Facebook has introduced Facebook Ads, a system that allows businesses to target more audiences more effectively and efficiently. Using the unique characteristics of social networking sites, the ad system will allow businesses to build their own pages, while facilitating virally spread messages and providing an interface that will analyse activities of consumers. Facebook Ads launched with three separate sections that according to Facebook’s founder and CEO, Mark Zuckerberg will ‘represent a completely new way of advertising online."

Companies can now create their own unique Facebook page starting with a blank canvas and the option of adding many of the large number of widgets already developed. These can enable customers to book reservations, provide reviews or purchase tickets. "The core of every user’s experience on Facebook is their page and that’s where businesses are going to start as well. The first thing businesses can do is design a page to craft the exact experience they want people to see," said Zuckerberg.

Organisations will be able to purchase SocialAds for users who have shown an interest in the brand and a unique endorsement will appear on the user’s profile page. Advertisers will be able to purchase social ads through auction-based systems based on the demographics of different groups. According to Zuckerberg, "social actions are powerful because they act as trusted referrals and reinforce the fact that people influence people. It’s no longer just about messages that are broadcasted out by companies, but increasingly about information that is shared between friends."

The final part of Facebook’s new product was Insight. This will provide advertisers with an interface that allows detailed analysis of how successful a campaign is progressing allowing advertisers to adjust campaigns as necessary. "For the last hundred years media has been pushed out to people, but now marketers are going to be a part of the conversation. And they’re doing this by using social graph in the same way our users do," said Zuckerberg.

This follows the news earlier in the week of MySpace launching its own advertising platform in early 2008. SelfServe, the social networking site’s rival to Google AdSense and Facebook Ads allows small business users, brands and politicians to purchase, create and analyse its own advertising on MySpace. Users can also carefully target audiences based on a range of factors including age, geography, and interests. According to Michael Barrett, chief officer for Fox Interactive Media SelfServe "translates our massive amounts of self-expressed user data into highly targeted, interest-based segments, enabling us to better serve the exact right ad to the right person at the right time."

However, some groups have questioned whether social media sites should be able to share the data it has on its users. Days earlier, the US Federal Trade Commission expressed concerns that marketers and Internet companies might be infringing on people’s privacy in the way it targets demographics using online data. "People should have dominion over their computers," said Jon Leibowitz, an F.T.C. commissioner. "The current ‘don’t ask, don’t tell’ in online trafficking and profiling has to end."

Kathryn Montgomery, author of the book Generation Digital: Politics, Commerce, and Childhood in the Age of the Internet agrees. "Despite all the assurances that the industry gave to regulators and the public, it sounds as if their business plans sort of fly in the face of promises to operate without exploiting young people. If you are hanging out with your friends and talking about who you are, what rock stars you like, and so on, you don’t assume that someone is sitting there and taking down every word you’re saying and putting it into some kind of algorithm."