Facebook’s New Ad Platform; More Integration Required

Further Integration Necessary to Attract More Advertisers

The best advertising does not look like advertising. This statement has been made and proven to be true time and time again. With their announcement of a new advertising platform in the Wall Street Journal, Facebook has their eyes set on growing their revenues through targeted advertising. The easiest thing for Facebook to do with this new ad system is to offer up tons of user data that will allow advertisers to display highly targeted ads. The difficult thing is to offer advertising options that will offer strong returns.

The Problem With Display Ads

Display based advertising is a relic from the days of print advertising. Sure, lots of companies waste spend money on branding themselves through display ads. They want eyeballs. But for most companies, especially those on tight budgets, display advertising delivers poor results. People rarely click on display ads; the average click through rate of an online banner is less than 2%. Banner blindness is real.

You can offer the most targeted ad in the world, but if most people ignore it and almost no one clicks on it, does this targeting matter?

Highly Effective Ads Will Keep Advertisers Spending

Google Adwords works because the ads are not just highly relevant, but they are highly effective. Advertisers spend because they work. In order for Facebook to be successful or even compete with Google, their ads will need to be highly effective. In order to do this, they are going to have to create new advertising options. They are going to have to compromise the user experience to some extent in order to closely integrate their ads with content, applications, groups, and the news feeds.

Facebook is going to have to offer highly targeted interactive ads, such as video, or even entire applications that are ads in order to keep advertisers spending. If Facebook is not careful and does not execute on this new ad system, they could very well lose advertisers and users.

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