Social ads have social consequences. Josh Kopelman, Managing Director of VC firm First Round Capital, recently found that out. Kopelman, a very savvy web 2.0 investor who got in early with StumbleUpon, Odeo, LinkedIn, and others, tried an experiment with Facebook's controversial SocialAds advertising system. He spent $50 to test the platform, with an advertisement for his VC fund. Specifically he ran an advert targeting Yahoo and Microsoft employees who may be thinking of leaving their jobs to do a startup (see top left image).Initially the experiment seemed to be working, with reports of Yahoo employees clicking the ads. But in a follow-up post, Kopelman discovered the ads had unintended consequences.
It turned out that the advert was being displayed alongside photos of current Yahoo employees - people who had previously joined the First Round Capital Facebook group. In other words, they were connected in Facebook's system by being associated with both Yahoo and First Round Capital via its Groups feature. But the way the advert was displayed made it seem like those people were leaving Yahoo, something which Josh Kopelman had no intention of implying. One of the Yahoo people affected wrote to Josh: