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July 26, 2012
Open Questions About Facebook's Open Graph
 
Facebook’s Open Graph has potential, but it’s problematic. The risks and benefits of gathering and connecting data streams from across the Web through the Facebook platform still aren’t clear to most marketers.
 
This technology play puts Facebook at the center of data streams that will soon rival Epsilon, Equifax, Experian, Transunion, or FICO. Soon Facebook will collect, hold, and be able to slice and dice huge amounts of personal and behavioral data on hundreds of millions of individuals. The marketing potential and the privacy problems are obvious.
 
The value proposition is even more problematic when you realize that Facebook is not a benign player. They intend to dominate database marketing by controlling the inputs and merchandizing the outputs. Seen through this lens, there are two perspectives on the value and vulnerabilities of Open Graph.
 
White-Hat Scenario
Facebook the beneficent created a technology platform to gather and stream information across all platforms. The evolution of Social Graph into Open Graph enabled brands to track, engage, and interact with consumers in many places. This began with the migration of the “Like” button and continues to include actions done on third-party apps and branded websites.
 
Open Graph promises to take millions of unknown and undifferentiated brand fans and turn them into targetable segments, effective advocates, and viral ambassadors that will penetrate new markets and build measurable connections between social interactions and sales. Open Graph aspires to be the universal social CRM tool that allows brands to monetize their fans and friends of friends. In Brian Solis’ terms, Open Graph will enable “retention to become the new acquisition.”
 
No longer confined to Facebook, a brand now can capture and leverage word-of-mouth advocacy and brand loyalty across platforms. By connecting friends with friends and alerting friends about the interests and actions of their friends, brands build a referral network, which, when activated, is more impactful, more credible, and more responsive than all other forms of advertising.
 
Using this network gets a brand more content reach than the measly 16% that brands can expect on their branded Facebook page. The benefits of using Open Graph are extended reach and credibility, broader and more nuanced access to the Facebook audiences they’ve already accumulated, and cues for targeting Facebook ads better.
 
Black-Hat Scenario
Facebook insidiously created the rope for brands to hang themselves. By connecting with customers and prospects through Facebook, brands cut Facebook into traffic and relationships they might not otherwise get. Since more real interaction takes place on branded websites than Facebook pages, Open Graph allows Facebook to bogart brand engagement by collecting data on its platform and on everyone else’s.
 
Once collected, Facebook the beneficent will sell brands access to their own data using targeting tools derived from their own data sets. They will guarantee better results, since they already filter content aimed at brand fans and keep access and reach artificially low. But for an additional investment in Sponsored Stories, Facebook will offer more impactful ads that work harder than regular Facebook ads or digital display ads. Once you buy into Open Graph, Facebook has your data and your marketing budget by the short hairs.
 
Conclusion
Today there isn’t enough Open Graph campaign data to make a judgment call. Facebook is mounting an effort to reach out to brands and agencies to orient them to the potential of Open Graph and bring them into their ecosystem. But details of this “Shipyard” initiative are still sketchy.
 
Facebook needs to capture this conversation quickly before its rivals derail its plans. They understand that Facebook’s developers are focusing on the data while most brand marketers are still trying to get their heads around the fundamental dynamics of social media engagement. The battle won’t be joined and the true scenario won’t be played out until brands and Facebook get on the same page.

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Danny Flamberg, EVP Managing Director of Digital Strategy and CRM at Publicis based in New York, has been building brands and building businesses for more than 30 years.Prior to joining Publicis, he led a successful global consulting group called Booster Rocket, as Managing Partner. Before becoming a consultant, he was Vice President of Global Marketing at SAP, SVP and Managing Director at Digitas in New York and Europe and President of Relationship Marketing at Amiratti Puris Lintas and Lowe Worldwide.
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