Facebook's new ads 'will hook friends into the selling circle'


By Noel Young | Correspondent

February 24, 2012 | 3 min read

Facebook is to give advertising a higher profile on its pages. The company is said to be poised to announce upgraded "Premium Ads" that will be more prominent on the social network.

Friends may join the advertising mix

The new ads also will have more of what Facebook calls "social context, " says the San Jose Mercury News, quoting "internal documents."

This means the friends of the people who are fans of a particular product that advertises on Facebook -- not just those who have hit the "Like" button for that brand -- will see an enlarged version of the product's advertising.

Those ads will say the user's friend likes the brand, adding a social context that Facebook says will make the ads 80 percent more likely to be remembered.

One expert raised doubts about the idea. Karen North, who heads the University of Southern California Annenberg Program on Online Communities, cautioned , "People do like getting information from friends, but as soon as that's outed as paid advertising, people are going to see it as less trustworthy."

The Mercury News said company officials declined to comment on the documents, which they had obtained .

Analyst Rebecca Lieb, of the Altimeter Group, commented, "It's really very important and very interesting, because it almost brings advertising into the realm of the testimonial and word of mouth."

Yoni Yadgaran, an analyst with Wedbush Securities, understood the move. "Going into their IPO, they were going to have to be a lot more aggressive in terms of how they approach advertising," he told the paper.

Ads brought in $3.15 billion in revenue for Facebook in 2011 -- 85 percent of the network's revenue and a 69 percent increase over 2010.

When will we know officially about these new ads? Well Facebook is holding an invitation-only conference for marketers in New York next Wednesday. Watch this space.


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