Peter Kafka

Recent Posts by Peter Kafka

Facebook’s Ad Plans Are Still Under Construction

Shutterstock/Uros Zunic

When Facebook was getting ready to go public last year, it told investors that advertising on the social network was a work in progress.

Which meant it didn’t really know the best way to turn its hundreds of millions of users into ad dollars — even though it was already generating billions of ad dollars.

Turns out, you can’t accuse the Facebook folks of false advertising.

Today the company is overhauling its ad strategy in the name of “simplification” — and in turn, dumping lots of products and tactics it has announced over the past couple years.

That means it’s going to trim down a list of 27 different ad units it sells today (though getting Facebook executives to explain exactly what they are cutting leads to unintentionally comical responses).

And instead of asking advertisers to pick an ad unit, it will ask them to tell Facebook what they want to accomplish, and then Facebook will help them figure out the best approach. Sort of like telling a waiter that you’re in the mood for fish, I think.

The bigger point, which Facebook is reluctant to spell out in language that a normal human could understand, is that it has been changing its overall approach to ad-selling. That is: Instead of arguing that Facebook ads should be different from regular ads because they’re “social,” they are letting marketers buy traditional ads and layer “social context” on top of them, if they want to.

This is a shift from the messaging Facebook was pushing, with great fanfare, in the spring of 2012, after it rented out New York’s Museum of Natural History. Back then, it was telling marketers that their ads should really be “content” that users would share on their own. If advertisers wanted to, they could amplify their results by buying more reach.

New model: Buy ads on Facebook. And then Facebook users might make them social, which will give them more reach.

During the press conference the company hosted today, I went around with Facebook reps a couple times about whether this was a pivot or an evolution. You can guess which term the company preferred.

And there’s nothing wrong with that. After all, Facebook is still on track to do something like $6 billion this year, so you certainly can’t say this is an act of desperation.

Still, Facebook’s overarching pitch — to both advertisers and investors — is that it was going to reinvent ads, in a way that only the world’s biggest social network could do.

But last year the company rolled out its Facebook Exchange, which let advertisers buy some Facebook ads the same way they buy them on any other Web site. Now they’re changing their approach to the rest of their ad inventory, as well — in a way that will look much more familiar to advertisers. The trick will be making sure they don’t become too familiar.

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The problem with the Billionaire Savior phase of the newspaper collapse has always been that billionaires don’t tend to like the kind of authority-questioning journalism that upsets the status quo.

— Ryan Chittum, writing in the Columbia Journalism Review about the promise of Pierre Omidyar’s new media venture with Glenn Greenwald