Social media and display advertising are strengthening an already robust revenue driving relationship. Facebook’s ad network eclipsed the billion dollar mark in 2010 and according to some industry experts it is poised to generate over six billion in profits. Facebook’s profile and user-based targeting practices are primarily responsible for its high level of performance. If a user “likes” Kim Kardashian, that user is likely to have ads for her E! Televisions Shows or clothing line displayed on the Facebook page. This is one example of effective targeting. Online advertising networks adhere to similar guidelines to drive positive results for their campaigns. It seems to be a successful model, right? Senator Alan Lowenthal of the California State Senate seems to think otherwise.
Lowenthal is leading the charge for a Do Not Track bill in the state, legislation that would require CA online companies to provide an opt-out privacy option for potential customers. Haven’t we been here before? The quick answer is yes. In 2010, many politicians carried the torch for more stringent privacy regulation. Ultimately nearly every proposed bill flopped or lost steam. Why? Here are two big reasons touched on earlier – social media and massive revenues. People on social networks are all about sharing information. They “like” musicians, retail stores, moves and even commercials. They tweet about fashion, entertainment and anything they deem important. They are willingly giving up their privacy to drive the conversation. And in driving the conversation, they are supplying digital advertisers with data to use not for vague, underhanded purposes but to deliver highly relevant, cost-efficient ads to them.
And then there are the billion dollar revenues generated through display advertising and social media. These are not potential profits. These are real deal figures. California is teetering on the brink of bankruptcy. Wouldn’t it behoove Lowenthal to start backing the money maker and cease and desist with the politicking?