It was delivered at a grand event that ended with cocktails
under the life-size replica of a blue whale in the Museum of
Natural History and a performance by Alicia Keys. There, Facebook
suggested that marketers reorganize themselves around social. It
produced a handy playbook with a proposed organizational chart for
marketers that advises creating a position to "oversee social
across the organization" (and report directly to the chief
marketing officer) as well as a "pages team" dedicated to Facebook.
It also suggested a terminology in which Facebook ads will no
longer be "ads" but "stories."
Audacious, yes, but Facebook, now on its way to a public
offering, has built incredible scale as well as engagement. In the
U.S., it ranks No. 1 in time spent and ad impressions and No. 2, to
Google sites, in total internet visits. No doubt some marketers
will restructure to take advantage of it, just as they retooled to
take advantage of search.
"We're going to see the emergence of quite different
organizational designs over the next few years," said Nigel Morris,
CEO of Aegis Media
Americas, which is a member of Facebook's client council of top
brand and agency partners.
The big question remaining is whether they'll spend more on ads.
That's an issue for Facebook, which is under pressure to prove
before the IPO that it can scale its revenue in proportion to its
To encourage that , Facebook unveiled a tool, Reach Generator,
that will let marketers buy all the reach they want. Priced
according to the size of a brand's fan base, the tool is designed
to take a piece of content and amplify its reach by resurfacing it
as an ad.
The pitch is that just 16% of fans currently see organic content
posted by brands: Most of it is weeded out by Facebook's EdgeRank
algorithm, designed to enhance users' experience by putting only
the most relevant content in their news feeds. Using the paid ad
tool could increase a brand's exposure percentage to as high as
Facebook appears to be moving beyond the first phase of its
business model, where it encouraged marketers to pay to accrue
fans, said Rob Norman, CEO of Group M North America. Now that some
major marketers have grown fan bases 20 million users strong, the
logical next step is to get them to pay to activate those fans
beyond the 16%.
"Getting people to pay for the other 84% is good business," Mr.
Brands that have spent millions accruing fans were surprised to
find that such a low percentage of them were receiving their
"Many [clients] have spent significant sums to generate these
fan bases, and many of them thought of those people as though
they're an owned asset, almost like an email list ... but now it
looks like rented media," said Craig Atkinson, chief digital
officer at PHD USA. "I think
there's a moment of pause while they're digesting what's a pretty
material change in the orientation of it."
Last week wasn't the first grand proclamation Facebook has made
about advertising. In 2007, it summoned the ad community to an
event where CEO Mark Zuckerberg, then 24, announced: "The next
hundred years will be different for advertising, and it starts
But in the nearly five years since, a persistent undercurrent
has been that Facebook's attitude toward advertising verges on
intolerance, as the company has mostly relegated ads to the right
rail and kept them small, innocuous and, as some researchers
assert, ineffective—largely because the reach is limited to
fans and their friends.
That appears to be changing with last week's news of premium
ads, long-awaited mobile ads and ads on the log-off page.
(Advertising on Facebook's massively trafficked log-on page remain
off-limits to marketers, however.)
"These new ads are the first indication that being publicly
traded will reset the balance between users and marketers in a
marketer's favor," said Chris Wexler, director-strategy at Campbell Mithun.
"Don't expect MySpace 2.0 anytime soon. But you will see marketing
messages continue to invade what has been a largely ad-free