Facebook is expanding its vocabulary.
Recently at f8, Facebook's developer conference, the company introduced a series of action verbs into its social platform. "Read," "Watch," and "Listen," Facebook CEO Mark Zuckerberg explained, were added to help build a "language for how people connect."
The one missing word, of course, was "Buy." That's really why Facebook and its army of content partners from news, publishing, music, and film and TV are rushing to set up shop on the famous platform with 750 million users. The overriding idea is that the world's most esteemed global brands will live on Facebook and conduct commerce at an unprecedented rate and scale. As it moves toward its highly anticipated $100 billion IPO, expected next year, Facebook is on a strident quest to appear more valuable to advertisers and glean new revenue streams beyond display advertising. Brands, meanwhile, are angling for new consumers and better ways to measure the ROI from social media campaigns.
CNET sat down with Gi Fernando, an expert on social-networking data, to help explain what Facebook's platform changes mean for brands, consumers, and marketers. Fernando is co-founder of Techlightenment, a leading social customer relation management company owned by Experian, and has worked with Facebook since 2007. Essentially, Techlightenment helps brands track, mine, and analyze the real-time customer data found in the social graph. Founded in 2007, London-based Techlightenment has had hundreds of global enterprise clients including GlaxoSmithKline, Universal Pictures, Skype, Volvo, and the Royal Bank of Scotland.
What follows is an edited version of the conversation.
Question: How will Facebook's new platform changes impact brands and advertisers?
Fernando: The implication for businesses is absolutely huge. Advertisers and brands aren't just going to be looking for "clicks" anymore, which is what Internet advertising has long been based on. It's what Google is based around: getting clicks. Why bother with clicks when you can get actions and verbs-people listening, cooking, reading, watching, jumping, eating-that's what you'll be measuring people on "action" words, "doing" words. That's a big deal. It's transformational for the Internet. It's Facebook trying to be the semantic web. And for advertisers, that's immense.
What do you mean by that? Can you elaborate?
Fernando: Now you can do more than just cost per click. Now you can do "cost per read," "cost per watch," "cost per buy." And the importance of that is being able to discern the value of downstream actions and purchases. How many people who read this influence 20 others to read it? Out of every watch, you get 13 buys or subscribes, that's quite fundamental.
So, what, exactly, is the single biggest change that Facebook is making here?
Fernando: The biggest change is Facebook driving toward becoming the semantic web. The semantic web is making sure that the Internet has a dictionary and a grammar that can be understood by consumers, yes, but also by advertisers and brands.
It's also understanding how people behave on the Web rather than just clicking on stuff: what are they actually doing? You read, watch things, you get instant feedback, your friends can read and watch with you, but then the brand knows what you and 13 others are reading, watching, listening to as well, and you can target advertising based around that. It's a beautiful feedback loop both for the consumer and the brand.
What other ways can brands and marketers leverage Facebook's new platform?
Fernando: What they're really doing is advertising with stories. It's not so much a creative agency telling a story--it's you and me telling a story. And in the end, the aim is to use that story, pluck it out as something that fits within all the other stories, which are inside Facebook which form part of your life.
So let's say you and 13 other friends are listening to music and then commenting on it, that creates a story around an artist, musician, or a brand that can be used as the ad. The ad can include the music you listen to as part of the content.
The advertiser will be able to buy that conversation for a price to make sure it's seen by as many people as possible. And therefore the efficiency of the Facebook system increases massively because you don't have the limitation of people creating imagery just for those tiny little ads on the right or left hand side [of the Facebook page] you can actually have a person's experience be the advert.
Why didn't Facebook talk much about commerce, the actual mechanics of transactions at f8?
Fernando: My view is that they see commerce as just another type of action--it's a buy. I think they've actually already thought past it. If you've got your platform, commerce just fits in seamlessly.
Is there a potential downside to what Facebook is trying to pull off?
Fernando: Driving engagement is the key to their plan. So, if all these "reads," "watches," "listens," and "buys" don't happen, there won't be enough stories, and advertisers won't be able to target. Advertisers need to move away from impressions and move over to targeting based on actual actions. But again, it hinges on driving that engagement and making sure that people are doing these actions together to generate stories. And by having a reflection of the real world inside their platform...this is the grown-up version of Facebook.