Facebook admits that it shares user activity data with advertisers. Further it states that there are plans to share data both inside and outside the Facebook network.
Sharing data with web-sites outside the network is a big part of Facebook’s revenue growth strategy. The enormous amount of data collected on users likes and dislikes
is a potential gold mine for the company.
The company needs a winning revenue strategy to bolster its 30 billion market capitalization. Its click through rate for traditional ads is poor at best and a winning mobile strategy is badly needed to keep wall street happy. Using Facebook data to target external ads on outside web-sites could generate substantial revenue growth for the company, if handled properly. Using data in this manner will substantially change the company’s privacy policies.
The external add network model has already been proven by Google with its AdSense program. An external add network for Facebook has the potential to double its revenue
from $5B to $10B annually. Some experts feel the revenue potential is even greater if Facebook can attract enough advertisers with the targeted data. The company’s privacy
policies allow the data to be used in this manner, according to it’s chief privacy officer.
The data collected by Facebook on user behavior has enormous potential for advertisers to target prospects with ads on line. Target advertising is essential for selling online. It is how targeted traffic is driven to web-sites where people find products and services they want and need. People need to be steered or attracted to a web-sites where they will find products and services they are likely to buy. Facebook maybe able to effectively compete with Google for ad dominance with the data it has on its users online habits. Relafen ads based on data is a proven successful ad strategy for online advertising. Reaching billions of people effectively online has enormous potential for online marketing efforts.
In order for Facebook to take full advantage of its data is must navigate off of its original mission. It must act more like a search engine than a social network by providing relevant information to its users rather than just social information. Wall street should be quite happy that Facebook intends to use the enormous amount of detailed data it has collected to make large amounts of money. Now that Facebook is a publicly traded company it needs to grow its revenues to keep investors happy and to attract new investors.