Creating some CPA-based relationships with a few publishers will provide you with an appreciation for what’s involved in affiliate marketing. The question is, when do you make the jump to a major network?

You’ll know the time is right when you require more advanced tools for productivity and scale. The publishers themselves also understand the value of networks, and some of the more successful publishers may not work with you unless it’s through a network.
You should know, however, that you don’t have to give up control when you partner with a major network. A hybrid model is possible where you retain 100 percent control and transparency over the program, but your internal resources are applied to the tools of an established network. This do-it-yourself (DIY) strategy means you still manage the program and communicate directly with the publishers, but you centralize the management of all your relationships using proven tools that are easy to use and cost-effective. The cost savings are delivered through very low fees and the streamlining of your daily activities, including creative asset management, commission structure, offer management, communications and reporting.

If you’ve decided that your company is ready to turbo-charge your DIY strategy by partnering with a major network, keep the following tips in mind:

1. Don’t compromise on transparency. If you already have experience managing publishers directly, you’ll have a good idea of what you want from a network in this area. Make sure you have full access to publisher contact information and the details about their site. There should be no restrictions on contacting publishers.

2. Evaluate your internal skill set. One of the biggest mistakes advertisers make when going down the self-service path to affiliate marketing is being unrealistic when considering the time it takes to nurture and grow an affiliate marketing channel. You also need someone that can spot trends in the reporting, yet can also roll up their sleeves and keep the program up-to-date with fresh creative and offers.

3. Understand the limits of your team. To help with seasonality and to plan for the unexpected, choose a network provider that offers flexible service options. For example, you may need help with publisher approvals at certain times of the year, or you might need help with creative around the holidays. A network with a la carte service offerings will likely be more cost-effective compared to signing a long-term, full-service contract.

4. Leverage the tools. In a DIY model, you can get access to the same tools that are used in the full-service model. You’re just using the tools yourself. Tap into them and you’ll learn how to be productive while optimizing publisher communications and maximizing link distribution.

Shadesshuttersblinds.com has been taking a do-it-yourself approach to affiliate marketing on the network of my company, LinkShare,  and has seen great success.

“It’s really about focus. You have to be strategic and at the same time devote the right amount of time to the tactical day-to-day requirements of running a well-managed program. At this point, I can’t imagine running our program without the advanced tools and reporting of a major network,” said ShadesShuttersBlinds president Louis Lyons. “Our program is growing faster and we’re able to respond to the needs of publishers more effectively.”

Not all advertisers will achieve success. To make the most of this approach, here are some best practices to consider:

• Devote time to the program: It’s easy to overlook the management and maintenance as well as the time required to foster strong relationships with publishers, but if you allocate your time effectively between communications, managing your offers and creative, and doing the right analysis, you’ll see a consistent rise in performance and results.

• Invest in resources: Include training your internal team and taking advantage of the collective experience of your network partner. Thiscombination ensures you’re not working in a vacuum and allows you to make the most of your investments. Select a network that has training options.

• Master the marketing principles: The basics of product, price, promotion and placement still apply when it comes to the online channel. Extend your marketing calendar to your affiliate marketing channel. Integrate your marketing messages to ensure consistency across all your channels while customizing your messages according to audience whenever possible.

• Keep up with the industry: Make sure your offers are current, compelling and competitive. Publishers have a lot of options. If your competitor is offering a better commission, then you can guess who they’ll promote.

While the self-service model on a major network isn’t ideal for every advertiser, it can be a way to cut costs while tapping into a very advanced yet easy-to-use set of tools for building a long-term affiliate marketing strategy.

In other news, a woman in Michigan is suing the distributor of the recently released movie “Drive” because the trailer suggested it there would be more car chase scenes. I’d suggest the defendants cite “The French Connection” precedent — one great car chase is worth the entire film.

