Facebook is pitching its latest series of ad formats to big name advertisers such as Ford Motor and PepsiCo, but it needs you and your friends, too.
The latest ad format that the social network has come up with is a platform that tells users which of their Facebook friends have expressed interest in a brand or product featured in an ad.
The social-context ads, which Facebook actually started rolling out over a year ago, are based on data it collects on the likes and friends of its users.
The ads appear on the right side of a user’s homepage, with an image and headline from the advertiser.
Alongside the ads are the names of any of the user’s friends who have clicked on a button indicating they like the brand or ad. The user is also offered a chance to indicate he likes the ad via the ‘Like’ button.
Facebook says it is starting to see results with major marketers, such as a recent deal with Nike to buy ads on users’ homepages across 20 countries. The ads are reportedly selling for around US$100,000.
Sheryl Sandberg, Facebook’s chief operating officer, told the Wall Street Journal that, “Marketers have always known that the best way to sell something is to get your friends to sell it. That is what people do all day on Facebook. We enable effective word-of-mouth advertising at scale for the first time.”
As part of its bid for a bigger slice of the online-advertising pie, Facebook opened four international sales offices last year and another one this year in Hamburg, Germany – doubling its ad-sales staff since 2009.
The latest ads mark another attempt by Facebook, which is nearing 500 million users, to make money from personal data it collects about them. And most surprisingly, so far the social network has not received any complaints from users.
But Facebook has attempted such feats before. Who could forget the ‘Holy Grail’ of advertising – Beacon – that was quite literally launched and dumped with 6 weeks?
In that attempt, Facebook placed the messages directly inside the news feed of the site and also included a small photo of a user’s friend, along with his or her name. It just happen to be Christmas when it launched though and users complained about ‘spoilt’ surprises.
Facebook says the people whose names it picks to feature in the ads have voluntarily indicated they like a brand, and it shares their names only with those they have identified as friends.
Still, some users may not realise that clicking a button to indicate they like a brand gives Facebook permission to use their names when the site shows an ad from that brand to their friends.
So, can this new ad format finally pull Facebook into revenue?