The New In Your Face Facebook Ads - Coming Soon!

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The New In Your Face Facebook Ads - Coming Soon!

After Facebook's disastrous IPO leading some to speculate Facebook's actual worth is in the $16-$24 range, it's worth examining what went wrong. Was it the Nasdaq computer glitches, which some claim resulted in $100 million in losses to investment firms? Perhaps a small factor. Was the initial stock price too high? Probably, but not the most important factor. Is the IPO debacle due to Facebook not monetizing its huge base of mobile users though advertising? Indeed, that is a huge factor. Look at a screenshot of the Facebook app running on an Apple iPhone where there are no ads to be seen:

Mobile advertising is a huge opportunity wasted by Facebook. Around 488 million users accessed Facebook via their mobile device in March. That's a lot of eyeballs that see absolutely zero ads.

If you think Facebook has only a mobile problem, you'd be wrong. I use Adblock Plus for both Firefox and Chrome and it blocks most advertising. Case in point, here's how Facebook looks with no ads under Sponsored (red arrow):

Ad blocking problems isn't necessarily just a Facebook problem - it affects any website dependent on advertising. There are ways around this though. Facebook could stick advertisements within the scrolling News Feed in the middle where most eyeballs are drawn. Everyone that uses Facebook checks out their News Feed the most. I can envision Facebook detecting your "Likes" and then displaying relevant products or services with affiliate links. For instance, one of my Likes is "Star Trek", so why not display a Blu-ray of one of the Star Trek movies or TV series in the News Feed?

Also, the current crop of sponsored links in the right sidebar is boring. It's true that Google Adsense ads are typically boring too, especially the text-only ones. However when you are searching for something, you might see an interesting text link relevant to what you are looking for at that particular time. Facebook is supposed to be exciting with lots of photos and videos in your News Feed. If graphical photo ads are going to compete with other photos on the page they need to be bigger.

The other problem with Facebook using your "Likes" to build your personality & advertising profile, is that it's not time-sensitive like Google (or Bing) searches. For instance, I may have 'liked' Rambo 8 months ago, but it doesn't mean I'm currently interested in buying the DVD/Blu-ray (I already own it). However, when searching on Google for "Rambo" there is a greater chance you are currently interested in buying the DVD/Blu-ray.

Still, knowing your "Likes" is valuable information for advertisers. If you like Mitt Romney, display a Mitt Romney ad or if you like President Obama display one of his ads. With around $1.4 billion to be spent this election season, leveraging the #1 social media site in the world to display an ad could be beneficial.

In fact, Facebook could really make some serious dough "selling" the News Feed space to Mitt Romney or President Obama. There are several viral YouTube videos - often with humor - that can impact people's perception of Romney or Obama. Cases in point, 'Hitler Finds Out Obama Ate His Dog', President Obama: "Dog Eater," the Music Video, or Time for Some Campaignin'. So why not offer photos, videos, or links to propaganda pro-Obama or pro-Romney puff-pieces articles? By appearing as a News Feed item, Facebook users can Like or Share the item therefore leveraging the social media sharing power of Facebook, which can make stories, videos, or photos go viral.

So in summary, here's my proposed mark-up of Facebook ads in the News Feed, right-sidebar, and the the left sidebar. [click for large image] new-facebook-with-ads-post-ipo.png

You'll notice in the picture above I have ads for Romney, Obama, Netflix, CafePress, XBox 360, Star Trek (Amazon Affiliate link) and I put a 'pretend' disclaimer 'Facebook Amazon Affiliate link' next to the Star Trek Blu-ray. My thinking here is that since Facebook is not an e-commerce site like Amazon or eBay, they can leverage the fact that Amazon pays affiliates a commission on products to the website that referred the customer. Facebook could be an Amazon affiliate and likely the largest one in the world at that. Similarly, CafePress, Netflix, and offer affiliate links. The ROI on affiliate links is often better than page impressions or pay-per-click (PPC), so this is another avenue Facebook can explore.

According to Business Insider, "Mark Zuckerberg has been extraordinarily clear that he cares more about Facebook's social mission than its business. Unless he has a major change of heart, he is not going to suddenly reverse course and start larding up the service with crap just to generate revenue." Yeah, well you've got thousands of shareholders to answer to now, so good luck with that.

Will I like advertising cluttering my mobile Facebook app? No. But if Facebook can display ads without it being overly obtrusive, I think users are willing to accept them. There is limited screen real estate on mobile devices, but certainly adding a few ads into the News Feed is a quick way Facebook can do this today without a major UI design of their mobile apps on iOS or Android. Combine mobile advertising with my News Feed and left sidebar advertising suggestions plus affiliate links and I think Facebook could make those who are mocking their $38 IPO look like fools in the near future.

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