While the latter case will likely be thrown out immediately (if not un-filed in embarrassment), the five against Facebook may not have much of a chance either considering that similar suits brought against online companies for wiretap law violations were summarily dismissed — if not settled first. As Future of Privacy Forum Director Jules Polonetsky explained to MSNBC, in addition to lack of grounds for a wiretapping case, many of these suits get canned because the defendants can’t show harm.

There’s definitely a whiff of ambulance-chasing in the air. One of the suits seeks statutory damages of $100 per day for every member of the class (the lawsuit is trying to certify all 150 million U.S. Facebook members as a class — so $15 billion a day, huh?) or $10,000 per violation, plus punitive damages, attorney fees and court costs.

Evidence disclosed in these lawsuits (if they make it anywhere) could be quite useful in understanding how Facebook maintains collected browsing data, but there’s a third-party not looking for Facebook’s money that could prove to be a better auditor: the Federal Trade Commission. And its findings could shake Internet consumers and tech developers out of our online privacy malaise.

But What’s Facebook Actually Done Now?

Right as the addition of Facebook apps freaked out some users about how much data was headed back to Papa Zuck, Australian developer Nik Cubrilovic illustrated that when you log out of Facebook, nine cookies still hop on your browser including the one with your unique account number. These stay on your browser until deleted (think about if you access the social network from a public computer) and record whenever you hit a site integrated with Facebook (which is like the half the Internet, right?).

Probably because we haven’t had a good Facebook privacy scandal in a while, the story got picked up across the media and Zuck & Crew were forced to answer. First off, they changed the logout rules so the cookie containing the user id (A_USER) was deleted on sign-out, along with A_XS, which is used to stop “cross-site forgery.” Facebook explained that the rest of the cookies are used for security purposes — pretty much challenging hacking attempts by ensuring users are who they claim to be on login.

Well, that explanation hasn’t sat right with everyone. DATR, the cookie that sends data back to Facebook from Facebook-integrated sites whether they’re logged in or not, was first noted by The Wall Street Journal (complete with hyper-paranoid and obtuse/not quite correct headline: “‘Like Button Follows Users”) back in the spring, but DATR was removed before publication of the article.

It’s back now – Stanford Security Lab’s Jonathan Mayer noticed it had begun appearing a few weeks and Cubrilovic asked Facebook just what it’s doing with the data sent from third-party sites:

“Facebook keeps the data collected for up to 90 days and then delete it. I believe them when they say this and that they are not hiding anything, but I also believe that our definitions of tracking differ. If you set a cookie on a users machine from one website, and then read that cookie from that persons machine from another website, that is tracking (emphasis in original)…. [I]t is still tracking and still has the potential to violate the privacy of users simply by being collected.

“At a minimum they are tracking by reading the cookies, and if you look further into some of the patents that Facebook has filed, as well as their business model (advertising), it is not a big leap to make to conclude that Facebook are tracking users and analyzing that data.”

Yep — speculation that it’s being used or could be used for advertising purposes, but no smoking gun. If Facebook is even using the cookie for security purposes, it’s associating browsing data with specific users. However, there’s no evidence such profiling is being used for targeted advertising. All the targeted advertising on Facebook is based on user-submitted/shared information.

Ad Network? Nah…

And Facebook has a great counter to claims it’s building profiles of browsing data: We don’t sell the data to third parties or have an ad network that employs behavioral targeting, and we’re not building one.

Of course, many in the industry are incredulous about that plea. Why? Money: Facebook is reportedly set to bring in $4 billion in ad revenue from on-site advertising, but that’s nothing compared to what Google brings in during a quarter.

And as it hit the 800 million user mark (with about half the U.S. population on the network), questions arose about the future of the network in general — after seeing Badgeville’s easily insertable social layer, I could imagine activity on Facebook the site slowing down. I was impressed with the introduction of apps, which nearly effortlessly connects off-site activities with the social network, but I still wonder if it’s about to hit peak velocity.

