Sunday, August 19, 2012

Watching Facebook Try to Fashion an Ad Strategy to Justify its Market Cap: Priceless

Facebook?s (FB) socially-driven ads are supposed to be something special ?- a vast improvement over highway billboards or those things Google (GOOG) buys in newspapers. On Facebook, companies embracing ?social marketing? can advertise directly to fans, and companies can use those fans to reach their friends. A press release about a comScore study called ?The Power of Like? trumpeted the ?virtuous cycle of brand impact? available on Facebook ?- display ads attract fans, marketing communications in the news feed reach fans and their friends, and those are supplemented by sponsored stories and promoted posts ?to maximize reach and brand resonance.?

Now Facebook is experimenting with a new kind of advertising for mobile, reports AllThingsD. The ads are called ?page posts,? and as Peter Kafka explains, companies will be able to place posts in a user?s news feed, even if those people aren?t fans of the brand.

In other words, Facebook is experimenting with having companies run ? normal ads.

What a good idea! We admit that so far we have found Facebook ads underwhelming. So has the market.

FB Chart

FB data by YCharts

But as Kafka says of this new experiment, ?if Facebook makes it a full-blown option, it will open up a lot more mobile ad inventory for Facebook (ditto for regular desktop ads, which will work the same way).?

Yes indeed. Selling normal ads might bring in more money. It?s hard to argue with that.

Hey Mark Zuckerberg, have you seen Mad Men? It?s a television show about this brand-new field called Advertising. You should watch it, you might get a few more ideas.

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Source: http://www.forbes.com/sites/ycharts/2012/08/17/watching-facebook-try-to-fashion-an-ad-strategy-to-justify-its-market-cap-priceless/

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