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No New Ads With Facebook Graph Search, But Sponsored Results Aren’t Going Away

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No New Ads With Facebook Graph Search, But Sponsored Results Aren’t Going Away
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Facebook announced Graph Search today, a new social search offering, which aims to tap into your connections with friends to deliver relevant information you may be seeking. It’s in limited beta, and in very early development, as CEO Mark Zukerberg made clear, but the offering has a great deal of potential.

Of course search is big business when it comes to advertising, and Facebook has been cramming ads all over its site since going public last year. It’s hard to imagine that the company isn’t eyeballing the potential ad dollars that could accompany a search offering like this.

Facebook has already been monetizing its search feature with sponsored results, but it stands to reason that this will be a big, new way for Facebook to get advertisers in front of users in perhaps a more relevant way than it has been able to do so far.

“Before the arrival of Facebook’s Graph Search, the search function on Facebook was basic and as such, a wasted opportunity given Facebook’s imperative to strengthen advertising revenues,” says Eden Zoller, principal analyst at Ovum. “Facebook Graph Search will no doubt leverage member data to provide advertisers with more targeted, personalized advertising opportunities going forward. But Facebook needs tread very carefully here and be mindful of user privacy. It claims to have built Graph Search with privacy in mind, but Facebook has a mixed track record on this front and is in the habit of pushing privacy to the limits of what is acceptable.”

Here’s what Facebook has had to say about privacy as it relates to Graph Search so far. Basically, not much has changed. Graph Search is only showing users content that they already have access to on Facebook. Existing privacy settings still apply.

“Facebook Graph Search is not a web search engine, but a search tool designed to enrich the Facebook platform and experience for both users and advertisers,” says Zoller. “This is sensible as a full blown web search engine from Facebook would inevitably have to compete with Google search, and given Google’s dominance of the search market it would be hard for Facebook to make a serious impact – and win advertising dollars.”

WordStream Founder Larry Kim says, “Facebook Graph Search appears to be a great way to search through your stuff, but from an online advertiser’s perspective, I’m unimpressed. It remains unclear on how advertisers will be able to use this Graph Search product to better market and sell their products to Facebook users. Search can be great for ad targeting because it allows marketers to direct ads about their products and services to the right people at the right time. Unfortunately, the new Facebook Graph Search capabilities are limited to people, locations, photos, and other types of searches that are weak in revealing commercial intent. In typical Facebook fashion, the official Facebook Graph Search announcement does not outline any benefit for its advertisers and investors.”

Of course, Facebook already has over a billion users that it targets ads to in different ways, and this would simply provide another place to stick ads in a way that might be more appealing to some advertisers.

Zuckerberg touched on the monetization potential of Graph Search in a Q&A with press after the company unveiled the product (via a liveblog from The Verge):

“This could potentially be a business over time, but for now we’ve focused on building user experience…You build a good business over time by building something people want…We have had sponsored search results for a while. That extends quite nicely to this but we haven’t done anything new for this release.”

In a blog post, Facebook says, “Pages and apps can still use sponsored results, which appear to people whether or not they have Graph Search (sponsored results have been globally available since August 2012). There are no new ad formats available today. Here is more information on creating a sponsored result.”

Web search results, still powered by Bing, will show Bing Ads.

No New Ads With Facebook Graph Search, But Sponsored Results Aren’t Going Away
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