ROBERT SIEGEL, host:
With every keystroke on the popular social networking site Facebook, users leave behind a goldmine of information - personal information, photos, postings of their likes and dislikes, whether it comes to movies or food or friends. Well, Facebook now wants to use that information to better connect small advertisers with its users and to make some money while they're at it.
Here to explain how this new marketing system would work is the editor of Advertising Age, Jonah Bloom. And Jonah Bloom, how would advertisers actually target users of Facebook?
Mr. JONAH BLOOM (Editor, Advertising Age): I think the plan that's Facebook's hatching is basically to create an automated system that serves the ads against members' profile information. So it would direct relevant text advertising message to that user's news feed. It's going to serve that information based on your taste and based on, you know, what you are declaring your interests in.
SIEGEL: So somehow somebody going to Facebook admits online to an interest in pizza and suddenly pizza ads appear under your…
Mr. BLOOM: Right. That's exactly it. If you're, you know, really interested in getting information on pizza, then you've possibly signed up for a pizza news stories and you're sharing pizza information with your friends. You know, and the same might apply if you're a big skiing fan. If you're sort of talking to your friends about skiing and your profile information declares various different resorts as your favorite places to go, then the chance are you're going to start seeing ads from ski equipment manufacturers.
SIEGEL: Is it a potentially lucrative form of advertising?
Mr. BLOOM: I mean, I think, if you look at the success of Google to date, I mean, large parts of Google's revenue comes from that kind of serving of information against users' specific interests. So I'm sure advertisers are going to be very, very interested in Facebook. I mean, it really is - it's the social network of the moment. It's got a huge audience. It's an audience that advertisers are always keen to target. And up until now, they've only had these very general ways of doing it. So yeah, I certainly think it's going to be lucrative.
SIEGEL: Now, another much-visited Web site is introducing a new advertising scheme, I gather, that's YouTube. Is that similar to what Facebook is doing?
Mr. BLOOM: No, it's not similar actually. In this case, it's actually more of a sort of traditional sales model in the sense that they're just offering advertisers the chance to run a kind of flash-based video ad and it will appear sort of across about 20 percent of a YouTube video screen. And if the user clicks on that, then it will pop a full screen and enable a longer-form video ad. And the sort of early results are that consumers seem to be sort of okay with them and they're getting some pretty good click-through rates.
SIEGEL: On the Internet, is it just assumed that wherever you go, your information will be mined and you'll be subjected to every sort of advertising imaginable? Or can you opt out of these things? Or if you've signed up with a particular site, will the site honor the terms on which you initially signed up or they have to notify you that they're changing those terms?
Mr. BLOOM: I think that the Internet's a very, yeah, it's a very interesting place like that. I mean, it's often described as a Wild West and I think there are two ways in which this does end up being regulated. Firstly, I think consumers are pretty savvy. They know that they are leaving a trail of information. And I think the advertisers have to be pretty careful about how they use that. They can end up with a lot of negative publicity themselves.
I think the other thing with the Internet is that as fast as advertisers devise ways of targeting consumers, technologies emerged that allow consumers to block messaging that they don't want to receive. And I'm sure that Facebook - and I think we've recently seen it with YouTube as well - are very sensitive to the fact that if they're too intrusive, you'll quickly push off elsewhere. There'll be another social network at the moment if users feel like Facebook is taking advantage of them.
SIEGEL: Well, Jonah Bloom, thank you very much for talking with us.
Mr. BLOOM: Thank you.
SIEGEL: That's Jonah Bloom who is the editor of Advertising Age. He spoke to us from New York.
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