The Pros & Cons of the Facebook Ad Experience
Since filing for their IPO in early February, all eyes have been on Facebook. Now, after a few short months of pitching to Wall Street investors, they are set to begin trading on the NASDAQ this Friday (5/18/12). This filing could value the social network at $100 billion.
So, how will this change the existing Facebook experience for users? The company derives 85% of its revenue from advertising, with the rest from social gaming and other fees. Our thoughts? The “Ad experience” will become “the Facebook experience.”
When you look back at the evolution of Facebook ads, it has been a slow integration that has become more prominent each year. Ads were launched in 2007—in 2009 three ads appeared in the newsfeed — by 2010 that number went up to four. And, in 2011, users started to notice a minimum of seven ads in their news feed.
So, is this good or bad? Here are our pros and cons of the growing Facebook Ad experience:
- The obvious and most important pro: Facebook Ads connect brands with their target consumers, and consumers with brands they are interested in. It’s a win/win.
- Facebook Ads are socially engaged. You can see what your friends are “liking” or talking about, as it pertains to brands (e.g., “Sponsored Stories”).
- For brands it’s a solution that can have a variety of outcomes (e.g., build a Facebook presence; build traffic around websites; or promote certain content/products)
- To the benefit of brands and users, Facebook Ads can be hyper-local (i.e., brands can target people located in certain areas).
- For users, the “Ad experience” is customizable. Any given ad can be hidden from view or a user can stop ads from certain advertisers all together.
- Facebook Ads are interactive; they usually include a call to action of some kind.
- It’s cost-effective and is based solely on results (i.e., Pay Per Click)
- Ads are becoming invasive. They used to appear only in the News Feed, now they appear on user’s timelines, photo views, in groups and more.
- To the disadvantage of brands, it is getting harder and harder to catch user’s attention.
- Anyone can create a Facebook Ad campaign and target it however they please. Because of this, a lot of ads are the equivalent of spamming. Facebook has been cracking down on this, but it is still out of control.
Conclusion: It’s no surprise—the pros outweigh the cons when it comes to Facebook Ads. There’s no question, it’s a great tool that benefits a lot of people. However, seeing that it is Facebook’s greatest revenue generator, will it ever become too much?
Lastly, in their IPO filing, Facebook said they would be adding ads to their mobile experience. Mobile is the last place to experience ad-free Facebook. We are all very eager to see what affect this has on social media’s reigning king.
Share your thoughts about the Facebook “Ad experience” in the comments!