Next Facebook Ad Format is under our News (feed)

Facebook’s next ad unit could be lucrative and save them from decreasing revenues due to increased mobile usage.  Little does the public know, that this potential ad unit has been sitting underneath our nose, and they’ve actually already implemented the technology for it. You just don’t know about it.  With all the analysis that’s being performed by stock analysts and supposed industry “experts”, little do THEY know, that there’s an opportunity that exists, that can drastically shift how Facebook monetizes the web and mobile.

Today, we’ll be going against what the analysts and experts are saying: devaluation of the stock, stagnant revenue growth and imminent peril, predicting that Facebook will disappear after a few years.

THE AD UNIT:  There’s a new type of ad unit that Facebook could easily turn on, that fits within their paradigm of maintaining a clean, unobtrusive approach to serving ads while keeping them social.   For simplicity purposes, we’re calling it, the “Expandable Newsfeed ad unit”.   It’s almost exactly as it sounds, but optimized for Facebook.

We’re not thinking of it as a traditional expandable ad unit that covers the whole screen, or an ad unit that works like an overlay/lightbox, but rather, one that leverages the EXACT same technology that already exists and is used for playing games within the newsfeed.

Don’t believe  that this exists?  Check out this example and play Angry Birds from your newsfeed.  This was a recent release from the platform team at Facebook.

Now, imagine this: leveraging the exact same concept, same treatment, same flow, same social features (with a few enhancements), but for a custom ad unit for your brand.

Facebook and marketers looking to create lucrative revenue and added visibility can employ this concept as follows:  

  • Ever heard of Video Egg (now called Say Media)?  If not, check out their examples
  • They earn their revenues on CPE (Cost Per Engagement)
    • This means that they don’t bill for impressions, rather when someone opens up and engages with the ad unit.  Facebook could do a combination of both. 
  • When you advertise on certain sites through them (Say Media), and target a very specific demographics, CPE can easily reach an upwards of  $3+/engagement
  • That’s quite lucrative when you have 900+ million engaged users, spending most of their time checking their newsfeed


Example use case for social marketers: Wendy’s Canada

We recently launched an app build with an agency partner for Wendy’s Canada in support of their national campaign called The Poutition. In keeping with Wendy’s addition of poutine to their restaurant menu, the public is urged to sign a petition on Facebook (or mobile) to make poutine Canada’s national dish.  From a marketing and strategic perspective, we created a fully integrated solution that involved a bilingual mobile Facebook web app with a corresponding desktop version.  In particular, this is where the expandable newsfeed ad unit could have contributed to added campaign success.  By enabling fans (and friends of fans or the target demographic) to sign the “Poutition” right from their newsfeed, there would be no need to direct them to the designated app page to participate, thereby limiting barriers to entry.  This would have been possible with the expandable ad unit loading up a mini-application via iFrame (exactly how you would normally build a Facebook app).

Here’s a quick mock-up of how it could look on mobile and why it would make sense for Facebook to implement this ad unit:

