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I was perusing the Facebook Marketplace this morning (for those unfamiliar, the free classified ads section of Facebook) and was hoping to find some deals on cheap computer hardware being sold here at my school when an interesting idea popped into my head. Why doesn’t Facebook use this marketplace as part of its advertising system? Here’s how it would work:

In my hypothetical system, as users post a new item for sale in the marketplace, they would be prompted to attach a few keywords to the sale listing. Next, these keywords would be used to create ads for this particular sale listing. These ads would then be shown (in the usual spot in the sidebar) to other Facebook users whose interests are similar to the keywords the seller selected.

Thus, a Facebook user who otherwise may not be looking in the marketplace would be presented with ads for something on sale by another Facebook user. Being that the ads are targeted towards that user because of his/her listed interests, the user may suddenly find some money burning a hole in his/her pocket. Facebook users also win because they wouldn’t always have to look at the other, sometimes annoying, ads that are presented in the sidebar and in the feed. The seller wins because they get their item sold, likely at a much quicker rate than it would have sold otherwise. The only potential loser in the deal is Facebook itself.

Now some may say that Facebook already makes plenty of money through advertising, and they can afford to take a hit for a simple user convenience such as this. Honestly, I would agree with that assessment. However, Facebook could be a winner in this situation too. Say, for example, that Facebook charges a small fee to cover ad space, a dollar or two at most. I would suspect that a lot of users, in the interest of selling their item quickly and making some money, wouldn’t have much of a problem with paying Facebook a few dollars to advertise their item for sale.

Seeing that advertising space on Facebook doesn’t cost much of anything (the minimum is $.10 per 1000 impressions in a CPM model), I would imagine that this would be pretty good business for them as well. Facebook would obviously be in charge of determining how many impressions the ad got. With that said, I know that users could already do this themselves through Facebook’s general advertising system, but it requires some extra work and a little knowledge of advertising. It would be much easier and probably more effective if Facebook took care of it for the seller. It would likely be appealing to the company anyway, because it is just one more way that they can integrate with their users.

Personally, I do not check the Facebook Marketplace very often. However, if I were to be surfing around Facebook and saw an ad for someone selling a stick of DDR2 RAM for $10, I would probably be pretty inclined to check it out and possibly buy it right then and there. I would suspect similar results from many users. I’m sure there would be some users who would scream “invasion of privacy,” but it’s no more an invasion of privacy than the targeted ads that are already displayed on the side of your profile. The difference is that these are items being sold locally, and you may actually want to buy!

This model is similar to Amazon’s, in that it sort of recommends items to users. We’ve all seen how well Amazon has done in the retail business, so who’s to say that a similar idea wouldn’t work for Facebook? If nothing else, maybe items won’t sit in the marketplace for four months, unsold!

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Published on: February 6th, 2008

Categories: Software / Open Source, Web 2.0