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Facebook Ad Prices Increase, Frequency Drops

Facebook's redesigned format means marketers should expect to pay more for right-hand-column ads. The good news: Users will see fewer ads.

Facebook Privacy: 10 Settings To Check
Facebook Privacy: 10 Settings To Check
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Facebook this week will launch redesigned ads that appear on the right-side of your news feed, the company announced. For users, the news is good: You can expect to see fewer ads. Advertisers, however, should prepare to pay more: Fewer ads served means more competition at auction, the social network said.

Facebook first announced the new ad format in April. Images are larger and use the same proportions as News Feed ads, which makes them simpler for marketers to create, the company said. In early tests, engagement with the new ads tripled.

"The redesign of right-hand column ads is part of an ongoing initiative to improve our ads in general," Facebook said in the announcement. "These results suggest that we're on the right path: People are finding the new right-hand column ads more engaging and advertisers, therefore, are getting more value for their ad impressions."

[Facebook's latest privacy changes include welcome improvements. Read Facebook Privacy: 10 Settings To Check.]

Because Facebook will serve users fewer right-hand-column ads, competition for ad space will increase -- as will the prices, the social network said. Facebook declined to comment on how much more marketers should expect to pay.

Facebook acknowledged that all businesses may not welcome the bump in price -- particularly those that value high raw impressions -- but said it believes that better engagement will offset any decreases that businesses experience.

"The increased visibility of the new right-hand column ads, combined with our strong targeting features like Custom Audiences and Partner Categories, means marketers are better-equipped than ever before to deliver beautiful, relevant messages that help drive key business results," Facebook said.

Facebook advertising has undergone a number of updates this year. In March, the social network launched a new ad campaign structure to improve how businesses organize, optimize, and measure ads.

Most recently, the social network announced a new feature for users that details why you see certain ads and lets you adjust your topics of interest. To improve ad relevancy, the social network also started using app and website data from your browsing habits. This means that if you search for new sunglasses, for example, you can expect to see ads for them on Facebook.

Facebook will automatically turn on this type of advertising, which other websites -- including Google -- use, too. To prevent Facebook from using your online browsing habits for advertising, you can opt out.

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Kristin Burnham currently serves as InformationWeek.com's Senior Editor, covering social media, social business, IT leadership and IT careers. Prior to joining InformationWeek in July 2013, she served in a number of roles at CIO magazine and CIO.com, most recently as senior ... View Full Bio

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Kristin Burnham
Kristin Burnham,
User Rank: Author
6/24/2014 | 3:46:21 PM
Re: tough timing
^That's it, Lorna. A push to deliver more relevant ads (and content) to users. More targeted advertising means they can rationalize an increase in advertising cost.
Lorna Garey
Lorna Garey,
User Rank: Author
6/23/2014 | 5:16:29 PM
Re: tough timing
Maybe they figure, raise prices by throttling supply and see if users respond to fewer, and presumably more targeted and higher-quality, ads. Worst case, they backtrack.
User Rank: Author
6/23/2014 | 3:23:33 PM
tough timing
This is not great timing for Facebook, given Gallup poll that found social ads face an uphill battle with consumers. See the related WSJ story: http://online.wsj.com/articles/companies-alter-social-media-strategies-1403499658
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