At a Federated Media conference during Internet Week, Facebook Vice President of Global Sales Carolyn Everson strongly pushed the (relatively) new Sponsored Stories unit, suggesting that Facebook wanted to “partner with brands” on their advertising. Facebook has long eschewed typical online advertising products (Everson suggested homepage takeovers would never appear on Facebook — but what about sleeves like on MySpace? No on that too?) even when it lead to disasters like Beacon (which also got Facebook sued — successfully).

Sure, Mark Zuckerberg wants to innovate in the online advertising arena, but it’s still hard to believe that Facebook simply won’t take advantage of the huge revenue opportunity staring it in the face – it’s got the data, it’s got the reach, so where’s the behavioral targeting platform and display network?

On the other hand, Zuck may be more concerned about the long-term survival of Facebook the brand and the social network (or possibly as a deeply integrated social layer stretching the Internet) that he won’t take the money and run.

Also, if Facebook was to turn on an ad network tomorrow, the public ire at the about-face could be overwhelming. And now there’s a service around that disenfranchised users could arguably jump to.

Online Privacy Fatigue

I caught a GigaOm piece by Derrick Harris lamenting the lack of media coverage regarding The Wall Street Journal’s privacy policy update that included the use of new registrants’ personal identifiable information in building online profiles — for content purposes only, they swore. (I had an email give and take with a WSJ press person who denied me any clarification on whether profiles built with PII and browsing data would be used in selling Harris’ story targeted advertising.)

One paragraph of particularly grabbed me:

“I don’t particularly care that the WSJ expanded its data mining reach — it’s the company’s right as long as we treat personal data as property that can be contracted away — but I do care what the lack of discussion says about how we think about online data privacy. If this had been Facebook making a similar move — or, actually, making a much less aggressive move — you couldn’t escape the outcry.”

Interestingly, this story was published on Oct. 4, when the outcry over the logged-out cookies was starting to boil. I was one of the proud few who immediately jumped on that story because it sounded like the WSJ network was implementing a profiling system that WSJ reporters had sensationalized in the year prior.(I have no issues with WSJ’s data mining either.)

But I was actually going to leave the latest Facebook “privacy scandal” to sites like ZDNet and Inside Facebook, which have offered great analysis. Truth be told, I just wasn’t that interested in diving into this mess again, painstakingly reading all the coverage and research to figure out what the hell was actually going on — whose claims were overstated, whose were obtuse and what the data actually meant. I just did it with Apple on “locationgate” and Hulu/KISSmetrics in regards to e-tag tracking.

Just like a lot of the ambivalent people (consumers and OBA industry folk) out there that Harris is worried about, I got a bad case of online privacy fatigue. There’s so much back and forth and so many accusations shouted into the media megaphone, but nothing really ever happens. Nothing ever changes. E.g., Facebook shut down the DATR cookie after WSJ got word and now it’s back on duty.

Today a research paper is being released at an event in Washington, DC, sponsored by the ACLU, Center for Digital Democracy, Consumer Action, Consumer Federation of America, Consumers Union, Consumer Watchdog, Electronic Privacy Information Center, Privacy Rights Clearinghouse, US PIRG and World Privacy Forum. The press invite claims it will definitively prove that tracking methods aren’t anonymous. When I sent some feelers out to industry contacts for their takes, I mainly received back yawns. Oh, this shit again.

The keynote at this speech, however, is being given by Federal Trade Commission Chair Jon Leibowitz, who, according to the press invite, will “discuss the proposed FTC framework for protecting consumer privacy and ensure industry can continue to innovate on the Internet.”

It so happens, EPIC joined eight other online privacy advocates (almost all involved in the above event) in writing a letter to the FTC asking the agency to investigate Facebooks use of tracking cookies post-logout. I hope they plead their case again because an FTC investigation is the ideal solution for both examining Facebook’s data collection practices and stirring the online privacy fatigue.

