Facebook adds up to 66% more ad inventory

Dennis Yu shares with our readers recent changes to Facebook advertising space. Many thanks to Dennis for sharing his insights and putting together this post!

Now With 5 Ads

That’s right– FIVE ads on one page, not three. Notice that the image is slightly smaller (but the same aspect ratio) and that the text is to the right of the image (not below). These ads are better for the user because it supports the linear visual flow of image to headline to body copy. Previously, users would view the image, then look up to the headline and then down to the body copy. And the more vertically compact format allows Facebook to place more ads on the page, which should increase their page level eCPMs (earnings per thousand impressions).

WHAT THIS MEANS TO ADVERTISERS

There is a lot more ad inventory. Remember the tab change to 520 pixels, where your custom tab couldn’t be as wide any more? Now you see why– to make room for ads. The benefit of being at the top of the page is even more important, since more of your ads are below the fold.

CPM bidders get hammered. If there used to be 3 people each paying a 15 cent CPM to show their ad on a page, Facebook makes a 45 cent page level eCPM. Now if there are 5 people paying 15 cents, Facebook is making a 75 cent CPM, which is a 66% increase in earnings. But if you’re a smart CPM bidder and target well, you will bid beyond the top of the suggested bid range and do much better than via CPC bidding. We still recommend CPC bidding, except when you’re looking for reach or have a very small audience to hit.

Average position is more important. Google, for all intents and purposes, has 10 positions on the right side of the page. So position in Google and Bing CPC is dependent upon position, where there is a log scale drop-off in your CTR and CPC by position. When there are only 3 positions on Facebook, you have a cliff. In other words, if the ad serving algorithm scores you as position 4, you don’t show up.

Remnant inventory is unlocked. Now a ton of low eCPM can show up. Facebook may even create premium positions in the top, like what Google has done, thereby creating incentive for advertisers to bid up to first position. It will be curious to see Facebook’s take on Google features such as sitelinks, reviews, frequency capping, position preference, accelerated vs even serving, and so forth.

Premium inventory becomes cheaper. The Facebook homepage is seen as premium inventory because of who can advertise there (currently only big brands with dollars), the exclusive ad features (video and quizzes, primarily), and the fact that there’s only one ad unit. DoubleClick experienced the same trend 10 years ago, when they could sell remnant inventory at $20 CPMs– stuff which sells for 20 cents nowadays.

Your CTRs will decrease, but CPCs will decrease, too. If you’re a smart Facebook marketer, you’ll know how to adjust to these changes. More ads on the page mean your ad has to stand out more. You better have more granular targeting. The folks who have campaigns with just a few ads in them will suffer.

WHAT YOU NEED TO DO ABOUT THIS

Multiply more ad variations. Don’t go crazy and generate 1,000 ads per campaign. That will potentially mark you as a spammer who is trying to trick the algorithm into allocating you excess inventory to test eCPMs. But do make sure that you are tightly aligning interest targets to messages. A good rule of thumb– if the audience size for your ad is above 100,000 people, then you’re probably not granular enough.

Focus on images as the most important attribute.In English speaking countries, we read left to right. In the new ad format image is even more primal in attracting attention. Your users scan ad images first to decide which ones to consider– and then they will look at the headline and body copy. Your copy means nothing if the image doesn’t first get their attention.

Make your ads social.Did you notice the profile update last week? Showing images of items and friend connections further reveals the social graph in a visual way. Your ads better reflect that. Are you running Friend of Fan targeting as your primary vehicle to acquire new fans? Are you setting up fan-only campaigns so that you are separating out the impact of messaging, while also comparing apples-to-oranges on your metrics? Are you sending fans to a custom tab on your Facebook fan page that has some sort of engagement– a reveal tab, a quiz, a video, a coupon, etc..– so those folks can share with their friends, too?

NOT SURE WHAT TO DO IN LIGHT OF THESE RECENT CHANGES?

Will your page break when FBML goes away?

Do you have the right metrics to measure your Facebook marketing efforts, especially as your other marketing channels impact your Facebook presence and vice-versa?

Webtrends has integrated solutions that address all of the above, combining ads, apps, and analytics. No need to worry about manually loading up ads and monitoring them for ad burnout. And no need to keep up with every update to the Facebook platform, considering how it will affect your page. Interested in learning more about Facebook Marketing watch one (or more!) of our social marketing webinar series.

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