updated 06:56 pm EDT, Wed May 23, 2012
Social network looks to bolster ad business
Facebook is in the process of launching a system to allow advertisers to measure the impact of their advertising efforts on the social network. The company is also looking to allow external advertising agencies to buy premium ad slots in users' news feeds. As The Financial Times reports, the changes to the site's advertising policies come as Facebook attempts to instill confidence in its capacity to leverage its massive user base in the world of targeted advertising.
Facebook's new system has reportedly impressed the agency heads and chief marketing officers with which the social network collaborates on its advertising efforts. A primary concern expressed by companies skeptical of Facebook's ad model has been the site's inability to reliably calculate a client's potential return on investment for an ad campaign. Ad execs familiar with Facebook's efforts have expressed confidence that the network is making progress in developing a system that will address these concerns.
The social network is considering combining its own demographic information on users with information provided by by clients, enabling deeper drill-downs into customer behavior, though this degree of collaboration could raise additional privacy concerns for a company already dealing with privacy-related issues.
Facebook will also bring down the walls between its own advertising sales force and outside firms using automated systems to purchase ads on the site. Going forward, outside groups will have the ability to broker premium deals for ads appearing within users' news feeds.
Since General Motors announced last week that it would halt its paid advertising operations on Facebook, the social network has been struggling to build confidence in its paid ad model. Adding to Facebook's ad troubles, an AP-CNBC poll recently found that only four percent of Facebook users reported clicking ads on the site often, while an overwhelming majority never or seldom clicked ads.