Fab Drops Load of Cash on Facebook Log-Out Ad

A High-Profile Placement for a Startup in a Competitive Category

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What do you do after you raise a mountain of cash? If you're Fab, you spend some of it. The social shopping site raised $105 million earlier this year. Tonight, it's putting some of that to use by buying Facebook's log-out page.

Facebook's log-out page is the closest thing the social network has to the kind of big home-page takeovers that used to drive online advertising and are still monopolized by the likes of Yahoo, AOL, MSN and YouTube. While a relative few of Facebook's 955 million users log out much, enough -- such as those using public computers in libraries or schools -- do to make it a big, expensive display buy.

Because a large cross-section of Facebook users see the same ad at once, it's one way to reach a very large audience on the web in a short amount of time.

Logging out? This is what you might see.
Logging out? This is what you might see.

Fab's campaign will reach users in the U.S. and Canada. CMO Scott Ballantyne said the only targeting applied was to restrict the ads to Facebook users over 21. "What the Facebook [log-out] ad does is allow social sharing for the masses," he said. (Users will be able to comment on the ad, and click on it through to Fab's sales page.)

Half of Fab's users come through social sharing, which is part of the reason for the Facebook buy. Fab has used Facebook ads from the start 15 months ago to grow its membership and drive sales. It leaned heavily on Facebook for its prelaunch marketing, using "sponsored stories" to promote the site to friends of its Facebook fans and drive them to its sign-up page.

When Facebook introduced its log-out ads, the asking price was north of $700,000 per day, including a big commitment to advertising on Facebook. Mr. Ballantyne wouldn't comment on the price Fab paid, but said of the buy: "We believe it's cost-effective."

So far, the takers for Facebook's log-out page have been mostly very large advertisers, including Chrysler, Bing, Ford and Paramount for the theatrical re-release of "Titanic." Fab's campaign begins at midnight tonight.

Fab has 5.5 million users in the U.S. and 7 million worldwide. The company has said it is on track to earn $140 million in revenue this year. Today the company removed the sign-up requirement for shopping on the site. Fab is in a competitive category of social commerce and flash-sales sites including the likes of Gilt Groupe, Ideeli, Rue La La and Amazon's MyHabit.

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