The world's No.1 social network Facebook
Inc(NASDAQ:FB) is now focussing on ensuring that its ads result in a measurable
return for its advertisers in the form of generating more business for them.
Data collected by the company had showed
that social ads - those connected to a user's News Feed with friends `liking'
it - garner more responses than traditional display ads which appear on the
side of the page. Currently less than half of the ads on Facebook are
classified as social ads, but the plan is to increase this and make it more
worthwhile for advertisers, who see the social network as a huge marketplace
for creating brand recall.
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The inaugural quarterly results
announced by the company on Thursday, showed that mobilisation of revenues are
a challenge for the company with more of its users migrated to mobile devices.
In the June quarter the company's advertising revenues rose 28 percent to a
year ago to $992 million, but in terms of volume the number of ads actually
declined 2 percent on year.
Revenues from sponsored stories were
about $1 million a day, but these still account for a minuscule percentage of
the total ads on the site. The goal is to increase the share of such ads and
those which appear as part of News Feeds, Chief Operating Officer Sheryl
Sandberg said.
Ads on mobiles showed a higher response
from users according to a study by TBG Digital, followed by those in News
Feeds, Sponsored Stories and the least response was from traditional ads.
Advertisers are now looking to see
whether the clicks on their ads are actually translating into business for
them. This is the area that Facebook plans to address and set in place a
tracking mechanism to monitor the Return on Investment of ad campaigns. This
information may be shared with advertisers so that they can optimally use the
Facebook platform to sell their products, while the network itself will gain
from this value-added analysis.
Apart from big businesses, Facebook is
also targeting small and local businesses which constitute a loyal and sticky
revenue source. Facebook has made it easier for such firms to launch ads
directly from their Timelines with just a few clicks.
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