend a lot of time on FB but how much of it converts to revenue? Google could be converting visitors to revenue faster than what FB could be. Say, I search for a .is domain registrar, I click on the ad which seems to be selling it the cheapest and I leave Google. My short visit was converted to revenue and converted quick. On the other hand, I go to FB not to look for anything specific but only checkout what other people are sharing or share something myself. I think the way I use FB, since I'm not looking for anything specific, I have a lesser inclination towards clicking on a link which is trying to sell me something. Google could show me links to stuff I was looking for making it more likely for me to click on them. (Yes, there are gamers who buy credit but I'm not one of them and not suitable to comment there. But from what I remember, it's not a significant share of FB revenue - but I may remember very old stuff and I would be wrong today.)
What you explained is a very well known problem in marketing and advertising. It's not enough to be the "thing" the customer is looking for, you have to be there at the time they want to purchase. That is Google's greatest advantage: when you're looking to purchase something, you turn to search, not to social.
I see a couple of things happening though:
* Not all purchases are customer initiated, and based on the time users are spending on Facebook, they're in a much better position to capitalize on impulse and casual purchases.
* I've seen an increase in the number of friends who post "Hey, what phone should I get" and similar questions. This social behavior was commonplace prior to the advent of relevant, usable search. We may see a return to this leveraging of social knowledge for important purchases. Facebook has a significant advantage there.
Even with virtually zero effort, Facebook is going to begin to eat in to Google's territory, simply as a result of the sheer volume of eyes on ads. Right now, Facebook is continuing to focus on engaging users. They're digging deep roots in to our lives, and appear to be focusing on partnerships that aren't ad-related right now. These partnerships are also in markets that are inherently social. Music, for example, is a very social product. It makes perfect sense for Facebook to form strong partnerships there.
It's difficult to say when (or if) Facebook will focus on general advertising as a revenue stream. They certainly have a product, but I don't know how effective it is. I've seen a fair number of anecdotal write-ups that suggest it doesn't work all that well, but for individuals with a rational, causal mindset, advertising frequently "does not compute", so it's hard to say if there isn't significant bias there.
I see a couple of things happening though:
* Not all purchases are customer initiated, and based on the time users are spending on Facebook, they're in a much better position to capitalize on impulse and casual purchases.
* I've seen an increase in the number of friends who post "Hey, what phone should I get" and similar questions. This social behavior was commonplace prior to the advent of relevant, usable search. We may see a return to this leveraging of social knowledge for important purchases. Facebook has a significant advantage there.
Even with virtually zero effort, Facebook is going to begin to eat in to Google's territory, simply as a result of the sheer volume of eyes on ads. Right now, Facebook is continuing to focus on engaging users. They're digging deep roots in to our lives, and appear to be focusing on partnerships that aren't ad-related right now. These partnerships are also in markets that are inherently social. Music, for example, is a very social product. It makes perfect sense for Facebook to form strong partnerships there.
It's difficult to say when (or if) Facebook will focus on general advertising as a revenue stream. They certainly have a product, but I don't know how effective it is. I've seen a fair number of anecdotal write-ups that suggest it doesn't work all that well, but for individuals with a rational, causal mindset, advertising frequently "does not compute", so it's hard to say if there isn't significant bias there.
100% agreed.
also fb has so many hits, they´re selling their ads for quite little money. the average amount of hits to get 1$ revenue would be more interesting
It's true that FB hasn't found a way to convert the time spent on it to revenue the way google has, but facebook will still make a lot of money selling targeted display ads in the short term. They'll do this while stealing market share from content companies like Yahoo, AOL, etc.
The money from display ads will give facebook a lot of money and time to come up with a better way to market using the social data they have.
The money from display ads will give facebook a lot of money and time to come up with a better way to market using the social data they have.
According to this line of thinking, Google has spent the past 5 years being freaked out by Yahoo.
Of course they haven't. I think Google's Facebook envy has everything to do with the data Facebook is amassing -- not with time spent on their service.
Of course they haven't. I think Google's Facebook envy has everything to do with the data Facebook is amassing -- not with time spent on their service.
According to this line of thinking, Google has spent the past 5 years being freaked out by Yahoo.
Not necessarily, I think what is important here is the slope of Facebook's line, not its overall y-value.
Not necessarily, I think what is important here is the slope of Facebook's line, not its overall y-value.
I have trouble understanding why this graph would freak google out.
The more time I spend on google sites the less time I'm spending on sites I reached through google ads.
The more time I spend on google sites the less time I'm spending on sites I reached through google ads.
This chart isn't suggesting that more people are clicking on Google ads.
Facebook is a direct competitor with Adwords. Besides, the more time you spend on Google sites, the more of Google's ads you're exposed to. The steepness of Facebook's curve is very likely to freak Google out.
Facebook is a direct competitor with Adwords. Besides, the more time you spend on Google sites, the more of Google's ads you're exposed to. The steepness of Facebook's curve is very likely to freak Google out.
