Facebook is giving advertisers a new tool to better compete for the social network's expensive and scarce ad slots.
Starting this week, Facebook will tell advertisers how relevant the social network has judged their ads to be. Advertisers will be able to monitor their scores and tweak less relevant ads to become more relevant, potentially boosting the ad's performance and lowering its price.
Facebook will score an ad's relevance on a scale from 1 to 10, with 10 meaning the ad is highly relevant to its target audience.
Facebook determines an ad's relevance by measuring how positively or negatively its target audience may respond to it. Positive measurements include video views, shares and clicks, and negative measurements include the number of times people click to hide an ad or report it as spam. Facebook will start scoring an ad's relevance after it has been served 500 times and will update the relevance score as more people come across it.
This move appears to be the latest way Facebook is trying to get a grip on the firehose of content flooding people's news feeds. Last year the company moved closer to a pay-to-play model for brands to communicate with people on Facebook, which made room in people's feeds for posts from friends and family. But heated as the competition may be to freely take up space in people's feeds, things are also heating up on the paid side.
For the past two years, the average price for a Facebook ad has been on a steep incline, while the number of ads the company serves has dropped. In the fourth quarter of 2014, Facebook's average price-per-ad rose by 335%, and the number of ads it served fell by 65%.
Facebook doesn't want its ad business to become solely a race to the biggest buck. Expensive ads can be awful too. And if Facebook shows people too many awful ads, it risks alienating its audience. People will ignore the ads, complain or -- as happened with MySpace -- leave for somewhere with better or no ads. So Facebook is getting more transparent with advertisers about its relevance score and why it matters.
Among other reasons, an ad's relevance score matters because it can affect an ad's price. When determining which ads to show people, Facebook's ad-delivery system weighs factors like how much money the advertiser is willing to pay to show its ad to those people -- called a "bid" -- and that ad's relevance score. A high relevance score could compensate for a low bid, and it could be the difference-maker between two advertisers looking to pay comparable prices to reach the same audience.
How Facebook scores an ad's relevance can vary, depending on the objective set by the advertiser when placing the ad buy with Facebook. For example, an ad created to push app downloads will prioritize measurements like click-to-install rates when judging its relevance.
The relevance score will have the biggest impact on advertisers looking to get people to do something, like click on the ad to navigate to a brand's site or to install a brand's app. Brand advertisers aiming for attention, not interaction, will see "a smaller impact on cost and delivery," according to a Facebook blog post announcing the relevance score. Ads bought on a guaranteed basis -- with Facebook pledging to deliver an agreed-upon number of impressions -- won't be impacted.