Facebook Ads to be Tested in News Feeds

Posted on August 22, 2012

On August 14th, Facebook announced that the company will begin a small test of yet another new advertising format, this time placing ads directly into the News Feeds of users. Since this comes at a time when Facebook stock prices have set record lows (almost half the price since its IPO), the possible change is undoubtedly meant to boost company revenues from their pay per click clients.

The Possible Changes

Previously, all Facebook ads were relegated to the far right hand column and were only seen by those users viewing the site on their home computers, not on mobile devices. Additionally, ads were only displayed when the user or someone in their network made an interaction with that business, such as ‘liking’ their page.

Under the new system, ads would appear directly within the user’s New Feed, on all devices, and regardless of any user having ‘liked’ the page. While these proposed changes have basically opened the doors for any business to target any user, Facebook did announce an unspecified limit on the number of ads that will appear at any one time.

What it May Mean to Advertisers

Facebook’s pay per click system works differently from search engine based platforms like Google Adwords. Instead of targeting keywords, advertisers target specific demographics by qualifying users based on age, gender, marital status, and even interests. Local businesses can also narrow their audience to precise geographic regions. Since these users have not performed any search related to your business or industry, there may be no immediate interest in the ad at that time, resulting in many more impressions before a click is generated.

So, should these changes be made available to everyone, the prominent placement and removal of restrictions will allow advertisers to reach many new potential fans and clients. And, while there will inevitably be a backlash from users due to the intrusiveness of the ads, any increase in click through rates will improve the system and make a Facebook PPC campaign a more viable opportunity. And after all (since it is still pay per click) you won’t be charged until you generate user activity, so there’s little harm in allocating a small marketing budget to test the waters.

We will continue to provide any updates on the status of Facebook’s test, and whether or not it will be made available to all users.

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