While the evidence disclosed in the suits mentioned at the top could be useful, it’s hard to ignore the ulterior motive — the remuneration demanded (for what harm?) in the lawsuits kind of shoots them in the foot. On the other hand, an unmotivated, third-party auditor could show us just what browsing data Facebook has and what it is doing with it.

And it’s time for the FTC to talk less and act more. For at least two years, the FTC has been fanning consumer fires over privacy controls while promising OBA companies it won’t “strangle the golden goose.” But what’s it actually done? File suit against some affiliate marketers? Great — that totally solved the belly fat ads crisis.

Granted, I’ve gotten used to the speed of digital innovation and forgotten the lurching pace at which Washington moves. But agency members constant tsk-tsking about the industry pulling its act together has only highlighted the lack of progress in an OBA framework.

Well, here’s your chance for action, FTC — to actually show you’re protecting online consumers while insuring a fledgling (relatively) industry can continue to flourish. Investigate Facebook’s use of tracking cookies, give us a detailed report. And please don’t take two years to do it….

Casting a digital “Tempest,” I’d pick Yahoo as the drunk (the company’s actions sometimes suggest it’s not sober), Microsoft as the monster (do you remember the 90s?) and AOL as the jester (almost every new initiative seems like a joke).

The Internet portals three — Microsoft, AOL and Yahoo! — have agreed to a pact in which they sell the remnant display inventory for each others’ content networks, the kind of stuff that typically gets tossed off to the networks and exchanges for audience targeting.

So say Yahoo! is structuring a campaign aimed at sports fans and it wants to spice up its reach, it can sell some of Microsoft and Yahoo!’s sports-related inventory, with the revenue split between the parties. That revenue will definitely be higher than if the inventory went onto RTB-enabled exchanges.

Peter Kafka at All Things D notes that the plan sounds similar to the plan of supply-side platform 5to1, which aimed to build “an online advertising alliance consisting exclusively of major media publishers.” Lo and behold, who acquired 5to1 but Yahoo!, whose EVP of Americas Ross Levinsohn played a role in founding and funding the startup.

Since we heard whispers that 5to1′s technology was more theoretical than existent, we thought the acquisition was allowing Levinsohn to reassemble his old Fox Interactive Media team, but it seems bigger plans were afoot. This also makes us raise our bet on Levinsohn taking over as CEO for the departed Carol Bartz.

But I’m curious: do you guys think this is a fortuitous business arrangement or last-ditch effort to fight off an invading force — namely Google?

Reading MG’s outstanding piece reminded me of my own piece from last month, “Google on the Playground,” I offered some suggestions for Google on how to seem more like a friend than an enemy. Today, I’ll look more at the relationship with Google from the perspective of advertisers and agencies.

If in pre-Internet marketing, John Wanamaker had no idea which half of his marketing budget was being wasted, today, marketers have a much better idea of what is working, and in so many cases, it is the search engine marketing results from Google which are working. This makes it hard for any marketer to forsake or even reduce Google’s share of their online ad budget.

But even if Google search is generating the best ROI, advertisers and marketers need to ensure that online marketing is not dominated by one or even a handful of solutions.  Advertisers/agencies need to:

1. Diversify their ad spend – It’s never good to put all of your eggs in one basket, and the same is true for an online ad budget. Advertisers should seek out other ad opportunities – namely Yahoo! / Microsoft – but also other ad networks, solutions and exchanges. This is the only way to create competition which will keep pricing competitive.

2. Invest in truly new/emerging technologies – I remember an ad agency executive once telling me how he liked to buy ads for clients in new magazines (this was 20 years ago) because of the novelty factor of advertising in a magazine’s inaugural issue.

On a similar note, agencies and advertisers should reserve a portion of their ad budgets for new and exploratory ad vehicles. This will help new ad solutions get off the ground while providing these entrepreneurs with much needed advertiser and agency insights. And there is buzz value in advertising in emerging technologies and reaching early adopters.

