Facebook's Sheryl Sandberg: Big Opportunity for Brand Advertising Online

Posted by: Rob Hof on October 06, 2008

I never would have thought magazines like BusinessWeek and fast-rising social networks like Facebook have much in common. But during an interview with BusinessWeek editor-in-chief Steve Adler today at the American Magazine Conference in San Francisco, Facebook Chief Operating Officer Sheryl Sandberg revealed that she’s struggling with the same thing most magazines are: getting advertisers to better understand the value of branding on the Web.

The former vice president of global online sales and operations at Google, who joined Facebook last March, told the lunch audience that the only advertising that has worked really well so far is search ads. But they’re focused largely on fulfilling demand for things people already know they want. “What no one’s quite figured out what to do is demand generation,” she said. “We need to find a new model and new metrics.”

The basic challenge for Facebook is similar to the one most publications face especially online: “Users are not on Facebook looking to buy something,” she said. But she firmly believes that “where people spend their time is where advertisers will be eventually,” and notes there’s still a wide gulf between the amount of time people spend online and the proportion of advertising that has moved online.

Sandberg holds out hope that sites such as Facebook can integrate advertising into the kinds of things people are already doing on Facebook. “Sex in the City” movie studio Warner Bros. recently let people gift virtual shoes to their Facebook friends, for instance. “People don’t dislike ads,” she said. “They dislike irrelevant, annoying ads.” So if Facebook can target ads based on personal information—without annoying or freaking people out—she thinks there’s plenty of opportunity for brands that currently don’t find search ads very appealing to move more forcefully online.

Now, if she can just casually mention to those advertisers what she mentioned to me and Steve before the lunchtime event: She still loves reading magazines in print, too.

(Update: Mediapost has a bit more on Sandberg’s interview.)

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Reader Comments

Michael Lazerow

October 7, 2008 04:40 PM

Facebook hasn't even begun using their own data to target engaging, brand advertising. But don't worry, they will and Facebook will be a monster company in the very near future. The brands will follow the people and Facebook will create one of the largest brand advertising businesses the web has ever seen. Think Yahoo/AOL/MSN homepage meets massive data and targeting. Facebook is a game changer.

Michael Lazerow
CEO, Buddy Media

King Khan

October 7, 2008 05:38 PM

They could be but they don't have good management. Check out this article from Valleywag:

http://valleywag.com/5059853/why-facebook-is-foundering

Mari Smith

October 8, 2008 01:14 AM

I'm a raving Facebook enthusiast. It's only a matter of a bit more time before the innovative team figures out a solid revenue model.

I must say, each time I see a Facebook ad that resonates with me and allows user comments, I jump on the chance to comment. Why? Because doing so helps create more visibility for me at the same time as supporting the advertiser!

Cheers,
Mari
@marismith

jean ward

October 24, 2008 06:31 AM

how are you screening advertisers, who is responsible for scams. i know of one and have been burnt by your advertisers

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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