Facebook is clearly focused on revenue ahead of its IPO. The massive social network has been hard at work innovating on it’s platform – it’s ad platform. Over the last few weeks there have been a slew of changes rolled out to advertisers with announcements of more right around the horizon. Is this a coincidence? No way. Facebook needs to ramp up its revenue capability as it enters the public market. Investors will demand fast growth for the multiple they’re going to pay, and Facebook is laying the foundation to grab as many ad dollars as possible with these new changes.
New Ad Units
Leaked Facebook documents show new Facebook ad units coming and old units sunsetting as Facebook attempts to find the ad units that drive more engagement (clicks) to pay off better for advertisers who are looking for measurable results. The new social units are actually already live on the site if you’re in the developer preview. I’ve grabbed one from my Facebook feed below.
These new ads, say Facebook, are poised to drive more clicks and actually work better than standard ads. I’m inclined to believe them. I’ve run a ton of Facebook ad experiments and I can tell you, in no uncertain terms, that the social ads work better. But that’s another post.
More Ads, More Places
Facebook has been thinking more about how it can leverage the most popular parts of its platform to drive more impressions for it’s ads. When it launched the new version of the photo viewer, it reworked the layout and bumped up the visibility of the ad units. You can see between the previous version and the new one how much visual priority has been given to the ads now, and yes, there’s even an extra ad unit in there for good measure.
That extra ad unit may not seem like a big deal, but when you take into account that 200 million photos are added to Facebook every day (6B/month) and that those photos are viewed on an average of some multiple of that, you’ve just added a ton of new inventory (and CPMs) from your platform to sell and monetize. It’s a big change.
Old Photo Viewer
New Photo Viewer with Two Ad Spots
We should not be surprised to see this ad creep continue to show up all across the platform.
Facebook Mobile Ads
With more than 400 million of it’s ~850 million users accessing Facebook via mobile, and with no current monetization opportunities to capture that audience, it’s a no-brainer that Facebook will unveil mobile ads at some point soon. You just can’t have that type of traffic to a site that you can’t monetize. I’m sure that’s the busiest team in the entire company.
Facebook also acquired a mobile payments company recently. And if they can strike a payments deal where they take a cut, it could be lucrative for them, and a model they’re very familiar with already (see Facebook credits.)
More Tools for Advertisers
In addition to the extra ads and new ad units, Facebook will continue to innovate to make the ad professional’s life easier and their campaigns more successful. Facebook’s treasure trove of data on users is becoming easier to tap and target with recent changes to the ad editor which has become much better at making suggestions for interests as you type. Users of the Facebook Power Editor can now mix and match broad based categories and precise interests, which let you target say small business owners who like search marketing (like the AimClear guys did.)
When Will the Ads Be Too Much?
The big question of course is when is enough, enough? An ad that shows you a funeral parlor when Facebook knows you’ve just lost a relative is going to be far too creepy and turn off a bunch of users. I’m sure there’s some healthy debate going on between ad sales and the product teams about where, when and how to best leverage the platform and drive revenue. Those debates have likely picked up since the S-1 filing.
One thing is for sure, unlike Twitter, Facebook has fully embraced it’s destiny as an ad serving platform. We won’t be paying a subscription any time soon, but we will be seeing more and more ads. The big question is when will it be too much? Will it be the ads that chase the users away? Or will we be perfectly content being served ads for merchandise of our favorite teams and tools that are built for professionals like us?
- Are You Ready for Mobile Facebook Ads? Here They Come! (marketingpilgrim.com)
- Facebook launching mobile ads next week (rumor) – ZDNet (blog) (zdnet.com)