3. Broaden their ad spend by focusing on ROI and not just dollars – Let’s say ad network XYZ gives you only 70% of the ROI of Google Search. Why not offer them 70% of the budget for a comparable campaign? Most ad solutions would accept a smaller budget in order to stay in the media plan, and the advertiser doesn’t feel like they compromised their marketing objectives.

Google didn’t become a frenemy all by itself. Advertisers and agencies gave Google the power to become a frenemy. By correctly managing their relationships with Google and the rest of the companies in the online advertising ecosystem, advertisers and agencies can ensure a fair and competitive industry. Otherwise, the frenemy might become an enemy.

So what are you doing to restore the balance of power in the online advertising ecosystem?

Unfortunately, we all know that it’s just not that easy, and that there are many variables that play important roles in determining success or failure. Having overseen hundreds of ad campaigns, we’ve observed several key advertiser behaviors that seem to correlate with the winners.

Although some of this may seem rudimentary, basic or obvious, from where I sit — these points are overlooked more often than you would expect. Here are five key ways advertisers can get more from working with ad networks.

1. Find someone on the inside that can, and is willing, or motivated to help you. Account manager, account executive, ad ops, etc… These are the people that will help make your campaign a success.

A good network representative can be just as valuable as your in-house colleagues — if you let them. Once you have found that person, work with them, not against them. Each ad network is slightly different and each will have a different set of standard rules for how success is best achieved based on your campaign goals.

2. Be honest about your campaign goals. This might sound crazy and maybe even seem obvious, but the more information that you can share with your ad network point of contact, the better your possibility of a good campaign outcome.

If your goal is a $20 CPA, the worst thing you can do is tell your contact that your goal is $10. It may seem like a great way to produce a better performing campaign, but if the real number is $20 and $10 is all but impossible to hit, the ad network will think they are not able to produce a successful campaign for you. Then nobody wins.

Remember it’s in the ad network’s best interest to produce the highest ROI possible. So, if your stated goal is $20 and they are actually coming in at $10, everyone will be happy.

3. Be realistic in your expectations. Unless you are paying someone on a CPA/CPL basis, campaign performance will always vary — hour-to-hour, day-to-day. As I like to say, “It’s not a vending machine.” Every time you put a quarter in, you are not going to get a snickers bar. Be prepared to ride the waves and evaluate performance on many different levels.

Cheap clicks or impressions do not always mean a bargain. Consider where the media is running as well as back-end ROI metrics. If you are buying cheap traffic with cheap clicks, but all of your leads are gibberish, you really haven’t achieved much. Sometimes you really do get what you pay for. Also, if it makes sense for your business, consider the lifetime value of a customer, not just the immediate action or reaction of a click to convert.

4. Don’t be afraid to ask for special considerations, especially if you are the key person buying media for a major brand. For example, maybe there is something that worked well at another network that could easily be repeated. The ad network may have some non-standard targeting capabilities or ad units that you could benefit from. You can even ask for something that wasn’t mentioned in an initial call.

Ad networks love to put together special deals for desirable clients. You may not always get a “yes,” but it never hurts to ask.

5. Constant communication is crucial, especially in the early stages of your ad network campaign. It may take some heavy lifting to get things up and running smoothly. However, once you reach cruising speed and performance stabilizes – you can scale down to more infrequent communication.

Working with ad networks can be a powerful and profitable strategy. However one size does not fit all and you may need to focus some initial extra energy to discover how best to partner with each Ad Network that you work with.

Or put another way… in 2007 I described the world with a simple diagram. Today Terry Kawaja has an industry “LUMAscape” that has logos so small I can’t even read them.

FROM…

TO

Wow. What the hell happened? We used to have this easy world… publishers sold to advertisers, there was one exchange and then a lot of ad-networks with different pitches. How the hell did we get from there to the above hodge podge “ecosystem” that nobody understands.

To help bring some clarity to this world I’d like to kick off a new series… “The RTB Display Ecosystem.” This first post is will primarily be musings on hype… as before we can talk about what’s really happening we all need to step back for a second and realize 90% of what we read is… well… bullshit.

