Andy Kessler argues that one of the most important innovations in technology is
Facebook’s “Like” button. He believes that is the major reason the stock for Facebook
has become so valuable. Now I don’t blame you for being skeptical that something as
simple as a “Like” button could have so much impact. So let me explain.
Essentially the button took much of the guesswork out of advertising. Perhaps
you have heard the adage about advertising that goes something like this. Advertisers
know that only half of their ads are effective, but no one knows which half. This is less of
a problem if you are spending a small amount on any ad. But what if you are spending
$3.5 million for a 30-second Super Bowl commercial?
Social media is changing the world. The business model is changing. It used to be
that advertisers would broadcast ads to lots of people, knowing that only some of them
are interested in the product or service. Now more of them are working to entice millions
of people to a particular spot (webpage, Facebook page) and then sell them something
else.
Originally, advertisers didn’t see the value in running an ad next to the pictures
you just posted on Facebook of your birthday party. Then Facebook rolled out the Like
button and that changed everything. Andy Kessler put it this way. “With the Like button,
Facebook is like Bob Eubanks on The Newlywed Game, who promised contestants ‘a
prize chosen especially for you.’” Essentially advertisers can direct an ad that is chosen
especially for you.
Facebook is affecting the way advertising will be done in the future. Consider that
Procter & Gamble announced a layoff of 1,600 people because the company was
trimming its $10 billion annual ad budget. Why? The CEO told analysts that “things like
Facebook and Google” can be “much more efficient.”
This is just a glimpse of the future brought about by the Facebook Like button.
I’m Kerby Anderson, and that’s my point of view.
I would also like to see you do a blog about what happens to our privacy when we are on Facebook (etc), esp. when we do things like “click Like” and also allow apps to access our account, as well as how Facebook has been said to follow you as you leave their website and do your other online activities. Facebook and Google have gone way too far in erroding personal privacy, and very few are even hip to the antics they play. What do we give up willingly when we agree to these extensive Privacy Policies. It’d be nice to know how to surf for key phrases in those policies to watch out for – and when we learn what that is, we need to let other’s know and make a loud noise to Facebook and Google, and others that we will no longer use their products if they are going to exploit us in this way!
Thank you for the story, it is very insightful as well. Keep up the good work on the Blog- I esp. like that I can click on the audio so I can continue to do my work while I listen!