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Facebook May Lead to a New Kind of Targeted Search and Advertising


Prepare yourself: Automated friend and network experience-based advertising plus reviewing is coming!

Almost everyone has an opinion on Facebook (FB) and its IPO, even non-investors. All sorts of discussions abound regarding the actual valuation of Facebook, and its fight against Google (GOOG) and other emerging companies.

As Apple's (AAPL) late, great Steve Jobs would have said, "Tomorrow's Facebook is in someone's garage right now!" There is buzz about the monetization of the "Internet of things" vs. the "Internet of people," as well as the acquisition of Instagram by Facebook.

It occurred to me that the issue is not Facebook (people) versus Google (things). Some have said that Facebook leads in capturing revenues tailored to people's tastes while Google leads in capturing revenues on things being sold. Regardless of the argument , I believe that the "Internet of people" is about to become a lot smarter. And even more automated and intuitive. It will be Facebook plus Google plus...everything else.

I am lucky to currently live in St. John, VI, and am equally lucky to travel a lot. I was recently looking at offers from the Mandarin Oriental hotel. Some nice promotions tempted me and I toyed with booking, then procrastinated, and enjoyed comparing the various options. Since then, I have been seeing countless Mandarin Oriental ads on the pages I surf no matter what the topic is on the page, from finance to technology, foreign news sites and economic analysis. It's simply amazing.

While taking this experience to a conclusion, it led me to wonder if we will soon see new evolutions in tailored advertisements similar to the following situations:
  • We surf pages and we have "friends" (Facebook or Google+) recommending places to us: "Hey, you looked at Mandarin; I went there, and I loved it!"
  • We go to travel or product sites such as TripAdvisor (TRIP), Yelp (YELP), and Amazon (AMZN), which feature reviews. Instead of scanning through hundreds of reviews, reviews from our "friends" pop up: "Hey, you're looking at that? I bought it, and it stinks!"
  • We create filters of similar friends to start using reviews on e-commerce sites. These sites give us a chance to choose reviewers whose demographics match ours.
Lastly, in that way, monetizing Instagram is possible and easy. Figure a CPC (cost per click) per picture taken over one, five, and 10 years. How much would that be? What about creating automated filters (like "Google Goggles" - now, that would be ironic!) to filter Instagram pictures? Then, when I search "Mandarin Oriental," I might get a response that says, "Hey, I am your friend -- here's the picture of Mandarin Oriental Las Vegas. Go there -- it rocks!"

Advertising, searches, filters, and social media are bound to come together. (See: Mobius Strip.) It's only a matter of time before algorithms dig into our social media pages and sort through our friends' tastes to help us make decisions. Advertising is going to change in ways we have not yet seen in terms of friends, networks, filters for reviews, and advertising. Instagram and pictures will likely be monetized. It does not matter who leads that change (Google+, Facebook, or Twitter) but it will happen.

It is impossible to predict whether Facebook will remain the biggest name in social media, but it is almost a certainty that the company will continue to surprise us. It can afford to pay geniuses, and this will only serve to further improve on everything Groupon (GPRN), Yelp, and Travelzoo (TZOO) pioneered.

Prepare yourself: Automated friend and network experience-based advertising plus reviewing is coming!

This article was originally published on See It Market.
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