“In-stream” advertising startup, Ad.ly, as viewed by AdBlock Plus.

How do you know if you have found a market with unhappy customers ready for disruption?

Start your mining with a nifty tip via Eric Ries.

Take out an Ad on Facebook/Adwords using the name of the market leader “This Company” and measure the clickthrough rate on the ad.

Ad Copy: “This Company” Sucks

In my previous post on testing market demand with facebook ads, I extolled the virtues of the Facebook self-serve ad platform for testing feature/product concepts with live ammunition.

After further experimentation with the platform, I can state confidently that while there are some interesting opportunities for locally oriented products and service owner’s to take advantage of the city-level targeting, there are some fundamental flaws with the way that the Facebook ad auction functions.

The problem lies in the way that the auction for ad impressions/clicks functions. While Advertiser’s bid on a particular keyword in search advertising platforms such as Google’s Adsense, on Facebook, Advertisers bid on a certain demographic segment.
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