What Facebook Learned from Search

The most striking word that came up repeatedly when I heard someone from Facebook present was algorithm. Its the algorithm that determines how many stories appear in the News Feed, which users members share connections with, and which types of actions are involved. It knows which friends youre most closely connected to, not just based on how you interact with them, but by factoring in when you and your friends independently interact with the same content. This algorithm might know who your friends are better than you do.

Facebook creatively refers to the area to the left of the News Feed (and any other page) as the Ad Space. The major difference between the Ad Space and paid search is that theres no mistaking that the Facebook ads there are in fact ads. Whether with search ads or even contextual links, its sometimes hard for consumers to discern where the content ends and the ads begin. Few consumers should have any confusion on Facebook. For more on Facebook ads, see the previous columns on ad targeting by interest and member responses to targeting.

Paid Inclusion: Sponsored Stories

Paid inclusion has served as the hybrid blend of natural and paid search results. With search, paid inclusion links are never labeled as ads, as the engines that have offered this (Yahoo being the longest-standing advocate) have said sites only pay to get included, not to improve their ranking. With Facebook, Sponsored Stories appear in the News Feed and are clearly labeled as sponsored, but they reap many of the same benefits as organic News Feed stories. Sponsored Stories also include Social Ads, which appear when a members friend interacts with an advertisers Facebook Page or Application.

Now What?

One of the classic questions with search engine marketing is how to prioritize using natural and paid search. With Facebook, those questions are even more challenging, since its harder to determine the return on investment (if you get 10,000 people to add your Facebook Page as a friend, whats that worth?) and best practices are just starting to emerge.

The cheapest options are the self-service ads, which can be tested on shoestring budgets, especially when limiting their placement to the Ad Space (running them as Sponsored Stories requires significantly higher bids) and Facebook Pages, which are available for free but must
be promoted somehow (Facebooks preference: through advertising). Pages, if done well, also require evelopment resources, just like Applications, and Pages require even more management resources in terms of monitoring comments and updating the page. The immediate goal is to attract more clicks by going viral and appearing in members News Feeds. The process shares much in common with search engine optimization.

Facebook draws inspiration from search engines and how marketers use them, but Facebooks not trying to be Google. Google, after all, is best at sending its users to other sites. While Facebook can do that with Beacon, it is much more interested in drawing its members deeper into Facebook and emerging as the newest portal.

So who is Facebook trying to be? Can you think of any portals that became a major name in search while experimenting with their social
media strategy, one that still offers paid inclusion, and one that, like Facebook, is repeatedly rumored as a takeover target for Microsoft? Thats the company that needs to worry about getting outfoxed by Facebooks algorithm.

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