Google and Facebook are competing for ad dollars, but different ad dollars. Google has search advertising pretty much locked. Facebook has figured out brand marketing. Google has been trying to crack that nut for years with AdSense, but Facebook's built-in demographics and time on site looks like they figured it out.
I think commenter's are right. Time on site won't hurt Google's core ad market.
I think commenter's are right. Time on site won't hurt Google's core ad market.
The steepness of Facebook's curve is very likely to freak Google out.
Facebook looks likely to exceed 200% in just a few years!
Facebook looks likely to exceed 200% in just a few years!
Your comment made me laugh, but in seriousness, FB might be causing people to spend more time than they used to online, so that 200% number is, in a certain sense, not implausible.
Exacty. Between now and then is when things will really get interesting.
Anyone think about the fact that Google has spent years becoming a minimalist for search effort and user experience, making results faster, more accurate, predict better, and be more painless... In short, they make a users experience and interactions with the site quick, almost transparent. Get in get out! Predict and find my results before I'm even done typing and show me the entire site before hitting "search". Now take other sites, how long does it take to find anything on facebook?... for ever, you have to dig and filter, and look and check... Its painful. I know it does not amount to much more than an observation but all that extra time spent does not reflect usefulness or effort on the users side. Id like to see a CPM comparison chart for popular sites!
That's the old Google you're talking about.
"Note that just a couple of years ago, someone might have thought to include Myspace in here. Remember?"
and facebook, not being fundamentally different to myspace, could easily be victim to the exact same thing. google, however, is sufficiently diversified to be much more resistant to user fickleness (firefox spellcheck says that's a word).
and facebook, not being fundamentally different to myspace, could easily be victim to the exact same thing. google, however, is sufficiently diversified to be much more resistant to user fickleness (firefox spellcheck says that's a word).
Is it just me, or is a monochrome only chart a really bad way to present this information? It requires effort to decode.
Stupid chart, huge difference here. Google has the advantage of knowing what a user wants when they are searching for it. Facebook is always pushing ads when users are looking to stalk people's photos.
Not to mention that Google is in the business of sending you away from their website; hopefully through an ad link.
If users are spending more time on Facebook, one could extrapolate that they are spending less time clicking on ads. The exact opposite of what Google wants.
If users are spending more time on Facebook, one could extrapolate that they are spending less time clicking on ads. The exact opposite of what Google wants.
These comparisons are a bit silly. They do not do the same thing. We should use this graph to compare Google to Yahoo and AOL and see how they fare against their competitors, not how many of their users spend 18 hours on Farmville.
Considering Facebook and Google are both advertising-funded companies, I don't see what the concern is.
Start showing me slope on advertising revenue or momentum with major advertisers and I'll take notice.
Google's core market (search advertising) just had a new fence put up (Google+), which seems to be doing a good job keeping Facebook from marching right on in (social search advertising).
Facebook's ad-market strength is display advertising. This is a much smaller piece of the pie, and they don't completely own it, but they're making inroads. I expect Yahoo/AOL are much more worried about this than Google.
Start showing me slope on advertising revenue or momentum with major advertisers and I'll take notice.
Google's core market (search advertising) just had a new fence put up (Google+), which seems to be doing a good job keeping Facebook from marching right on in (social search advertising).
Facebook's ad-market strength is display advertising. This is a much smaller piece of the pie, and they don't completely own it, but they're making inroads. I expect Yahoo/AOL are much more worried about this than Google.
I wonder what would happen if google blacklisted all facebook.com URLs. when I search for things, the first or second link is usually a company or fan FB page and if those were removed from Google's index, I wonder if that would have any affect on this graph.
Another thought, FB has become my IM... I spend a majority of time on there chatting, not clicking from page to page so FB's display ad's would be mush less effective to users like myself because the time I spend using there platform to IM is irrelevant/less valuable in relation to google sites.
Another thought, FB has become my IM... I spend a majority of time on there chatting, not clicking from page to page so FB's display ad's would be mush less effective to users like myself because the time I spend using there platform to IM is irrelevant/less valuable in relation to google sites.
It took me a minute to figure out how facebook gained so much traffic without a commensurate decrease in the other sites.
My take-away is that facebook has mostly vacuumed up MySpace traffic (which was conveniently omitted from the chart).
My take-away is that facebook has mostly vacuumed up MySpace traffic (which was conveniently omitted from the chart).
For the sake of argument lets say time spent on line = revenue. This picture shows us top line numbers. What about costs? I suspect that Google's cost for delivering content is markedly lower than Facebook's.
Every time you visit a page with any kind of facebook integration (like button or whatever) facebook adds your online behaviour to it's user profile.
Ideally, from facebooks perspective, everyone would always be logged in to facebook and all pages would have a like button, then they can track everything everyone does on the web. That's why the stickiness thing is important, not just because active users are less likely to quit.
This is how you monetize a free social service.