  • Non-obtrusive: the pre-expansion real-estate, the thumbnail, would be no different than the real-estate given to marketers today.  People are used to seeing these updates and sponsored stories, so it wouldn’t negatively impact their experience to see this type of ad in their newsfeed
  • Opt-in: in order to expand the ad unit, people must click on it.  This relates back to the CPE (Cost Per Engagement) model that we previously explained.  Opt-ins qualify interest and ensure ad delivery is made to a willing audience.
  • Increased Engagement: it will allow for marketers to engage audiences and bring the overall “app experience” to the newsfeed, increasing audience reach, while minimizing disruption to the user.
  • Mobile monetization: enforcing an HTML5 or non-Flash rule allows Facebook to better monetize mobile while billing advertisers at a premium cost.  Why more for mobile?  Well, it’s simple: it comes down to real-estate and attention.  As a marketer, I would be more than HAPPY to pay extra for an ad unit that expands to take up almost all of the mobile real-estate vs desktop where it takes up, say, 10% of the ad space.  Currently, photo uploads on Facebook mobile do this (take up 60%+ of real-estate). ie. Think Instagram or just general pics viewed on Facebook mobile…it almost takes up your full screen!  So to have an ad unit that expands to a similar size as a Facebook photo stream, could not only be inline with the Facebook user experience, but ALSO allow Facebook to charge a lot more money for these mobile ad units.  More attention, more real-estate =  more money.
  • New Revenue Stream: This could open up the door to a new revenue stream for Facebook.  Currently Facebook focuses on sponsored stories and display ads in a minimalist fashion.  Our proposed ad unit respects that minimalist paradigm, however, with optional user interaction based on interest.  This is EXACTLY what Facebook is missing that the rest of the web has: interactive and engaging ad units. There’s a reason why marketers still love expandable ad units and why a large chunk of digital marketing budgets still go to these ad banners: marketers simply see these ads as more engaging than the standard Facebook display ad or sponsored stories.  The expandable ad units we’re proposing will command and secure these digital marketing dollars currently being allocated elsewhere online.
  • The Technology Exists: The technology to deploy this type of ad unit DOES currently exist; granted, it’s via Flash files.  We can still technically implement something like this today, but would have to register the “ad unit” as a game which currently runs counter to Facebook policy.  The noteworthy point is that it can indeed be done without major platform re-tooling.
  • The Partners Exist too: Facebook needn’t worry about having to build these new expandable ad units either, they would be an added element to a custom Facebook app build, with the bulk of the Facebook development community capable of building them.  Therein lies the beauty; neither Facebook nor brands themselves would need the added technical skill to make this happen.
  • We’ll host the “ads”, Facebook can serve them to audiences: This is one of the most important concepts to grasp with this type of ad unit.  We’ll host the ad, just like we would serve up a Facebook app and iframe it, and Facebook could serve them to the right audiences.  The way we envision this, from a technology perspective, is to have a field in the area where we typically register apps called “expandable ad URL”, similar to where we include the mobile URLs for an app or the URLs for the Facebook app being iframed in.  Alternatively, there could be a specific set-up in the Ads section on Facebook where we place the URL for this ad unit.  The same/typical approval process would apply to expandable ads prior to publishing.
  • Custom Ad Units: These ads have unlimited permutations since they’re not standard by any sense of the word.  Each unit, would be completely customized, just like you were to create a custom expandable banner or a custom Facebook app.  The creative implementations and functionality are limited only by the creative mind.
  • Social Layer: The biggest advantage that Facebook would have in comparison to the rest of the ad providers on the web, would be that they could easily embed a social layer on top of these ads, including the integration the integration of Open Graph actions: “John Doe loves Wendy’s”   “Bob Doe, Jane Doe, John Doe, all participated in the Wendy’s Poutition”.  This type of personalization, knowing that my CLOSEST friends are engaging with an ad unit, and thus serving it up to me as well, is exactly why sponsored stories work so well and why they would be a natural extension to this type of ad unit on desktop and mobile.
  • Changes On The Fly: The way we see it, just like you can optimize ads on Facebook today by rotating ads, uploading new creative, changing copy, etc…this ad unit/”mini-app” could easily be modified and enhanced since it’s being hosted on a server just as you would host a Facebook app.  It also lends itself to split-testing, and making creative updates, on the fly, it could very well be possible.

With these points in mind, we strongly feel that the next step for Facebook is to truly dominate the display ad space and provide the full gamut of display ad solutions, all with the embedded advantage of while keeping them targeted and relevant…via these Expandable Newsfeed ad units.

We know that Facebook’s stance is to avoid backlash from users from populating the newsfeed with ads, and we do understand it. The Expandable Newsfeed ad does not pollute the newsfeed with irrelevant posts, but rather, exposes audiences to brand inspired causes endorsed by friends.  This turns sponsored stories into expandable ad units or mini-apps, so that people can engage with the brand or app, from their newsfeed rather than clicking through elsewhere.

They’ve already created the technology for this concept. The next logical step would be to take that concept of in-newsfeed gaming and apply it to display ads/marketing that brands can leverage. It would be a big win, for both marketers and Facebook.

As you can see, Facebook isn’t going to disappear in a few years like some have predicted.  It’s only going to get bigger by acting smarter.

Food for thought: We came up with this concept in under 20 minutes.  Imagine what Facebook is planning, with large teams devoted to the evolution of the platform.

Please let us know your thoughts, criticisms and feedback below.  I’d love to hear what the industry thinks of this concept.

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