The power of the Facebook database: tailoring advertising to each individual consumer.
http://www.haaretz.com/news/national/game-theory-1.378442
This article details the rise of a new model of marketing and advertising where companies use Facebook’s database of user information to provide customized advertising to each customer, suiting each individual’s preferences and desires. A small advertising company in Israel named Adotomi recently has gained admission into the select list of companies that are allowed to use the information available in Facebook’s considerable database. Specializing in videogame marketing, Adotomi was already established in the gaming world. As Facebook wanted to create its own stamp on the gaming market they partnered with Adotomi for this unique project.
Essentially, whenever a user posts data about himself on Facebook, the information becomes available to Adotomi and anyone else who has access to Facebook’s database. Unless the information a user provides is specifically protected by the privacy settings that a user enables on his or her profile, the data is freely available. This data, which can include hobbies and music preferences, can help Adotomi to figure out what videogame the user is most likely to play. Thus they can customize their marketing and advertising to suit the user. Adotomi’s CEO Joe McCormack says that this new advertising model is likely to be ‘extremely effective’ because if advertisements become consumer based, the consumer can be exposed to products that would benefit his or her life and the product can get more visibility to the right market – a win-win situation!
This is closely related to the topics like Game Theory and Strong Triadic Closure Property, of which we speak of in class. In essence, if we take this system of advertising as the norm, the relationship between the two players, the consumer and the product, is a form of Nash equilibrium as both will display their best responses to each other. The product will appear as an advertisement on the consumer’s page whilst the consumer will make the best choice out of the products available to him. In addition if the consumer has strong tie to a certain hobby like weightlifting for example, an advertisement for a Home-gym could be helpful to his life, helping create a new tie between the product and the customer. If this new marketing model becomes popular in the future, companies could use game theory to manipulate customers into buying their products.