Facebook's new mobile ads too invasive?

The social network plans a bold strategy for its app users.

By TheWeek.com Jul 10, 2012 11:45AM

Facebook (FB) wants to show investors it can make real money with its mobile platform. According to The Wall Street Journal, the 900-million-plus-member social network plans to launch an advertising product that will deliver targeted ads to the Facebook app, based on the other services users frequent.

The feature reportedly will use information gathered from Facebook Connect, which lets users log onto third-party websites and apps -- including Amazon (AMZN), LinkedIn (LNKD), and Yelp (YELP) -- using their Facebook identity. The idea is that the social network will monitor the services a person uses and shove an ad into their mobile device's News Feed. For example: If someone downloads, say, the Yelp App via Facebook, the social network could charge a sizable fee per installation.

The move, while potentially lucrative, is a huge departure from the industry norm, as chief rivals Google (GOOG) and Apple (AAPL) don't use app information to beam targeted ads at users. Is the social network's new advertising plan too invasive, or a smart progression in the largely untapped arena of mobile advertising?

Facebook has to make advertisers happy somehow. "No one should be surprised that the advertising industry would exploit every piece of information it can get its hands on to reach the individual," says Michael Hiltzik at The Los Angeles Times. Advertising has always been "intrusive to a degree," but consumers have the luxury of ignoring them, by thumbing quickly past a magazine ad or using a pop-up blocker online. That's the bargain we've implicitly made with content providers. But "the more intent we are at ignoring" ads, the louder providers will clamor for our attention -- as they should.

Consumers have every right to be incensed. Facebook users are already concerned about privacy, says Sarah Downey at BostInno. Remember last month's @facebook.com email address snafu? The last thing they want is for the social network to gather even more data about them. When Facebook allowed users to vote on a new data use policy, 87% of voters opposed the changes. Facebook users don't take kindly to the idea that they're "the product being sold," and likely won't in this case, either.

Facebook could pull this off. If Facebook's "going to do it, they should be transparent about it," consumer privacy advocate Justin Brookman tells The Wall Street Journal. "Once you're signed in, are you really expecting that Facebook is going to be watching you while you're on there?" If the social network is clear about its intentions and provides a way for consumers to opt out, maybe the backlash won't be so bad.

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