Industry verdict: Facebook's new ad platform explained and reviewed

The platform is attempting to convince marketers of the value of its latest advertising tools, which offer brands greater creativity, but risk altering the consumer experience, writes Sarah Shearman.

Industry verdict: Facebook's new ad platform explained and reviewed

Click here to find out What's New on Facebook: Ad units, brand pages, Reach Generator and performance tools.

Facebook supercharged its efforts to charm key marketers last week, announcing a fresh armoury of tools to help brands connect with its 850 million users.

The company's top brass sought to woo an audience of more than 1,000 marketers at its inaugural fMC conference, choosing New York as the venue, instead of its usual Palo Alto stomping ground.

News of Facebook's relaunched ad platform, including mobile ads and revamped brand pages, has drawn a mixed response, however.

Industry view

Click a person to read their views

Paul Evans, XBox

Paul Evans, XBox

Ben Wood, IProspect

Ben Wood, IProspect

Tom Pointer, Iris

Tom Pointer, Iris

At the event, Facebook's first aimed specifically at marketers worldwide, Caroline Everson, vice-president of ad solutions, Tom Cox, vice-president of product, and Sheryl Sandberg, chief operating officer, took to the stage to outline their vision for the future of the social-media platform, and where brands will fit in.

"It's not us, it's we," said Sandberg. "If we're going to make marketing truly social, it won't be us, it's going to be you."

Marketers have been calling on Facebook to provide more creative and branded opportunities for some time. Pandering to the desires of brands, rather than consumers, is a significant shift for the company, however.

Correct formula

With 85% of Facebook's total revenues last year coming from advertising, it is crucial that it gets the formula correct. Factor in its looming IPO, and the precipice on which Facebook sits becomes apparent.

If recent research from digital marketing technology company Upstream is anything to go by, then it seems the circumstances are exacerbated by a fear that disgruntled users might leave the site.

The figures, based on a YouGov poll of 4,159 adults in the UK and the US, showed that 27% of British users would stop using Facebook if they were subjected to too much advertising.

Marco Veremis, president of Upstream, argues that "clearly, no users" will like the increased number of ads.

"There is a fine line between polluting the news feed and keeping it just right - we cannot prejudge this. We have to look at how we can self-regulate and moderate the amount of advertising going into the news feed."

Negative reaction

He points out that when Twitter launched a "Quick bar" to advertise on mobile last year, it was forced to remove it after a forceful negative reaction from consumers.

Brand may welcome the extra one-on-one conversations with consumers that will be possible with the new ad platform. However, in such an intimate environment, brands must be wary of the increased risk of stepping over the mark.

What's new?

Ad units

Burberry Facebook timeline
  • Sponsored Stories, Facebook's social ads which are served only to friends of users who click on them, are to be extended to the platform's mobile site and apps. Already live in the US, this will be available in the UK "in the coming months".
  • Half of Facebook's users access the site via mobile, so the update will allow brands to avail themselves of this reach.
  • While Facebook display ads offer limited scope for creativity, new premium ads can contain rich media, such as a video or status update.
  • In addition, it has launched coupon-style ads, tying in with Facebook "Offers".
  • For the first time, Facebook is also serving these premium ads on the log-out page, taking advantage of a space viewed by 35 million users each day.

Facebook brand pages

Manchester United facebook page
  • Brands can now "curate" content in chronological order with the Timeline function, bringing the pages in line with how consumers use the functionality.
  • The new bigger image at the top of the page allows for a more branded experience than previously.
  • Brands will be able to "pin" posts at the top of the Timeline, so they must think carefully about what content they display. These posts and the main image will serve as the landing page.
  • There will no longer be tabbed pages. Content is organised in tabs above the fold, which includes apps, in an attempt to make them easier to discover.
  • Users can see how their friends interact with brands on the site, presenting greater personalisation opportunities.
  • Content is more visual on Timelines, so brands may want to start being more creative with their posts.
  • Brands can send private messages to users, which could be useful for CRM purposes and reduces content overload on the timeline.

