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Do targeted Facebook Ads freak you out?
Kipp does not understand it, but recent research suggests the majority of Facebook users like targeted ads. Yet the introduction of a new feature, Facebook Gifts, may provide the tech giant with an alternative and more lucrative source of income.
October 23, 2012 12:05 by Eva Fernandes
Recently I went on trekking trip with a group of five women. Filled to the brim with wanderlust, since the trip I have grumbled to anyone who would listen about my itchy feet and my new found love for trekking.
How strange then, two weeks after I returned from my travels I should see an ad on my Facebook page titled: ‘All-women hiking trips and tours in Nepal.’ At first, I was rather impressed—if ever there was an example of targeted advertising, well that right there is it.
And then, after the brief moment of wonder passed, I felt scared. Very, very scared. Why? It is no surprise the lidless eye that is Facebook sees everything and shares it with marketeers and advertisers alike; yet, having this connection flaunted so callously on my very own news feed irked me.
Yet, according to recent research on the matter, I am quite alone in my concern. According to Ipsos’ recently release Socialogue, 56 percent of Facebook users are in favour of targeted ads with 44 percent showing a preference for targeted ads.
Either way, perhaps the haunt of targeted ads will no longer be too pressing a concern for users. The tech giant has been developing ways to monetize Facebook more and more since the company went public. Despite rolling out targeted ads, revenue from advertising has always disappointed.
According to analysts, Facebook is expected to rake in nothing more than 40 cents per user per month for this year. Of course, considering Facebook hit over a billion users very recently, when you do the math it adds up to close to $4.2 billion from advertising-an increase from the $3.2 billion Facebook earned from ad revenue in 2011. Not too bad, but given its scope it doesn’t quite meet expectations.
Which is why Facebook i s hoping a new feature called Facebook Gifts will bring in a healthier revenue. In keeping with its regular announcements of birthdays, Facebook will soon allow users to send gift items to one and another by using the ‘gift’ button. In addition to providing the user with a reminder of special occasions, it is also removes the hassle of filling in the recipients’ address-that will be up to the recipient to do.
Off the bat, the initiative is promising and well suited to the reach and nature of the social network. Here in the Middle East, where there is a real resistance to online shopping, it remains to see whether the new Facebook gift will be just as lucrative source of revenue.