By Lindsay Blakely
October 30, 2007

By Lindsay Blakely

With Facebook widely expected to unveil a big advertising initiative next week, ad network AdBrite today is launching its own way for advertisers to target consumers on the social networking site.

The question, of course, is if Facebook gets into the ad game, will there be room for anyone else?

“Facebook may have a brilliant new way to do ad targeting based on profiles,” but that doesn’t mean it will crush the ad network business, insists AdBrite co-founder Philip Kaplan.

AdBrite lets advertisers buy space on websites of their choosing or target groups of consumers according to geography, demographics, keywords or channels, like health and finance. Web developers can also use AdBrite’s self-service marketplace to sell real estate on their websites to advertisers. AdBrite now will facilitate buying and selling ad space on Facebook applications. Like other ad networks, AdBrite is trying to profit by connecting social network developers with advertisers.

Kaplan notes that when Facebook signed on Microsoft last year to provide its advertising the deal didn’t hurt ad networks’ business and he suspects that whatever Facebook has planned won’t either.

“Nobody has an exclusive on Facebook,” he says, “unless the company changes its policies. But that would derail the idea of having an open platform.”

Others in the ad business aren’t quite so confident. Scott Rafer founded Lookery in July as a Facebook-specific ad network. But Lookery is now looking to take its ad business outside of Facebook by gathering data it collects on smaller social networks and marketing it to other developers and advertisers.

“We’re going to be excluded,” Rafer says. “I’m of the opinion that Facebook is not going to set a rule that they’re the only ad network, but they’re going to do a good enough job that there will be no significant business left for third-party ad networks.”

Facebook has declined to comment on its advertising plans.

Rafer says Facebook’s big challenge is to figure out how to spot social momentum behind products. For example, the social network needs to find a way to pinpoint and capitalize on a wave of popularity behind a new book or music album.

Peanut Labs is another new company that is trying to make money off social networking but by selling market research rather than ads. Facebook application developers can offer virtual currency, or peanuts, to their users in order to get them to participate in surveys that collect information about their interests. Each completed survey is worth from $3-5 and the revenue is split equally between Peanut Labs and the developer. The company is only three months old, but founder Murtaza Hussain claims it has a reach of 10 million users and paid out $100,000 to developers last month.

Hussain says traditional ad networks like AdBrite should be worried. “The mothership will always get better cpms and targeting than anyone else’s.”

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