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Facebook is Trying a New Way to Serve Ads

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Facebook is going to be rolling out what they are calling “engagement ads” to users.  These ads are going to be grouped into 3 categories: (source Jeremiah Owyang)

1) Comment Style Ad: Members can now leave comments on these advertisements, much like wall posts. Brands that are focused on entertainment, new product rollouts, autos and apparel are well suited. The ad can show up to 4 comments per object, and the activity spreads to the users newsfeed.

2) Virtual Gifts Style Ad: Brands can now create virtual items that users can share, spread to each other. This wildly popular behavior within applications and Facebook is suitable for consumer products, entertainment, and some media.

3) Fan Style Ad: A play off the Facebook pages, users with a persona affinity for a product (like Apple) can become a fan, triggering a notification to their network, and could then tie on social ads. Will work great for established brands, like guitar hero, passion products, luxury products, or any brand with a rabid customer base.

I think Faceook has an interesting approach towards ads.  The success of the advertising industry should not be measured by how much cash is pumped into the industry as a whole but in how the click through rates are increasing (or decreasing).  Currently Facebook ad campaigs have a click through rate of approximately 0.04% which is really quite low.  I’m sure that by making ads more engaing, Facebook is hoping to increase their click through rates while being able to serve a much more targeted selection of advetisements towards it’s users.

According to Tim Kendall, the director of monetization, the goal of these “engagement ads” is to build “ad products that users can interact with in the same way they do with other things on our site.”  Currently only a few select brands have access to this new ad platform but Facebook should be rolling it out on a massive scale sometime toward the end of this year.

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