I don't want to rehash the argument that social networks are simply the Internet with more rules/structure here, but I do outline a bit more of the argument in my article on "The Future of Social Networks." The only reason I wanted to go back to the question of what social networks are is so that we can better address the question on everyone's lips this week: What does Facebook's ad platform announcement mean for my business, and how should I tell my clients/bosses/investors that I am on top of it?
Here's one way to look at it: Facebook has unveiled AdWords (plus) for Facebook Social Web. If you think about Facebook as its own smaller, self-contained version of the Internet, then you can begin to appreciate the magnitude of the solution Facebook is trying to introduce. Especially if one day the Social Web overtakes the Informational Web in users' attention and interactions. If you look at the release as a whole, you can see its brilliance is in its simplicity.
Facebook Social Ads -- AdWords for Facebook's Social Web. The ease of getting a campaign started in Facebook Ads couldn't be more reminiscent of the self-serve interface that filled Google's long tail of advertisers, key to ensuring that there was relevant ad inventory no matter when, where or what the search. The importance of this is often over looked. In order to ensure that there will depth of ad inventory required to serve relevant ads to the billions of Social Web page views, this same long tail is required. Better yet, by facing the targeting and ad creation outward, Facebook has put the responsibility of correctly creating and targeting Social Ads in the hands of the many. Much as the industry of search engine marketing sprung up to optimize advertising communities and utilization of AdWords, and in the process improved the depth and quality of Google's paid results, Facebook looks to achieve the same result for its Social Web.
The word-of-mouth addition, which allows users to pass along their choice to click, purchase or engage with a brand, is the natural extension of performance advertising for the Social Web. That is, if your ad/page/product performs or converts, then the word-of-mouth component allows your campaign to build on its success. This will promote a type of quality never before seen in performance marketing.
Facebook Page -- building Facebook's Social Web. Facebook Pages does a couple of things for Facebook's Social Web. First, it adds inventory. On the Informational Web, if you are thinking about Nike, you go to Nike's Web site. On Facebook's Social Web, if your mind wanders to Nike, most likely because your mind was prompted by a social interaction or a Facebook Social Ad, you can go to Nike's Facebook page. The idea is that Facebook's Social Web continues to mirror the real Web, with two important distinctions. First, commercial profiles are created specifically to exist and participate in the Social Web. Second, the "financial filter" set by Facebook helps to ensure quality content, and a reduction of noise (in theory). This isn't revolutionary. In fact, MySpace has a healthy head start in figuring out best practices for creating profile pages for brands to give them a Social Web presence, but it's an important component of completing the Social Web ecosystem, especially in combination with Social Ads and the analytics.
Insight and Analytics: measuring what matters. Finally, Facebook has to give marketers the proper tools in order to define and measure Social Web campaign effectiveness. The tools look great, but their effectiveness is something that will have to be vetted with much more trial.
All in all, what Facebook has introduced is the evolution of performance advertising built specifically for the Social Web. And along with this, Facebook has also introduced a set of tools to grow Facebook's Social Web. It's not hard to see how this could come to a head with Google. Venture beat outlines one way here "Facebook search expands - will it take on Google?" and I make a similar argument for how MySpace could potentially worry Google in "MySpace: Google's Frienemy" -- and don't forget MySpace will be releasing its own self-serve advertising interface, which the company says has been designed to allow "hyper targeting." What happens next will be interesting -- but for now, take advantage of the tools Facebook has introduced and reap the benefits of the innovation that has resulted from the intense competition to build and monetize the Social Web.