Facebook has quietly launched a new type of advertisement it hopes will help in the struggle to find a way to help advertisers profit from the treasure trove of demographic and other data it has gathered from members of its social network.
The new, so-called "Engagement Advertisements" aim to encourage Facebook users to interact with ads by leaving comments or sharing virtual gifts with other members, said Jeremiah Owyang, an analyst at Forrester who was briefed on the new scheme. Facebook has not yet formally announced the new offering.
"To combat dismal click through rates of traditional advertisements, these features emulate widgets and encourage users to increase member adoption, viral growth and brand interaction," Owyang noted in a blog post today. However, he cautioned that the plan will succeed only if advertisers create content that puts community first, find new ways to interact with users and change the criteria for measuring success.
Early users of the new advertising technique will include Paramount Pictures, Adidas and General Mills, Owyang said.
The new scheme lets users leave comments associated with the ads much like they post comments to their friends' profiles. It also lets advertisers create virtual items for users to share with their friends. In addition, users can become "fans" of a product, thus triggering a notification to their network of Facebook friends.
Owyang did warn potential advertisers that, according to Forrester's research, younger users of social networks are not interested in using them to learn about new products. Instead, these users are interested in communicating and expressing themselves on Facebook-like sites.
"While costly, risky and foreign to brands, the biggest missed opportunity for brands in social networks is to become part of the community, interact and build real relationships," he went on to note. "Although we should expect interaction rates and viral spread to increase with engagement ads, brands should wait and see how these ads click through rates perform."
Owyang said that companies that do use the engagement advertising scheme should:
- Focus ads on the community; - Interact with users in the community - don't ask them to link to other sites; - Change success metrics because it can't be weighed solely on page views or referral traffic.
"This announcement helps to set in place how online marketing will start to evolve," he added. "Widgets have already become advertising units, and now these advertisements are starting to become widgets."
As for Facebook, he suggested that they "hand-hold" customers as they navigate through the social network's frequently changing marketing plans.
"Facebook must develop a client solution that will help optimize these tools with professional services based on data, results and demographic information," Owyang added. "Marketers can't afford to experiment with their brand without the help of a trained and experienced group of social marketers provided by the platform."
Inside Facebook blogger Justin Smith spotted one of the new ads on Facebook last week when they were launched and noted that this type of ad unit has the potential to drive more engagement than any other such product on Facebook.
"The comments around the ad dramatically increase engagement with the unit, as the highly visible comments provide an opportunity for users to simultaneously draw attention to the ad by drawing attention to themselves," he added.
"While this could backfire if comments degrading the advertiser are abundant the ad comments powerfully take advantage of Facebook's social dynamics to draw attention to an ad in a way that is impossible without the social graph."
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