Facebook Open Graph and the Future of Personalization by SapientNitro

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Facebook Open Graph and the Future of Personalization Hilding Anderson and Rob Gonda, Marketing Strategy & Analysis, SapientNitro Introduction Facebook introduced Open Graph on April 21, 2010. In the time since, we have seen widespread adoption and recognition of the benefits of social affinity, networks of interest and personalization. This technology has created new opportunities — and risks — for businesses of all sizes. This paper will introduce you to what was announced and explore its major implications. Facebook Open Graph delivers several major benefits First, it enables brands to benefit from robust personalization without the massive investment in technology. No longer will the benefits of personalization — increased customer loyalty and profitability — be reserved for large firms such as Amazon and Netflix. Companies can improve their recommendations by utilizing customers’ likes and demographics associated with their Facebook profile. In addition, connecting using Facebook allows a richer shopping experience by allowing rapid feedback with the “Like” button and increases the reach of your marketing messages. Your customers can share likes outside your site, promoting your wares throughout your customers’ personal networks. Yet for major firms, it also represents a risk. Facebook is untested as a business partner, and its monopoly of consumer preferences will only increase its bargaining power. Privacy and access to personal data, as well, is a major concern for both consumers and for marketers. A background There are over 550 million people using Facebook worldwide, making it the de facto and broadest reach social network in the world. As you know, Facebook collects personal profile information such as name, school, and a list of friends. Increasingly, it is also collecting personal tastes — both through tracking which brands you follow, but also by remembering which products, news stories, or other

POINT OF view objects you “Like”, anywhere on the Internet. Combined with the information from your friend’s “Likes”, and follows, it can paint a detailed picture of your life.

The Open Graph There are three parts to Open Graph. The most commonly used are social plug-ins. 1. The Open Graph Protocol The Open Graph protocol allows Web developers to tag their Web pages for the social graph. This simple protocol is available to anybody, and can be added to any Web page. It enables Web site owners to identify their pages as “objects,” such as people, places, activities, groups, organizations, products, and services. This allows Facebook to index and map an ecosystem of all objects, their inter-relations and their connections with Facebook users. 2. Graph API Facebook’s Graph API is designed to provide access to every object in Facebook’s database: users, photos, videos, statuses, conversations, places, and their relations with each other. Developers use the Graph API to integrate custom applications such as Facebook apps, pages, sites, widgets, mobile apps, and use the Facebook database as a social data provider. There are two tiers of access. At the first, developers need to log into Facebook via the Graph API to get the user’s basic information. At the second level, they need extended permissions from the user to grant additional (read: non-public) information. With extended permission, the developers can query basic information and can also get a list of “Likes” associated with each profile — offering the marketer more opportunities to shape a custom experience. 3. Social plug-ins The goal of social plug-ins is to extend the power of Facebook and socialize the Web with a simple pluggable architecture. There are eight individual social plug-ins, which are the easiest way for anyone to integrate Facebook’s social features on their site. By adding a few lines of code to a site, visitors have the ability to engage with both that site and its Facebook presence and perform social actions without ever leaving the site.

POINT OF view All plug-ins use an iFrame tag on the page, which is hosted by Facebook. As a result, these widgets provide instant personalization and socialization of any site as long as the user is logged into Facebook. It also means that the site owner never get access to the user’s social profile or data, making the interaction seamless and secure.

Plug-ins in action Let’s run through some of the specific ways brands are taking advantage of plug-ins. 1. Levi’s Levi’s was the first retailer to implement the “Like” button in a commerce site. The strategy was to allow

people to “Like” each individual Levi’s jeans model, which provides instant share-ability within Facebook’s feed. Due to the nature of Facebook’s social widgets, users visiting the store will immediately see the number of people and which one of their friends “Liked” each jean model, as well as any comments from their social circle — all without logging in or performing any action — no coding, no integration beyond the simple metadata describing the Graph objects. Levi’s also allowed users to connect to their Facebook profile, and once logged in, the personalization went one step further, sorting and re-arranging the page to prioritize the most popular content within the user’s social circle — which could be a good indication of the most valuable content for the user.

