Facebook’s Sandberg unveils ‘Stream’ advertising vision

9 Apr 2009

While the vast majority of Facebook users polled say they don’t like the new Twitter-like format, the social-networking giant’s chief operating officer Sheryl Sandberg insists it will be the gel that will keep friendships alive and, of course, drive future ad revenues.

Sandberg said the greater ability for groups of friends to share information through direct, reciprocal and via a constant stream of updates, in tandem with its Engagement Ads process, will form the lynchpin of Facebook’s advertising and growth strategy.

Across the world, more than 200 million people are now using Facebook to keep in touch with friends, old colleagues and old classmates.

In a blog post last night, just after she gave a keynote address at the Ad Age Digital Conference in New York, Sandberg said Facebook researchers have been studying how people are communicating on and off the site.

“While the average user on Facebook has 120 confirmed friend connections, that number doesn’t account for all the different types of relationships people have in their lives. Thanks to recent research from the Facebook Data Team, we’re getting closer to an answer.”

At the New York conference, Sandberg described the “active network”, which consists of all the people with whom users stay up to date.

“Think about the ways you communicate with your friends – whether on or off Facebook. The communication likely falls into one of two traditional types: reciprocal communication or direct communication. Reciprocal communication is a conversation where messages are exchanged back and forth. This can include talking on the telephone, or on Facebook, it can mean a Wall-to-Wall exchange or real-time chat.

“Direct communication occurs when you send a message to someone specific, with or without the expectation of a reply. It can be a one-way Inbox message or Wall post on Facebook, or sending an old-fashioned letter or an email.

“On Facebook, there’s a third and new way you communicate – through the stream. Every time you log into your homepage, you see a running timeline or stream of the information being shared by your friends and the other things you’re connected with on Facebook. The more people share, the more you see in the stream and the more you learn about your connections.

”This stream communication, rather than reciprocal and direct communication, forms your active network. Whenever you interact with a story in the stream – whether you ‘Like’ a piece of content, comment on it or simply click on it – the person sharing it becomes part of your active network.”

Sandberg said that when Facebook’s Data Team measured active networks for users on Facebook, it found that, in any given month, users keep up with between two times and four times more people than through more traditional communication.

“With greater connectedness has come the ability for people to influence one another with more speed and efficiency. We’ve seen this lead to people spreading information and organising events on a mass scale, often within days and weeks. For example, within weeks of T-Mobile airing an advertisement, Facebook users organised thousands of people to recreate the ad with a ‘Silent Dance’ at the same station.

Sandberg said that Facebook’s advertising strategy is to follow a similar pattern. Its Engagement Ads on the homepage allow users to comment, RSVP or give a virtual gift directly in the ad.

“If any of your friends have already taken an action, that appears in the ad as well. We’ve found that interaction with those ads increases 50pc when someone sees a friend’s action, such as a comment. We’ve only just begun to see the opportunities being created, as people maintain more relationships and increase their influence,” Sandberg said.

By John Kennedy

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years