• by Arnel Leyva , March 31, 2011

In my last article, I talked about the concept of the Advertising Holy Grail -- a series of technologies that together would serve the right ad to the right people in the right place at the right price. Facebook is the biggest continuous survey of the global population: the likes, dislikes, wants and needs of approaching 1 billion people at any given time.

It has the potential to be the ultimate advertising platform because it already has the largest set of continuously refreshed "preference clues" of any medium. But is it really that close to attaining advertising enlightenment? More importantly, does it really want to?

Facebook is to millennials what Google is to Gen-X -- a once-in-a-generation, socioeconomic phenomenon. If you track their growth on a timeline in terms of ad revenue and when they each deposed the kings of their respective spaces (Yahoo and Myspace), the charts look eerily similar except for one thing -- Facebook arrived at their milestones in half the time. But that's where the similarities end.

Facebook ads are "push" media that target behavior; Google listings are "pull" media that need prompting. "Push" and "pull" are the essential differences between brand advertising and direct marketing. This is why Facebook smells like Yahoo, the old king of online brand advertising.

But Facebook's unprecedented amount of personal information potentially allows it to anticipate users' desires more accurately than Yahoo ever dreamed. Brand advertisers have taken notice. This study from Q4 2010 shows that large advertisers planned to increase their 2011 ad spend on Facebook. They weren't lying. Just recently, Facebook sped past Yahoo in ad revenues.

Facebook's heavy branding aspect is also the reason that it has been so difficult for advertising statisticians to calculate the true value of a Facebook ad. That same question has dogged brand advertising for decades -- from the real "Mad Men" TV days to online display ads, when search marketing displaced the established ad success metric of "reach and frequency" with the more direct-marketing notion of click-through rate. In that regard, Facebook ads act more like traditional advertising than online media.

Brand advertising that is informed by the largest collection of freely given and continuously refreshed personal information sets up Facebook to be an unprecedented advertising channel. But the amorphous nature of branding makes Facebook advertising nearly impossible to accurately measure, so advertisers will not know whether this medium performs better than other media in order to optimize ad-spend allocation. And buying media at the "right price" -- a prerequisite to the Advertising Holy Grail -- demands accurate metrics.

Finally, for all of the backlash and lawsuits caused by the perceived betrayal of Mr. Zuckerberg's original promise of an online treehouse free of the prying eyes of adults (i.e., advertisers) watching our every online move in order to remind us of our needs when we need them, Facebook's API limits access only to users' profiles, not to their the posts. These posts would provide the real-time preference data needed for the Advertising Holy Grail to serve "the right ad at the right time." So the core of Facebook's original promise -- exclusivity -- is protected.

Looks like Mr. Zuckerberg instinctively knows that turning his creation into the provider of ultimate advertising enlightenment would ruin his business.