As could be expected there is a lot of strong reaction to Facebook's new SocialAds program, ranging from the interested to the irritated in some instances but also pointing towards legal concerns in other instances. As noted in PC World a law professor at the University of Minnesota pointed out that Facebook might be in violation of privacy statues in several states - including New York and California.
At issue is SocialAd's appropriating the name or likeness of a person for commercial purposes without explicit consent in their terms and conditions for such uses. It's an important and compelling angle to the new system that probably should have been thought through more carefully by Facebook, but also one which points to further refinements that might increase the potential value of the innovative contextual ad program.
The lack of a voluntary opt-in for SocialAds is certainly a potential legal concern but more importantly it does not allow advertisers to take full advantage of the power of personal endorsement. By linking ads to user posts without explicit permission the ad is only loosely associated with a person's personal endorsement of a product or service - one assumes that there's a positive impression of a product or service if someone bothers to mention it in their Facebook posts but the strength of that endorsement is not easily understood by someone viewing the ad. Is it a like, a love, or relative indifference? If I went to that restaurant that I mentioned in the post, was the food really good or was I just name-dropping to impress my friends and colleagues - and did I actually pick up the check?
A potential solution to this dilemma is seen in the other new ad feature on Facebook - pages for products and brands. Individuals can declare themselves "fans" of commercial entities with Facebook pages, a feature that seems to have been used mostly by a company's employees so far but that could expand in time to include real fan bases. This sort of passionate and loyal grass roots backing is what author Kevin Roberts refers to as "lovemarks," endorsements that have legs far longer than even superstars such as Michael Jordan backing the brand of basketball shoes for millions of dollars. Lovemarks get their endorsements for free - and with a little tweaking Facebook's SocialAds could be adjusted to tie "fan" endorsements to SocialAds placement to ensure that their presence in a fan's posts represented true enthusiasm for an advertiser's brand.
What has gone begging in this equation so far, though, is an obvious opportunity: if personal endorsements from sports superstars who aren't necessarily passionate about a product can command millions, why shouldn't the personal endorsements of Facebook members via SocialAds for benefit the person giving that implied or explicit endorsement more directly - and be under their control more directly? For example, if I am a person who's very influential in my online community or in a real-world community shouldn't SocialAds be able to reward me financially for their endorsement - or to enable them to funnel funds paid by an advertiser to place a SocialAds ad to their favorite charity or cause?
While such a mechanism alone would not address the potential legal exposures for the SocialAds program it may provide the incentive for people to participate proactively - and, in doing so, accept the legalisms that would apply to their use of personal endorsement. There are some potential complexities in such a system - would a member set a minimum bid for their endorsement rights or would this be determined algorithmically, or both? - I think that this is the likely direction in which systems such as SocialAds are likely to head. If being rewarded for endorsements works for sports superstars and other notable figures in mass media, why shouldn't it work in more highly focused social media as well? It's an interesting issue that is likely to unfold in a bigger way over the next several months.