In its mission to make the world more connected, Facebook is helping its users connect more with its advertisers. The social networking site has begun testing a handful of new ad formats allowing users to interact with their Facebook friends within the ads themselves. The offerings are indicative of the ongoing challenge social sites are facing when it comes to monetizing the hordes of users and pages they generate. The firm is also unveiling new types of reporting to help advertisers recognize the value of being in front of its audience, beyond simple impressions and clicks.
Adidas, General Mills-owned Betty Crocker, and the new DreamWorks Pictures comedy, “Tropic Thunder” are among the first advertisers to try Facebook’s new “engagement” ads. Users who saw ads for the goofball war flick, for instance, were able to view the trailer and post comments without leaving the page they were on.
Ad trials for Betty Crocker and Adidas have yet to launch. Future ad tests might allow users to “fan” one of the advertisers, in effect endorsing them. Or, they might be able to “gift” a friend with a virtual present sponsored by the advertiser.
The value of the Facebook ads lies in their viral quality. The site alerts friends in a network to the actions of their fellow network members, and the ads work in a similar fashion. A small number of friends in someone’s network may be notified when he has interacted with an engagement ad. That distribution can be extended by advertisers willing to pay to notify all friends of those who have interacted with an ad. The company refers to that option as “social” ads.
The ad offerings mirror some of the broader changes occurring on the site through a redesign that makes recent activities of users more prominent to their friends, said Tim Kendall, Facebook’s director advertising products. Some new ad products, such as a permanent above-the-fold homepage placement sold exclusively through Facebook’s sales team, are clearly advertiser-driven. Facebook also enables self-serve ad buys.
Social sites like Facebook and Fox Interactive Media’s MySpace have each reached out to advertisers with new ad offerings in the hopes of driving higher ad prices. While Facebook is taking the more social route, FIM and MySpace are pushing its huge warehouse of user registration and interaction data. The NewsCorp-owned publisher has a system that targets to niche user groups, such as baseball fans or hip hop enthusiasts based on information they have listed in their profiles.
Though not specifically referring to FIM’s system, Facebook VP Media Sales Mike Murphy differentiated Facebook’s ad targeting from others, suggesting keywords in a user profile can’t automatically determine a user is prone to certain behavior or interested in certain topics. “You can’t turn words into behavior,” he said. Facebook allows for contextual and geographic targeting as well as targeting based on user interactions.
No matter the approach, both companies, as well as other social media publishers, struggle to prove value to advertisers. Facebook aims to change that by offering more reporting to demonstrate things such as the viral effect of ads. “It’s all those things that aren’t impressions and clicks,” said Murphy.
Others firms have offered or planned ad formats with social elements. PR outfit Edelman linked with RSS feed platform provider Newsgator to offer a discussion-based ad format displaying blogger comments, and blog search engine and ad service Technorati has something similar in the works. Avenue A | Razorfish, in conjunction with Pluck, are the most recent to announce plans to build a social ad unit.
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