POINT OF view The result represents a truly customized shopping experience based on your preferences and feedback. This technology has the ability to create experiences similar to best-in-class players such as Netflix or Amazon, except this time, Facebook is driving the experience through their Open Graph technology. And, in the future, rather than relying upon each site to build up this personalization database of preferences and attitudes, Facebook is positioning itself as the curator of personal profile data. Preferences can be used across Levi’s, Old Navy, J. Crew and Nordstrom’s — limited only by the customer’s privacy settings and whether they are using their Facebook login. 2. The Wall Street Journal The Wall Street Journal uses the “Like” button as well. Every article has the option to “Like” it, and if the user is connected to Facebook, it can also recommend articles based on what friends have “Liked”. Additionally, they can sign up to follow a topic and get updates within the Facebook news feed. This site also uses the Comments plug-in, which easily enables users to share their opinions on the site — whether it’s for an article, photo or other piece of content. The user can then share that comment on their Facebook wall and in their friends’ news feeds. 3. Yelp Yelp was one of the first sites to embrace Open Graph. It delivers personalized search results and recommendations based on friends. Notice, on the image below, that sites are required to notify users at the top of the page if they’re using Facebook to filter content. Yelp also uses the Activity Feed plug-in. This allows the user to see how friends have rated places, what they “Like”, comments they’ve left, and photos they’ve added, with recommendations based on that. Facebook users no longer have to go to Facebook to communicate with friends; they can now do so on Yelp, Netflix, Pandora — just about anywhere.

POINT OF view What are the implications? 1. For consumers With Facebook Open Graph, consumers can socialize no matter where they are. No longer is a social network a destination; rather, it has become a channel agnostic connection — and communication — provider that takes the power of Facebook to any destination. Furthermore, with a simple click of the mouse, it gives each user content that’s specifically targeted to their demographic, geography, attitude, behaviors and conversations — making their online experiences more meaningful. On the flip side, consumers are still getting used to this personalized social graph and, while they do, brands must find a balance between value and “creepiness.” 2. For marketers This is a no-brainer: By quickly implementing just a few lines of code, Open Graph will provide better engagement and experiences for a brand’s consumers. When someone clicks the “Like” button, for instance, two things happen. The “Like” shows up on the user’s wall, which broadcasts that brand to an average of 130 friends. But, marketers also gain access to Facebook Insights. Facebook Insights are metrics designed to help marketers understand the users who visit their Web site. It provides many internal analytics including daily activity, content shared, number of users, number of visits and more. This powerful tool must be taken advantage of because it gives marketers and developers an opportunity for advanced data mining. 3. For eCommerce In the past, eCommerce operated in a “here is what we have” kind of way. Now, it’s evolved into a place where people are shopping in social settings and using input from others before making purchasing decisions. With Open Graph, we’re about to see a future where eCommerce has the tools to know what shopers are looking for. The concept to social shopping simply mimics real-life behavior. People are social by nature, they seek opinions, approvals, recommendations, and by providing them the ability of achieving the social shopping needs without leaving the experience, we can drastically increase the success and conversion rate of any sell. 4. For online ads Previously, online ads consisted of static portals and display advertising. But now, ads are able to offer dynamic ad placement with contextual, behavioral, demographic and geographic targeting. Soon, the ad market will customize the ad display even more based on user preferences, community and other personalized characteristics. What the future holds As we move into the future, we’ve made some predictions as mass personalization becomes mainstream and sites continue to tailor experiences based on social affinity. For one, look for more graph-based commerce. Recommendation vendors will integrate Open Graph, and commerce platforms will elevate graph data and behaviors for powerful social targeting, tracking

POINT OF view and analytics. We’ll also start to see seamless integration between objects on Facebook and real life. Facebook will introduce geo-features, and physical places will become shareable. But, the most powerful and lucrative shift Facebook will make will be Facebook Ads units. Real-time, rich targeting and segmentation will become possible anywhere, and social ad unit formats will dramatically evolve. Friend voices, consumer voices and actions will become an integral part of ad messaging and content. The power of Open Graph is no small thing, and new innovations that are right around the corner have the ability to change the way we live our lives again and again. The implications of privacy are still playing out. How much information is too much information? How do we keep control? As long as the end consumer has full control, the future of personalization is heading in the right direction. ideaengineers.sapient.com

Hilding Anderson, Sr. Manager of Marketing Strategy and Analysis

Hilding Anderson is a Sr. Manager of Marketing Strategy and Analysis, and the regional lead of Research and Strategy for the Washington, DC office. He has over 10 years of marketing and technology consulting experience. He speaks on emerging trends, consumer behavior and new technology developments at major national events. Areas of expertise include consumer research and analysis, social listening and interactive strategy. He has worked with major domestic and international firms including Coca-Cola, John Deere, SanofiPasteur, Target, CDW, and Canadian Tire.

Rob Gonda, Director of Marketing Strategy and Analysis Rob Gonda is an industry visionary and thought leader, speaks on emerging technologies conferences nationwide, and combines unique approaches to technology and marketing strategies. As a head of Emerging Technologies at Sapient, Gonda is an interactive technical “guru,” who provides the knowledge and experience required to run high-level, multi-channel interactive campaigns that reach millions of consumers.