How VCs and Bankers brought hype to the industry

I’m sure by now you’ve seen the below diagram. It’s confusing, cluttered and supposed to explain to the world how the new Display ecosystem works. Hundreds of companies have incorporated this slide in their presentation. I haven’t gone to a single conference where this hasn’t come up multiple times.

Here’s the hard truth people don’t like to hear: the display world is actually not that complicated.

Yes, the ecosystem has evolved. Exchanges are core tenets of display and there certainly has been a ton of innovation in the data space. But that doesn’t make for 20 boxes on a slide. What really happened is that online advertising captured the attention of Silicon Valley… complete with a massive influx of VCs, money, TechCrunch posts and of course… HYPE.

You see, venture capitalists make money off of home runs. The top companies in a category get great exits, and after that valuations drop off very quickly. To actually be able to justify an investment, a VC has to be convinced that the company has a chance at being top in it’s category. Well, this is quite hard to do if the world were simply advertisers, publishers and ad exchanges.

So what do you do? Well… you create a new category, pump millions of dollars in a company marketed as such category, and then hype up this category on TechCrunch as the next greatest thing and rejoice.

Of course, VCs have coffee with each other, hype up their investments to their VC friends (ever heard of an “echo chamber”?), and now they’re all clamoring to invest money in other companies who could vie to be a winner in the category and a new slew of companies get funded.

In 2006 it was impossible to differentiate yourself as an ad network… and thus every ad network rebranded as an exchange. In 2007/2008 nobody could raise money as an “ad exchange” that would compete head-to-head with Google and Yahoo. But “SSP” worked out quite well… even though it’s exactly the same business model (queue funding for Rubicon, Admeld and PubMatic, etc.).

In 2007/2008 you also couldn’t raise money as an ad-network, but there were plenty of companies interested in helping advertisers spend their money… enter the “DSP” category (queue funding for MediaMath, Turn, Invite Media, etc.). What’s funny is that TMP was doing the SSP business before anybody else and Ad.com has been offering “DSP services” since… well, forever!

VCs are also obsessed with investing in “Technology Companies” that build “Scalable Platforms.” You see, Technology is supposed to be sticky. Platforms have ecosystem effects and become $1 billion companies. To adapt, companies have quickly adjusted their positioning to better reflect attributes that will attract high valuations from said Venture Capitalists. Again, ad network isn’t sexy, but a technology — “Demand Side Platform” — is.

The funny thing is… it’s hype yet again. Most companies on the LUMAscape slide receive the majority (if not all) of their revenue from media services and not technology fees. Now this line is blurring (more on that later) but what companies are doing is saying they are “technology providers” while behind the scenes they operate exactly like a media company.

An “SSP” technology provider hands out tags to publishers and then pays them a check at the end of the month together with a nice Excel sheet. This is exactly the same business model of many an ad network.

Don’t get me wrong — I’m not saying that any of the aforementioned companies aren’t or can’t be great companies. Many of the companies I mention have built terrific technologies and great businesses, and some have followed that up with successful exists. But they did all capitalize on a great marketing opportunity — at the expense of some “old world” companies who were too slow to react.

And this is where VCs and bankers are actually hurting the industry rather than helping. They are reinforcing the importance of new categories that in themselves shouldn’t necessarily exist. Rather than focusing truly on what a company does they repeat and hence validate what companies say they do.

So What’s Next?

Well first, let’s stop the hype cycle and start celebrating real successful businesses for what they have accomplished. Give me more case studies of real results and less BS!

In the coming blog posts, I’m going to lay out the new RTB ecosystem and how all the different parties are interacting. Your feedback is as always invaluable so please leave comments with specific topics you’d love covered.

Cross-published at mikeonads.com. The views expressed in this column are those of Mike Nolet and do not represent the official views of AppNexus.

Specific may have bought a real jalopy, but depending on how well the social network is fixed up, it could be a boon for the ad network.

