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Facebook Open Graph and the Future of Personalization


See how this technology has created opportunities - and risks - for businesses of all sizes. Point of View By Hilding Anderson and Rob Gonda Marketing & Strategy Analysis

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									           POINT OF view
            POINT OF view

Facebook Open Graph and the
Future of Personalization
Hilding Anderson and Rob Gonda, Marketing Strategy &
Analysis, SapientNitro

 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

                         © Sapient Corporation, 2011
          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.

                         © Sapient Corporation, 2011
             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.


                          © Sapient Corporation, 2011
           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.



                        © Sapient Corporation, 2011
           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

                        © Sapient Corporation, 2011
                  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.

                                         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, Sanofi-
                                         Pasteur, 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 cam-
                                         paigns that reach millions of consumers.


                               © Sapient Corporation, 2011

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