Facebook Crowdsources Ad Placements

The Facebook ad placement changes in February have been well documented by GigaOm and others indicating a number of important shifts in this critical space. Instead of relying on advertisers to bid their way to the best ad spots, Facebook is smartly using feed behavior to dictate what shows up.

Current Facebook Ads Ineffective in Driving E-Commerce

Current FB ads have demonstrated very low click through rates and consequently relatively poor monetization outside the gaming world. The math is pretty straightforward — an average click through rate on Facebook is .04% compared to a Google search CTR of 1%. Advertisers have been using the Ads to buy likes and stimulate activity inside FB, but everyone who has used the platform agrees that it has done very poorly in e-commerce equivalents.

The Crowd is a Voting Mechanism for Facebook Ad Placements

Rather than try to force users to look at the ads more to gain higher click rates through traditional ad system approaches (placement, size, action, etc.), Facebook wants to promote advertiser and ads where there is a large following of users. In essence, FB is incentivizing advertisers to integrate their fan post content to their ads to stimulate the kind of like activity that Facebook can measure and thereby juice up the ad.

Its sounds weird, but rather than rely on price as the sole determinant of position, Facebook is leveraging the fan support for the brand to make the ads more appealing. So, if I want to advertise the new Camaro, it makes sense that FB users will consider the ad more seriously and perhaps act on a CTA if the ad includes a listing of my friends like Camaros or have commented on the brand on the Camaro fan page. Context is the crowd.

Money does Not Buy Love – Implications for Advertisers

Fan posts and fan pages become far more important as a driver for ad quality and placement. Integrating the fan experience more deeply into the brand and getting fans to engage as opposed to simply hitting a like button now has real payoff to the brand — more effective and noteworthy ads.