It’s fitting that the acquisition news is all over the web on Social Media Day, but Thursday, June 30 also marks the end of News Corp.’s fiscal year — it’s understandable that Rupert Murdoch didn’t want that revenue black hole on his balance sheet anymore.

Originally acquired for $580 million, MySpace was pretty much given away for $35 million – when it first appeared on the auction block, News Corp. was seeking a laughable $100 million. Actually I’m a little surprised News Corp. didn’t pay Specific Media to get rid of it, though News Corp. is taking a minority equity stake in Specific.

The layoffs came quickly (I can’t believe people would be working for MySpace without an updated resume), with about half of the 400-500 employees getting the ax. How many rounds of layoffs (and CEO-oustings) have we seen during the long, slow, depressing decline of MySpace? I remember being surprised in the last two years any time I received a hiring announcement from MySpace.

The decline really stemmed from News Corp.’s takeover in 2005 and at its heart were display ads. The parent company was making hand over fist in revenue from chintzy display ads and a deal with Google to power search and contextual ads, but at the price of annoying users with poor site functionality (how many pages did you have to sift through to make a comment?). Believe it or not, Facebook has always held user experience above revenue (especially now after tripping over its privacy policy so many times) and that was why it stole MySpace’s users.

But now the oft-redesigned social network is Specific’s problem, and it’s blowing some commentators minds that an ad network owns a social network. Specific wasn’t high on the tech media’s radar; indeed, the biggest splash Specific has made outside of the ad tech world was a lawsuit that claimed Specific used (previously) hard-to-delete Flash cookies for targeting purposes — which was kicked out of federal court a few months ago with little fanfare coverage.

But Specific is a big-ass display ad network — a reach of 170.9 million U.S. uniques and 79% of the U.S. Internet population — known for its targeting and dating mining technology.

“Our Data Universe enables us to gather insights from more than 2.6 million sites worldwide, giving us visibility into the digital consumption of 550 million global users each month.” Specific’s website reads. “Because our data is proprietary, it’s unique. Differentiated data means differentiated audiences.”

I didn’t get an answer when I asked if Specific Media was planning to incorporate MySpace user data into its display and video targeting services — there may not be one at this point. In theory, Specific will be able to do what Facebook won’t – anonymize profile data to add to audience segments for targeted display campaigns, and enable advertisers to reach potential targets on MySpace.

We keep wondering why Facebook swears it’s not building an ad network even though it has such large tracts of data that would be a boon to targeted display campaigns — Specific won’t get the same kind of reach (the company claims it will reach 70 million users but 50 million is the media-sanctioned number), but it’s pretty sweet to have so many uniques traversing an owned property.

I’ve read more than a few articles suggesting you delete your MySpace profile now, and a few that say it won’t matter as MySpace has backed up of all that data (oh no, they have pictures of my emo period!). But can you imagine the vast loads of outdated, crap data sitting in MySpace’s back pocket? Most of it must be absolutely useless for mining or targeting.“Hey Jenny, we see you liked Fallout Boy five years ago — check out this new line of studded belts!

Honestly, I don’t think being MySpace being owned by an ad network is going to ward anyone off other than the most privacy sensitive.

MySpace offers a new outlet for these branded videos as well as the opportunity to monetize 67 million video streams monthly.

Finally, Specific has suggested it will offer advertisers “socially-activated advertising campaigns, enabling brands to turn their campaigns viral by allowing users to share their favorite ads with friends.” It could easily set up new ad products similar to Facebook that offer advertisers the ability to anonymously target based on demographics and related user-generated content.

“With [Specific's] emphasis on video and data, this is about access,” commented interclick CEO Michael Katz. ”They gain access to a lot of inventory for their video offering. They also gain access to some quality data including the search data and registration data.”

One sign this may be the case is social browser RockMelt, my surfing tool of choice. Introduced last November, the browser is built on top of Google Chromium and features hookups directly into Facebook and Twitter. Currently RockMelt allows users to see notifications, chat with friends, post to walls and update user status on Facebook from the browser.

