Thursday, 16 August 2012

Facebook's risky plan for success

Facebook are testing a new ad initiative which will see advertisements appearing in users news feeds. After the social media sites stock price took a dive falling from $26.85 to $21.09 in the space of a week, Facebook are looking to boost their every increasing ad revenue with this new stream.

However, while this will increase Facebook's ad revenue, it will seemingly come at a cost. After the timeline feature was forced on many Facebook users who didn't want it earlier this week, the addition of extra adverts appearing in their newsfeed will most likely test their patience further.

While this initiative is very much only in the testing phase, if this is implemented across all Facebook accounts, it could result in many users giving up with Facebook altogether, as they believe the social media site has become too much of a "sell out."

Unlike Facebook's current advertising platforms, the adverts appearing in users newsfeeds will not be based upon social context. Rather, where the adverts appear will be based on factors such as age, gender, likes and interests, as stated in a user's profile attributes. 

Looking at the positives of this endeavour from the perspective of businesses using this platform to advertisement their brand, the reach which your brand could achieve through your ads appearing within users newsfeeds is huge. Although this form of advertising would cost a substantial amount for a business to use, the amount of traffic it could bring to your online store could make it a very profitable, as these added features would allow you to tailor your advert to reach a large demographic.

Initial feedback from the tests have determined that these newsfeed ads had a higher click through rate when appearing on mobile devices, opposed to their desktop counterparts.

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