"Reach generator and performance tools"

  • Facebook says brands reach only 16% of their fans at present, but claims the "Reach Generator" tool will help them increase this to up to 86%.
  • Marketers will now be able to access current data and metrics from their page. This means they will be able to adapt a live campaign to maximise its performance, which previously could have taken days.
  • Brands can also schedule posts on their Timeline, so they can be more strategic with the content, making their brand page more like a campaign.

Brand view: Paul Evans, head of media, XBox EMEA Paul Evans, head of media, XBox EMEA

Select other views

It's questionable whether these innovations will realise a genuine benefit to brands and advertisers just yet. We should all be clear that in the short term, developments put in place by Facebook are about generating greater revenue and profit for Facebook.

I consider the platform's paid-for ad solutions to be experimental, rather than proven, from an Xbox point of view.

The fact that the solutions keep changing every few months does not help Facebook to establish a solid foundation of performance against roles and objectives.

Broadly speaking, we have watched as ad engagement rates (primary click-through and interaction) have been far lower than those that can be delivered through other online advertising platforms, even allowing for "social impressions" gained.

My hope was for stronger and more compelling social ad formats to address this.

The focus from Facebook at fMC, however, has been to provide greater reach for advertisers in an attempt to solve one of its other problems: only about one-fifth of brand posts are ever seen by Facebook users.

The much-heralded Reach Generator media format "guarantees that you reach 75% of your fans each month, and an estimated 50% of fans each week".

In effect, however, advertisers are being asked to use scarce media investment to fill the reach-void that exists within the site's own community messaging vehicles, thereby risking driving up advertising clutter and driving down the user experience on the site overall.

I'd urge Facebook to consider engagement solutions ahead of simply attempting to buy greater reach. Surely that can't be what social media is best used for?


Digital media: Ben Wood, managing director, iProspectBen Wood, managing director, iProspect

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The Featured Stories ads that will sit in the newsfeed are an interesting development. Sensibly, Facebook will allow brands to amplify communications only to existing networks of friends and fans.

So, when a user becomes a friend, they essentially opt-in to communication via the newsfeed.

Users, being smart, will quickly 'unlike' brands if this becomes spammy; brands must build engaged communities of friends and fans, releasing only advertising that is useful and relevant.

The interesting pinch point will be the mobile platform, where users tend to interact with the newsfeed, and advertising has not featured in the past.

About a third of Facebook traffic is mobile, and the company clearly wants to commercialise this volume. If brands follow the basic rules of relevance and engagement, they should be fine.

With bigger ads and video ads, it's about the value exchange.

Users understand that they get this fantastic platform for free, but that in exchange they will need to put up with some advertising. Facebook needs to manage that essential tipping point between logical commercialisation and too much advertising killing the consumer experience.

These ads will drive consumers to move away from incorporating brands into their Facebook social graph unless they are genuinely adding value.


Digital creative: Tom Pointer, joint chief executive, Iris LondonTom Pointer, joint chief executive, Iris London


Select other views

Timeline for brands is finally here, allowing them to step out from behind the corporate curtain and be more self-expressive.

Tabs have gone, so agencies will need to kick, bollock and scramble to get their most prominent content featured in those main three panels.

As ever, brands with a comprehensive social strategy will benefit more than those still dipping their toes in the water.

With the looming IPO, Facebook must attract a higher calibre of brand; there are still too many ads for "your new hot date" or "discount Botox". Such ads won't cut it in the mobile format, taking up small-screen real estate.

Facebook's vault of user data isn't preventing the fall in engagement, while other micro social networks gain traction. As long as Facebook continues to put content first and ads second, users will remain engaged.

The premium formats create a richer value exchange for consumers, and functionalities like Reach Generator and Brand Stories in the news feed will deliver – but only if the content is spot on.