1 Comment

Summary:

Us Weekly’s newly redesigned Facebook page comes complete with a Tweet stream, red carpet video clips, breaking news updates, and a big “spo…

imageUs Weekly’s newly redesigned Facebook page comes complete with a Tweet stream, red carpet video clips, breaking news updates, and a big “sponsored by State Farm” logo. The gossip mag sold sponsorship of the page to State Farm as part of an existing ad campaign, but AdAge reports that Us Weekly plans to offer the inventory as a standalone buy in the future. It’s just the latest example of a third party using the Facebook platform (and its rabid user base) to make money — without splitting any of that revenue with the network itself.

Facebook is already missing out on millions of dollars in virtual goods and ad sponsorship revenues. When members play games like Mafia Wars and Sorority Life and buy credits or sign up for sponsor offers (typically credit card applications and subscriptions to services like *Netflix*), that money goes right to the app developer.

Some developers argue that their games increase Facebook’s stickiness, which becomes a value add because the network can serve more ads to users over a longer period of time. But Facebook is still struggling to convince advertisers that its ads are worth buying; if more companies start selling ad space on their own pages, there’s a greater risk of ad clutter, conflicting messaging and devaluation of the network as an ad channel overall. And if that happens, then Facebook may be forced to start pushing ad-sellers (and developers) for revenue-sharing deals.

  1. "…there’s a greater risk of ad clutter, conflicting messaging and devaluation of the network as an ad channel overall."

    I agree, but would this more negatively affect Facebook, or the page of the firm that is doing the extra advertizing?

    Share

Comments have been disabled for this post