The purchase funnel treats individuals as if they are completely isolated without any influence from their friends, family, and networks. Over the past few years, Facebook has argued that you actually do progress down the funnel with the influence of your networks. Facebook is actively testing this with the Action Spec Targeting beta feature based on the Open Graph Protocol. This may be a way for Facebook to take a chunk of the Google-dominated fulfillment level at the bottom of the funnel.
Facebook display ads have long been a tool for brand discovery, awareness, and soft leads. Facebook has never been conducive to the purchasing mind. Users log on to check out what their friends did last weekend, look at photos, read articles posted by their friends. Generally, users come to Facebook to browse. When users are in a purchasing state of mind they go Google where they intend to search, click, and convert. This lack of intent with Facebook users has made it difficult for their display ads to compete with Google’s search ads triggered by high converting long-tail keywords.
Action Spec Targeting allows advertisers to directly target users and their friends/networks based on in-app actions. In-app actions based on the Open Graph provide a much more current, up-to-the-minute data set that can target users with potentially high intent. These apps are voluntarily downloaded by a user who must agree to the terms and conditions before installing, and then it is at the discretion of the user if he/she ever wants to actually open and utilize the app. This allows Facebook to avoid cookie usage, which is a big win in the face of privacy advocates, and may be an advantage abroad if cookie restrictions are strictly enforced in the EU.
For example – my Facebook friends may see this on their Facebook feed:
Jessica listened to Chocolate Factory by R. Kelly on Spotify
In turn, the Open Graph markup can interpret that action as
Jessica [music.listen] [music:album] [music:musician] [fb:app_id]
Facebook’s engine is fully capable of taking those Open Graph variables, aggregating the data of in-app Spotify users, and making that data available to advertisers wanting to target R&B fans who use Spotify via Facebook Connect. If I’ve chosen to download Spotify, pay for the subscription, and listen to it all day at work I am probably someone wants to attend music events. If most of that music is Hip Hop, Coachella saves money by excluding me from their target ad groups but AC3 Hip Hop Festival could do well serving me an ad. An even stronger way to move me from consideration to purchase would be to serve me an ad mentioning that my Facebook friend Nicole just bought tickets. Online and offline, I am much more easily persuaded to do something if I have friends to share that experience. Facebook is just figuring out the way to let that translate online.
Currently, the available actions for Action Spec Targeting are news.reads, music.listens and video.watches – encompassing some popular apps such as The Washington Post Social Reader, Spotify, and hulu. There are 60+ other companies currently supporting Open Graph apps for use within Facebook. Action Spec Targeting will encourage other companies to adopt the Open Graph capability in order to generate conversions that can now be tracked as users buy Groupons from within Facebook, check in at their favorite restaurant from within Facebook, or purchase tickets from Ticketmaster from within Facebook.
Us normal folk are much more influenced by the bottom level of our networks – by our closest friends and family and neighbors. That is the level we trust more than any ad or marketing message. Marketers are starting to figure that out and have shifted their focus from random celebrity endorsements down to relevant industry influencers.
Facebook has found a way to move even further down the network by making a friend the product spokesperson.