Facebook wants companies to pay
Facebook has revealed new ways for businesses to reach its 845 million users directly across all devices, including mobile, as it races toward a multibillion dollar IPO.
With new "Premium on Facebook" ads, marketers can expand their reach on the social network by paying for a video, a coupon or other message to appear on the homepages of Facebook users, on the logout screen and even within users' newsfeeds. Until now, the newsfeed had been free of paid marketing messages.
"Our vision for marketing is that it is as good as any of the content you and I see on our newsfeed from a friend or family member," Facebook Vice President of Global Marketing Solutions Carolyn Everson told about 1,000 guests in the auditorium of the American Museum of Natural History in New York City on Wednesday.
The event, which included an after-party with entertainment by singer Alicia Keys, marked a major charm offensive on Madison Avenue advertisers led by Everson, Chief Operating Officer Sheryl Sandberg and other Facebook top brass.
The revamped features represent the company's latest push to convince businesses to spend money advertising on the world's No. 1 social network, rather than simply using Facebook as a free marketing tool. The new ads also mark Facebook's first effort to generate revenue from the growing ranks of consumers who access the service on mobile devices.
"Premium and mobile ads will help Facebook generate more revenue, particularly from big-brand advertisers like Wal-Mart and Macy's," said eMarketer analyst Debra Williamson. "Premium will enable advertisers to have a broader reach on Facebook, but they will have to pay for that."
Allowing paid company posts onto users' newsfeeds is a risk for Facebook because newsfeeds could get overwhelmed with advertising messages, Williamson added.
"Facebook advertising in the past was off to the side," she said. "Now Facebook is taking the bold step of putting advertising right in the mix between photos of babies and updates on trips to restaurants."
Other new features let companies, as well as celebrities and brands, create self-contained mini-websites within Facebook using the Timeline format it introduced for users' profile pages earlier this year.
Facebook Pages will be available for smartphones starting later this year, executives said at the event attended by hundreds of advertising and marketing executives.
Businesses initially seemed to like the expanded marketing arsenal, particularly the ability to target a growing population of cellphone-toting consumers.
About half of Facebook users access the service on a mobile device, but until now the company has not offered any mobile advertising - a drawback for marketers trying to reach those users.
"Mobile Facebook ads are huge. We'll be all over this," said Jason Goldberg, chief executive of online designer retailer Fab.com. "We're already seeing more than 40 percent of our daily traffic to Fab from mobile. Being able to reach Facebook mobile users will only increase that."