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Did Facebook's Beacon Hurt the Online Ad Industry?

beacon1.jpgVia Internet News, Seth Goldstein of SocialMedia.com spoke today at the Interactive Advertising Bureau's Conference in NYC, and had this to say about Facebook's Beacon debacle:

"Beacon was a setback not just for Facebook, but the whole industry."
Everyone agrees that Facebook and Beacon was one of the bigger stumbles in social networking history -- I can't recall Friendster or MySpace ever issuing a direct apology the way Facebook CEO Mark Zuckerbeg was forced to in the wake of the overly intrusive social app. But is Goldstein overstating the case?

Burned consumers certainly felt betrayed by Facebook -- I personally know of two people who either deleted their profiles or stopped using altogether after Beacon broadcasted their purchases -- but I'm not so sure the industry as a whole suffered a setback. What has happened is that the promise of social networking and its highly targeted advertising has failed to be monetized at anything close to the rate promised a year ago, and that is certainly a huge issue. But as marketers flail about, trying to figure out how to get in touch with consumers without angering them, a blunder like Beacon is almost needed by the online advertising industry as a helpful line in the sand put down by consumers: Don't tell everyone what I'm buying, no matter how helpful you may think it will be.

So what exactly is Goldstein's solution? Well, if may be very close to what I wrote about last week, where Catherine Taylor suggested that the best solution in social networks is the lowly banner ad. Wendy Davis at MediaPost, also at the IAB Conference, reported:

Goldstein, like other Web strategists, is trying to figure out the key to advertising on social sites. He said he's planning to soon launch a new type of ad platform, "Social Banners," soon, aimed at monetizing such sites.
(Facebook Beacon pic from Flickr user paul_irish, CC 2.0)
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