Friendranking and other antisocial objects

There is no doubt that social networks have a conundrum with "monetization". On the one hand they have an incredibly rich source of data about their users, but on the other no-one seems to want to give them much money to advertise to those people. Thus various schemes have been tried (such as Facebook Beacon) to extract that data in more useful (aka intrusive) forms for advertisers. That Beacon was roundly condemned seems not to deter others who wish to rush in where those already burned fear to tread.

Latest up is SocialMedia with FriendRanking:

The company scans data about your activities on Facebook and other social networks, infers who your best friends are, and ranks them. Then the company exploits that ranking to serve you relevant ads.

It does so with something it calls “social banners,” which insert references to your best friends within advertisements.

The idea is that showing you ads that reference your friends will attract your attention and thus make the ads perform better.

CNet explains it thus:

[The] social banner would ask which of your close Facebook friends, among a short list, you’d like to invite to see the movie. Or a social banner might inform you that a friend Jim just ranked Iron Man with three stars, and it might ask to “click here to buy tickets at Fandango.

So, given that people didn't love Beacon a lot, why will this work? Frankly, we don't think it will, but that won't stop desperate SocNets buying it - as SocialMedia's CEO notes, the response rate to standard display advertising on social networks is abysmal. People click on ads about 0.02 percent of the time, because people have started ignoring ads. Given that everyone wants billion dollar valuations, it has to get rates better than that.

But it won't - the Behavioural Economics are against it. Social interactions - the things we do with friends - are "social capital" and we separate those things from "Financial Capital" In fact, introducing the market to our social interactions totally changes the game of the interaction. Lewis Hyde, who wrote on Gift Economies (of which social intercourse is a type) noted that when a primarily gift-based economy is turned into a commodity-based economy, the social fabric of the group is invariably destroyed. Quite simply, pimping stuff is not an acceptable social transaction unless the information is directly asked for.

The dream of course is that by mining your social metrics, you will get Ads that are very relevant and you will welcome them - except they are not, cannot be as not only is this the commercial realm invading the social, but we are simply not "in the market" when we are conversing with friends, unless we directly ask. Not only that, but the Beacon evidence is if people do find that their data is being mined overtly, they get extremely upset (or at least a noisy enough cadre do).

For this reason, any advertising in the space has to have a very light touch - 10 years ago Yahoo experimented with email advertising and found that the only thing that was acceptable was an ad at the bottom of the email. The lesson was not lost on Google, hence Adwords - and its not on Gmail or on Google Groups!

Then again there is a new crop of bubble-valued dotcoms desperate to get (or keep) sky-high valuations despite all rational evidence, so there will no doubt be more (VC backed) toiling in the vineyards of social datamining.

So what will happen in this game longer term?

Clearly there will be continual iteration of the social net datamining play, the belief that the next approach will be sufficiently "relevant" to get under the user's trust radar and hit the economic attention El Dorado. But we predict something else will occur too - every crass attempt will build up the resistance and mistrust, people will start to be more wary and subvert these systems, so the value of what is mined will decrease as the ability to mine rises. It will also push th argument fr personal datastores, obfuscators and so on.....

And what does winning actually look like?

Congratulations, you have managed to subvert social into commercial capital - but guess what, we behave differently in that world - and we will - and its not how people like it, so its highly likely people will just move their social capital elsewhere. It is transferable, after all. And there will probably always be another VC or Offset funded SocNet starting out looking for new eyeballs too, that is willing to be more homely as it starts the journey

Afterthought - here's the thing that gets me with these services - there are a bunch of them being built, VC funding is forthcoming, but its all bad-guy stuff - its not something you would do if left to your basic human ethics after all. So imagine if you wanted to build an anti-Friendranking system, an antidote to antisocial object mining? Its not hard to do, it just reverse these technologies. How many VC's would line up to fund that? There's no money in it, after all - its just useful! Thank heavens for Open Source......