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Facebook's new ad units offer scale, social impact

"REACH GENERATOR' ADDS POSTINGS

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To increase the circulation of ads, Premium on Facebook uses what the company calls “Reach Generator” to take a single ad and post it in several places on fans' Facebook sites, including in their news feeds, the right-hand columns of their sites, on mobile devices and even on fans' log-out pages. Facebook will charge advertisers for the service based on their number of fans and won't charge for each iteration of an ad. Previously, Facebook ads had been relegated to the righthand of users' pages and were fairly small. Also, brand messages or “like” notices might have appeared in fans' news feeds but in a fairly modest way that could be easily overlooked. The new approach, according to Mike Hoefflinger, Facebook director-global business marketing, is intended to gain scale and boost impressions. “Today, only 16% of a company's fans on average see these ads,” Hoefflinger said. “But Reach Generator will enable a company to reach 75% of its fans.” Ads appearing on log-out pages, to begin in April, will further extend the reach of Facebook ads, Hoefflinger said. “Thirty-seven million people log out of Facebook every day,” he said. “If you're running large-reach campaigns, it's important to communicate throughout the Facebook experience.” Facebook's new approach to ads is grounded on commercial messages that mimic social interchanges. It now calls ads on its sites “stories” and is prompting advertisers to embed videos, photos, event announcements and other nontraditional ad messages in them. However, Facebook may confront a problem if users—even those who are fans of a company—rebel at seeing multiple versions of the same ad and decide to unfriend the brand. Brian Boland, Facebook director-product management, said this is unlikely, however. “Over time, people have built a significant number of connections with different brands with all sorts of page content,” he said. “And when people "like' a brand, they know it's something they'll hear from. Content is something they expect to get organically as a page post. Now, they'll get more in this new sponsored format. The chance of someone liking a brand or not will depend on the quality of the content.” Taking full advantage of Facebook's new approach to ads will be a challenge for marketers, said Michael Scissons, CEO of social media marketing company Syncapse Corp. In particular, a conflict could arise between companies' earned- and paid-media strategies, which typically have been divided between separate agencies or business units, he said. “I think the new approach is good and powerful, amplifying messages around stories,” Scissons said. “But brands will have a hurdle here. Traditionally, Facebook is run by social managers who have built a content calendar and gotten it approved. Now, with media buying playing a role, it's more challenging. And it has to be conversational, which sounds easy but [isn't].” Scissons said Facebook should have a good handle on the Reach Generator option. “One thing Facebook is good at is managing the throttle of messages,” he said. “It may bombard users to some extent, but Facebook has good control over their news feed, and this will be optimized over time.” Extending the reach of brand ads to mobile devices is a first for Facebook, which has 425 million mobile users but previously had no means of gaining ad revenue from that traffic, or offering this potent new market to advertisers. “In the post-PC era, Facebook users are accessing the site from their mobile phones more than ever,” said Beth McCabe, VP and director-social marketing and technology at ad agency Digitas Inc. “Mobile ad products could not come at a better time. Facebook is still not being specific, but in theory mobile could become an option for ad targeting, as could much finer geotargeting than currently exists.” Announced along with Premium on Facebook was Facebook Offers, a social media version of daily deal emails. Businesses can post an offer to their fans and are not charged for the privilege, according to Facebook. Facebook's revamped advertising approach sets the stage for its initial public offering this spring. The company aims to raise $5 billion through the IPO.

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