Daniel.Hjelmtorp.com

Facebook have become one of the biggest social networks in recent years. Thanks to word-of-mouth, a good service, easy access for small developers and users to develop their own applications, and lot of press attention its grown tremendously. The platform have attracted users and developers in the masses. But the one thing they still struggle with, the one thing to bring in the cash, advertising!

They tried a new model with its Beacon advertising system, which backfired horribly. It probably hurt their reputation and trust from from the users, but the fact remains, Facebook have problems with its ads system. Well, not the system, just that they don’t convert very well. The CTR are just to low. I’ve seen examples of this when my company in another country tried to generate traffic through advertising on Facebook. And those number were barely worth mentioning. When people visit social network site, their not there to shop, but to socialize.

Yet, Facebook is determent to monetize of its huge user base. The current ad-model works in such a way that ads are targeted depending on your interest and news-feed. But the new model they will incorporate, called Engagement Ads, show ads depending in your friends actions and what they do. The become the sender, turn them into marketers.

Interesting approach, but I’m septic. I wonder how transparent this will be or feel for the users. And it require them to actively take actions for the message to be delivered. And it still about Ads… and maybe to much focus on brands, thereby not suited for everyone.

“Facebook’s strategy is based upon the premise that people come to the site to see what their friends are doing and what they like. By having products presented as endorsements rather than commercial buys, they hope advertisers will reap a positive benefit.”

- Wired.com

I havn’t seen this new model in action and I probably don’t know the whole story. It will be interesting and follow and see if they manage to turn their ad revenue around.