Facebook Partners: Is Beacon the Only Option?

The Techdirt Insight Community recently addressed the issue of Facebook’s Beacon from a partner perspective. The following question was put to its group of experts:

Does it make sense for a consumer-facing company to sign on to Beacon — or has the program forever been tarnished? How should we approach using Beacon? In an ideal world, we would like for it to be a way for fans of our products to pass on effective “endorsements” of the product, but we do not want to be seen as doing something intrusive or upsetting. If not Beacon, is there a better way to do this either within Facebook or through a different platform?

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Here’s my answer:

I think the only two games in town that are worth exploring are Facebook and Google (GOOG). MySpace is too raw for most consumer goods companies and the demographic doesn’t compare to Facebook’s and Google’s.

Let’s look how Facebook’s efforts stack up against Google’s:

Facebook

Traffic: Facebook is on fire. Its traffic and usage stats are sky high.

Monetization: Monetization is just getting better. Most of the current ad sales are sponsorship-related. With Beacon, lead generation becomes viral. The potential here is huge.

Reach: Facebook just announced that it is licensing its infrastructure. This moves Facebook even closer to the Google/Open Social platform in terms of reach. Privacy is certainly an issue - just check out the traffic to Facebook’s privacy page. Opening up profiles caused a bigger blip in users’ minds than did the hullabaloo surrounding Beacon.

The Pro-Beacon camp basically espouses the following ideas (see Dave McClure’s article on the matter):

Facebook has introduced a universal opt-out which should satisfy the privacy police.

The biggest mistake was a PR one that positioned Beacon as opt-in when it wasn’t. Facebook is addressing this issue.

People who are going bananas over Beacon should understand that most people on Facebook are used to the default being opt-out (i.e., lifestyle transparency), not opt-in (selective sharing).

I see parallels between what’s occurring surrounding Beacon to the snafus made during the introduction of In-Text Advertising. There was a tremendous, immediate push-back when in-text advertising was introduced. Although privacy wasn’t the primary concern, users and customer advocates didn’t like the intrusion of advertising.

Today, the ads are run by such networks as Vibrant Media and Kontera. Originally, companies like Forbes were forced to remove the advertising, but now, (almost) no one bats an eye. I think that the same evolution with editorial and advertising converging will also occur with Beacon. My extra-Facebook activity is going to join my Facebook activity to be published to my friends network via my News Feed. That’s what I wanted when I joined Facebook, wasn’t it?

Google

Traffic: No one puts up search numbers like Google. Even at this stage, Google continues to gain market share.

Monetization: Google runs it’s own network of publishers and has the ability to juice its numbers by adjusting its variable payouts to its partners and by adjusting how much traffic it shares out to the network vs. internalizing/monetizing it itself.

Reach: It keeps growing.

Privacy: Google offers Web History internally to users. Now that Open Social and Google Profiles have launched (see my article about this soft launch and what it means for Google’s moves into social networking), Google is going to have to deal with privacy issues as well. Google has tons of personalized information about users (from Gmail, Search History, Blogger, Docs), and continues to accumulate this information. Google has to be careful how it shares out this info, and should learn from Facebook’s mistakes.

Google’s advantage vis-a-vis Facebook is that even with Beacon, Facebook is pretty much a closed network. You won’t have 100% participation, and users still spend a lot of time and activity outside of the Facebook network. Google has replaced the portal of the 1990s to become essentially the Internet for many users. From search, to email, from Adwords to Analytics to Checkout, Google has closed the loop in terms of activity.

I think Google is also more advanced in terms of providing partners with analytics — the absolute KEY to web advertising. It’s not enough to provide partners with an interface for social networking. Partners should demand ROI. Facebook is just in the early days of providing metrics for its Apps. Google has made an entire business out of metrics. As markets look to expand their influence in social networks, they will need the tools to address this.