Facebook Expands Ad Services with New Ad Unit, Marketing Tools

By Erin Harrison October 03, 2011

You may be among the ranks of those complaining that Facebook has become too complicated. But whether you “like” it or not, the social media giant is expanding its advertising services with a new type of ad that will “expand” if a friend “likes” it in an effort to win over more advertisers.

The ad unit is anticipated to be announced this week at Advertising Week in New York, according to Mashable, calling the ads “subtly different” from Sponsored Stories.

The ads apparently won’t appear in the News Feed, Mashable said, and – “unlike Sponsored Stories, which merely show an interaction with a brand – it also contains an advertiser message. It’s also different from Social Ads, which tell you if a friend took an action related to the brand.”

The new ad unit is aimed to “magnify” a brand’s reach, considering that word of mouth and recommendations from friends are more effective than your typical display ad.

“For instance, research Facebook undertook in May with comScore found that Starbucks fans and friends of fans spent 8 percent more at the coffee chain than other Internet users,” according to Mashable.

Facebook executives said this kind of “social context” results in a 68 percent increase in people recalling the ad, and “people who view these kinds of ads are four times more likely to make a purchase than people who see generic ads,” Fast Company reported.

This week, Facebook is also releasing a new set of tools intended to give marketers better insight into how well their Pages are reaching users – “and ultimately make those Pages more useful to brands,” according to the FC report.

Among the new tools are a dashboard, called “Insights,” to measure the reach of individual Page posts, an API to allow third-party agencies build their own tools on top of this new Facebook data, and a new ad unit that allows companies to create ads out of their Page posts, according to the report.

Facebook’s plan to broaden its advertising services is clearly resonating with companies. Earlier this month, TechZone360 reported that the social media behemoth doubled its revenue to $1.6 billion during the first six months in 2011. Facebook also earned net income of $500 million, Reuters said.

By comparison, Facebook earned $355 million in net income during the first nine months of 2010 on revenue of $1.2 billion, according to Goldman Sachs documents cited by Reuters.

“Facebook’s stronger results come as investors have pushed its valuation to roughly $80 billion in private markets, with many industry observers expecting the world’s No. 1 Internet social network to go public in 2012,” according to a report from The Atlantic Wire.

Facebook may go public by the first quarter of 2012, when the company could be valued at more than $100 billion, TechZone360 reported earlier this year.

Erin Harrison is Executive Editor, Strategic Initiatives, for TMC, where she oversees the company's strategic editorial initiatives, including the launch of several new print and online initiatives. She plays an active role in the print publications and TechZone360, covering IP communications, information technology and other related topics. To read more of Erin's articles, please visit her columnist page.

Edited by Rich Steeves

Executive Editor, Strategic Initiatives

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