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Substantial growth in ads is on the way to Facebook

Tanzina Vega 

Facebook’s hundreds of millions of users could soon be faced with a lot more advertising — in their newsfeed, on their mobile devices and even when they log off.

On Wednesday, the company announced a new suite of advertising products intended to insert more ads into Facebook’s traditionally clean interface and to take more advantage of mobile ads, where the company has struggled. The announcement was made at its first conference, held at the American Museum of Natural History in Manhattan.

For users, the announcement could mean many more ads on Facebook. For advertisers, the effort offers a chance to reach more users in more places.

Despite aggressively courting Madison Avenue for the last few years, Facebook has been an anomaly in the world of digital advertising. The ad units offered less creative options for advertisers who want to, say, take over the site’s home page or add moving text to an ad. Rather, the value in Facebook’s ads was in their data and personalization.

The potential for more ad dollars was reflected in the company’s first filing for a public offering in February. At the time, analysts said the company was expected to be valued at $75 billion to $100 billion. But according to the filing, Facebook made only $3.7 billion in revenue last year, the bulk of that from advertising.

Until now, advertisers were largely limited to a variety of ad spaces that were positioned on the right side of the Facebook home page, in addition to creating their own Facebook pages. The announcement on Wednesday focused on a new set of “premium ads” that will run at different points in the site, with a special emphasis on ads running throughout a user’s mobile feed.

Mark Renshaw, the chief innovation officer for Leo Burnett Chicago, part of the Publicis Groupe, said that the announcement made Facebook, “the biggest mobile platform.” The announcement comes on the heels of a similar announcement by Twitter that it would begin a mobile ad program.

At the conference, the company promoted other new features for advertisers. For example, by April, Facebook is moving all marketers’ pages to its new Timeline format that allows advertisers to have more dynamic pages for their own brands. In addition, anything posted on an advertiser’s own page—status updates, photos and videos—can be made into an ad that can be pushed out to users’ newsfeeds and mobile feeds.

“If we want to take everything and make it social, we can’t do it alone,” said Sheryl Sandberg, the chief operating officer for Facebook, in her opening remarks to the marketers in the room. Chris Cox, the vice president for product at Facebook, said the new options offered advertisers “a big, fat story-telling canvas.”

Another new tool for advertisers, called Reach Generator, allows brands to focus on users more aggressively. If a brand meets the Facebook criteria of having a minimum number of fans (the company didn’t reveal the number) and posts more than a few times a week, the company will guarantee they reach 75 percent of their fans with ads each month — a privilege they will have to pay for. Previously, a Facebook algorithm would only allow 16 percent of brand posts to be shown in the news feeds of that brand’s fans. Now advertisers will have to pay more to reach more fans, effectively shifting the balance from what is known as “earned” media to “paid” media.


©The New York Times News Service

First Published: Fri, March 02 2012. 00:51 IST
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