NEW YORK--Standing in the front of a room packed full of corporate executives, journalists, and representatives from Madison Avenue's biggest advertising companies, on Tuesday afternoon Facebook founder Mark Zuckerberg formally announced the social-networking site's new advertising initiative, an ambitious program deeply rooted in viral trends and "trusted referrals."
Called Facebook Ads, the new program is threefold: advertisers can create branded pages, run targeted advertisements, and have access to intelligence and analytics pertaining to the site's more than 50 million users. Partners can participate in all three components of Facebook Ads, or a combination of them. "When you put this all together, you get some pretty amazing things," Zuckerberg said of the program, which he said took "four months or so" to develop.
Through the branded pages program, advertisers can design custom pages with information, content, and custom applications--"any application that was written for users on the Facebook Platform," Zuckerberg explained. Facebook users can sign up as "fans" of that brand, install branded applications, and other activities that will all show up in their profiles' "mini feeds" and on the "news feeds" that are broadcast to their friends lists.
"When people engage your page on Facebook, that's going to spread information about your brand virally through the social graph," Zuckerberg said. "It becomes a trusted referral."
And with a "Beacon" application, this can connect to advertisers' external homepages, which Zuckerberg demonstrated by pretending to sell a pair of Adidas sandals (his trademark, which he had notably forsaken for a pair of closed-toed shoes during Tuesday's announcement) on eBay; a Facebook window popped up and asked if he wanted to share news of the sale on his Facebook profile.
Additionally, Facebook has unveiled targeted advertisements that will allow marketers to target by any information inside Facebook profiles, from relationship status to favorite television shows. Zuckerberg demonstrated the interface by targeting a hypothetical running shoe ad toward women aged 18 to 30 in New York who have listed "running" among their interests.
"With this interface, you'll be able to target exactly the people that you want," Zuckerberg said. "This is some really powerful stuff, and nothing like this has ever been seen before."
Finally, Zuckerberg showed how Facebook Ads will also give advertisers access to tracking and analytics information about exactly who they're reaching and what kind of trends are appearing all over the site. "As you run ads on Facebook, you'll be able to see the exact mindshare that your brand is getting."
He assured the audience that this will not compromise members' personal privacy in any way. "No direct personally identifiable information is ever shared back with marketers," he explained.
Facebook Ads, which officially launch Tuesday night, will be accessible through the company's sales team as well as through an online "self-service assistant." Launch partners, which had been rumored to be limited to a select nine or ten, include The New York Times Co., Blockbuster, CondeNet, General Motors, STA Travel, Fandango, CollegeHumor, Joost, Six Apart, Coke, Sony BMG, Verizon, and several dozen others.
The unveiling of Facebook's advertising program was hotly anticipated, with rumors flying around for weeks about exactly how the fast-growing company would tackle the tough issue of how to advertise on a social network--where people go to "poke" their friends, not search for new products to buy.
But last month, Microsoft announced that it had purchased a $240 million stake in Facebook, valuing the young company at $15 billion, with the intention of expanding its existing advertising partnership. Then, Facebook saw some of its thunder stolen last week, when Google revealed its OpenSocial initiative largely to counteract Facebook's momentum, and rival MySpace.com announced a targeted advertising initiative of its own.
But that wouldn't dampen Zuckerberg's enthusiasm. In his well-rehearsed keynote address, reminiscent of Steve Jobs' legendary Apple product unveilings, the 23-year-old CEO explained that "we are in a time in history where more information is available and people are more connected than they have ever been before."
He repeatedly described Facebook Ads as a revolution in marketing. In the last century, he explained, the cost of communication was vastly higher than it is now, and media channels were only available on a macro level. "In the next hundred years, information isn't just going to be pushed out to people. It's going to be shared across the billions of connections that people already have," Zuckerberg said. "Pushing out your message isn't enough anymore."