For its latest round of updates, however, RockMelt has actually partnered with Facebook, allowing for a tighter integration of the social network’s features. When a RockMelt user visits Facebook, boxes for friend requests, messages and notifications will disappear because these functions are built into the browser. RockMelt users will able to answer messages within the browser, and chatting while on Facebook will be instantly transfered to a RockMelt window.

Co-founders Eric Vishria and Tim Howes told VentureBeat’s Anthony Ha said that Facebook’s cooperation was essential for these new features. If the whole web is going to be social, hooking up the browsers seems like the logical next step.

But as RockMelt’s add-ons make heading to Facebook less necessary and could theoretically cut down on ad impressions, I’m once again doubtful about the validity of Facebook’s claim that “No display ad network is being built!” If it’s true that an ad network isn’t in development, Zuck and crew might want to get on that….

“I don’t believe you,” Federated founder, chairman and event MC John Battelle snapped back with a smile. And he was speaking for the majority of the audience at Federated’s most-attended conference.

With nearly 700 million users on its social network and the Facebook Like button weaved into every crevice of the web and garnering 50 million likes a day, Facebook is sitting on the motherlode of behavioral targeting data. Entering the display field, Facebook would make all the competition pale. So most of us playing in the space are just waiting for the arrival of “FaceWords.”

But Everson insisted that the idea of a display ad network had never been discussed during her time at Facebook — “There’s too much on our plates right now.”

However, another attendee nudged me and said, “Well, they may have talked about it before she arrived 11 weeks ago….”

At the moment, Facebook is more concerned with improving and innovating its display products, such as Sponsored Stories, which curiously she commented was not a long-planned ad unit. It seems the Facebook team realized they had the power to link brands and user endorsement in a display ad.

Though she wouldn’t hint at future ad units (“Sponsored Stories was just introduced!” she cried — yeah, back in January. I’ve created, like, 50 new ad units since then.), she did give some updated stats on Sponsored Stories — the brand recall rate was 68% when a friend endorsed a company through the ad unit. Everson also commented that friends were four times as likely to buy a product if they saw an endorsement.

Still, don’t expect homepage takeovers — “I don’t think users want that” — or interstitials anytime soon on the network, which could make advertisers and secondary market investors grimace. No, Everson gave the line that Facebook “wants to be a business partner” for brands’ marketing efforts.

One could argue that integrating Facebook into a campaign already is essential, but just like Facebook eventually aims for its social technology to be a core component of the Internet, it also wants that technology to be a core part of online marketing.

As Everson explained, Facebook is interested in working with companies to develop campaigns that are “social by design,” or “baking social into the experience.” Brands need to decide if people are at the core of the social marketing experience, or is the social element just “salt on french fries.” She suggested the former would witness more success.

Another conference attendee mentioned to me that Everson’s time on stage was a lot different from the former VP of Global Sales Mike Murphy, who talked at Federated’s conference the year before. While Murphy had a “canned spiel,” Everson’s outreach to the demand side seemed far more aggressive.

COO Sheryl recruited away from the top sales exec position at Microsoft after a nine-month stint. She said that her and Facebook’s relationship with Microsoft is still fine — it’s not like Microsoft can complain as Facebook is the potential savior of its revenue black hole, also known as the Internet services unit.

As with every Facebook presentation I catch, there was a lot of “RA RA RA FACEBOOK!” talk (Did you know Facebook is in the organ donation business? I was thinking about seeking out a new liver because this one is shot.) Somewhat ironically, right after toasting the social network’s numerous accomplishments, Everson commented that she was impressed with the humility at Facebook.

“At Facebook, we’re really humble about what we’re doing,” she said.

O RLY? Then again, I guess Zuck and crew could be rubbing their massive success in our faces more; it’s a fine line between being proud of your accomplishments and gluttonous gloating.

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