Facebook is Ushering In a New World of Relationship Media

This article was published as a guest post in AdAge Digital, and is republished here for Digital Quarters readers.

Today’s consumers are far more connected, with social profiles following them around wherever they go. And Facebook’s recent moves show the company is taking full advantage this in a series of small steps that, if successful, could literally overhaul media and marketing.

In the past, the bulk of any marketing plan was fulfilled by buying ad impressions. But Facebook’s goal of omnipresent connectedness with its users presents a rare opportunity to change this model, to sell relationships, not impressions. And that’s not all.

For several months now, Facebook has allowed advertisers to match their email lists with its user database. That was a smart move, because it enables a brand client to develop its relationship with consumers in their natural “social habitat”—all with advantages of segmentation, testing, measurement and optimization.

At the time, it looked like Facebook may have launched the only online direct marketing system capable of competing with email. (And one that might just also render direct snail mail obsolete, #thankyoufinally.) But with its latest add-on, “lookalike audience” targeting, Facebook now offers a whole new kind of advertising. The lookalike product, which is still in beta, lets an advertiser reach beyond its actual customers and message potential customers who look a lot like them.

With these two powerful offerings, Facebook is bundling the best of both brand and direct advertising, combining reach with relevance.

Why is that important? Because, as I’ve written before, Facebook’s greatest opportunity is in the $540 billion brand advertising market. That’s where marketers have been fishing for new customers, blasting their messages over TV, radio, and display ads in the hopes that they attain the magic combination of reach and frequency that will move consumers through a mythical funnel. The theory is that by exposing people to a brand’s message over time, they develop a fondness for the brand and a propensity to buy at a later date.

And yet, brand advertising hasn’t moved online en masse. Only about 18 percent of the brand advertising market has made the digital jump, largely because true long-term relationships with online consumers have been so difficult to measure and quantify.

But what HAS come online is direct marketing. In fact, Facebook’s archrival Google has grown the entire market of direct marketing by roughly $40 billion in annual revenues since it first started serving search ads. That’s because its performance can be quantified exactly in terms of very short-term transactions: from a click to a buy, more often than not separated by just minutes.

Facebook’s dreams of siphoning brand advertising dollars from other media are based on the premise that it can truly develop measurable long-term relationships with target consumers. And now, with the ability to target “lookalikes”—that is, to get in front of new potential customers who are, at least statistically, similar to real customers—they may be able to do exactly that.

For marketers, that means metrics and messaging that are far more individualized than the offline alchemy of “spray-and-pray.”

For Facebook, it means tapping the best parts of two worlds at once. One is the readiness of marketers to pay for what performs—as Google has demonstrated, there are tens of billions of dollars waiting out there for the one who succeeds. The other is the need for brands to begin relationships with consumers long before that last click—when it’s often otherwise too late to make a first impression.

We all recognize the value of a tool that can systematize and maximize relationships. But in the marketing discipline, the science of “customer relationship management” (CRM) doesn’t start until the first purchase. Facebook’s new tool offers the potential for brands to begin a relationship much earlier and nurture it so that a person moves from prospect to customer.

Most importantly, future tools and analytics could let brands measure each touch point along the way, to discover which interactions strengthen relationships, and which weaken them.

(illustrations via XKCD)

The resulting potential goes far beyond CRM and direct marketing. We’re talking about precisely targeted and nearly personalized brand advertising. That combination has been both a theoretical nirvana and an oxymoron. Until now.

Facebook is making a legitimate play to unite the opposite ends of the spectrum: CRM and brand advertising are both incredibly valuable tools in the marketer’s toolbox, yet they couldn’t be more different in terms of their use and impact. Brand advertising, at its best, combines the ability to reach a large target audience with a powerful experience that can create interest. CRM is a vehicle for micro-casting specific messages to already-identified individual targets at specific trigger points—all with the goal of moving each person one step closer to a sale.

If you could combine the best of both, you could blend the incredible reach of brand advertising with the extraordinary relevance of CRM.

Facebook’s recent efforts are allowing brands to extend CRM all the way up the funnel to form one-on-one relationships at the branding stage. Whether it will work or not, it’s a visionary way for Facebook to transform its customers’ businesses, and its own.

But most importantly, it promises to transform the currently context-free ads on the right side of the screen into relevant, personalized, contextual recommendations for users. And that’s a happier, healthier relationship for everyone.

Which Facebook surely hopes will help it conquer the most valuable relationship of all: the one with the brands who spend $540 billion a year on advertising.

Will the strategy succeed? That’s still a big unknown. But if it does, it’s going to be worth a ton to Facebook.