Facebook’s advertising exchange, which didn’t exist a year ago and now generates real revenue, is getting bigger. AOL’s Advertising.com will start using the exchange to buy ads for its clients on the social network’s pages.
AOL is the highest profile player to join FBX, and may well have the most buying power. Advertising.com is part of the AOL Networks group, which generates around $600 million a year in sales; it can theoretically funnel a lot of that through Facebook’s pages if its clients want.
“We know that advertisers want to include Facebook inventory in their buys — we’re seeing it on RFPs — so we’re glad to be able to further meet their needs,” AOL Networks CEO Ned Brody (that’s him on the right) said in a blog post announcing the tie-up. Look for Brody to pitch advertisers the exchange tie-up as a reason to use his network instead of Google, which doesn’t have access to the Facebook exchange (and may have to wait a verrrry long time to do so).
Facebook set up the exchange last year to allow outsiders to buy ads on the social network using the same targeting data and tactics they use on most pages on the Web. It’s a different strategy from the one Facebook uses to sell the rest of its ad inventory, which uses data Facebook collects about its own members.
The split in ad strategies puts Facebook in an interesting position. The exchange has grown very quickly, and during the company’s most recent earnings call, officials said it was serving up a billion impressions per day. The ad tech guys love it.
That’s in large part because it uses them for the same kind of display ads that you see all over the Web — in this case, the small rectangles on the right side of the Facebook home page, which generally cater to “direct response” advertisers. There’s a lot of speculation that it will start using the exchange to sell mobile ads, too.
But Facebook’s big push, to both advertisers and Wall Street, is that it can deliver ads that no one else can, using its own proprietary format — like its “sponsored stories” — and own data. The bigger its exchange gets the harder it may become to differentiate Facebook from the rest of the Web.
Read more great articles at AllThingsD
There is no question that in today’s connected world — where few activities go untracked and undigitized — social data is everywhere, being generated by the terabyte. Fast on the heels of social data are innumerable ideas for harnessing it. But all too often the focus seems to be on the vastness of data, the wow-factor of its proliferation, the fear-factor of its invasiveness. Lost from the discussion is that social data is not like other data — it cannot be calibrated, is often ambiguous, and the traditional tools of data analysis may not apply.
Given the buzz about Facebook’s data trove, you might think the only use for social data is to tap into consumers’ likes and dislikes. However, the potential to use social data extends far beyond consumer marketing. The free-flowing streams of data generated as people conduct their business and personal lives online hold insights into new ways to address old business issues and to discover new ones.
The question, then, is what is social data telling us about our organizations and the people around us? How do we accommodate these emerging insights to make business decisions, particularly when they challenge established practices, processes and organizational hierarchies?
Social Data Reveals Who We Are (and who we think we are)
Much social data reflects users’ interests, perceived expertise, social outlook, skills, and experience, either based on information they reveal directly in profiles or indirectly through the discussions they participate in and groups they join. Enterprise social media tools can make this previously hidden information more visible to employees and managers. The results range from improved problem solving to better staffing decisions and more engaged employees.
An employee facing a technical challenge might wonder if anyone has encountered it before. At Avaya, employees use social software (SocialCast) to find co-workers whose experiences might be relevant to a specific issue. The result has been quicker resolution of customer issues, which translates to lower customer support costs and higher customer satisfaction. LinkedIn provides a similar ability for employees to reach beyond the walls to external networks, accelerating problem solving and leading to new discovery.
A manager staffing for a new product might wonder, “Who has this skill set and is interested in product development? What have they been working on and will they fit with the team?” Facebook is just one company that uses social media to “work out loud.” This type of data increases the internal visibility of employees’ experiences and skills, to everyone in the company, and may highlight areas where a group is particularly strong or weak.
Reveals What Customers Really Think About Our Companies and Products
For businesses that understand that social media is about more than gaining followers and pushing ads, social data can explicitly inform product development. Giffgaff, a UK mobile telecom company, uses social media to engage customers in designing the phone itself as well as the service plans.
For a manager wondering what her employees are discussing or a business leader wondering how a news report has affected brand, behavioral data can reveal trends that impact decisions. Companies like Prosodic measure sentiment in real time, advising community managers about the most effective times to post content in order to sustain participants’ interest and engagement.
And Also Reveals What We Do (and Don’t Do)
The ubiquity of sensors and other means of digital tracking to collect data and the computational power to store and analyze data reveals that social data stretches beyond individuals’ online lives to encompass the geography, if not the content, of their interactions. This opens the door to looking beyond content to the patterns of behavior and interactions that occur.
High-performing teams have been kind of a Holy Grail, particularly in service industries. Yet when Deloitte Consulting LLP decided to analyze social data (including phone, email, and online interactions) from one of its own practice groups and tie the data to operative metrics (revenue per consultant, profitability and staff turnover), they discovered some “truths” about high-performing teams turned on their head. Notably, although the firm had focused on creating “tight” teams, high performance depended more on external connections to other parts of Deloitte than on internal interactions.
In a related effort, research at the MIT Media Lab using sensors to track live interaction found that the performance of teams at a call center was highest when they carried on “back-channel” communication and interacted outside of formal meetings, irrespective of skills, education or incentives. What leaders thought they knew about teams wasn’t supported by the data. This research led to insights about metrics that might better predict team performance and offer a means of creating interventions before performance levels dip.
How Do You Convert Social Data Into Social Insight?
The most challenging aspect of social data is making the connection from the data you have to actionable insights and turning insights into behavioral changes that move the needle on performance. If you are going to have a data-driven organization, you have to know how to use social data, and most organizations don’t.
The following questions can help you find the seeds of performance improvement in your data:
Chief Executive Officers of large companies may be in the shareholder spotlight, but Chief Marketing Officers are increasingly having as substantial an impact on their companies’ market performance, bottom line and shareholder value. CMOs don’t just create a company’s ephemeral sense of “brand,” their marketing strategies also directly influence sales. A company that is great at marketing is also usually great at raking in sales.
But do companies with super-smart, digitally-savvy CMOs really outperform their market peers?
Take a look at the share-price growth over the past year of three public companies with cutting-edge CMOs — Volkswagen, UPS and Comcast — and then compare this growth to the industry benchmark in their respective categories.
In the last six months, Volkswagen 
