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Summary:

Facebook’s advertising efforts have produced mixed results so far. Now, one of its ad tech partners says it has more evidence the social network has cracked the code by selling ads in real time in users’ newsfeeds.

Mark Zuckerberg ringing opening bell
photo: Zef Nikolla

For those wondering when Facebook is going to figure out that advertising thing, Triggit has some good news: it claims that ads that appear in the site’s news feed are 16 times — in some cases 38 times — more effective than regular old Facebook ads. The ads are so good, in fact, that Triggit’s CEO calls them “Facebook’s Adwords” — a reference to the search ads that have made Google so rich and powerful.

If you prefer your good news with a grain of salt, you can take note that Triggit makes its living by helping marketers buy ads on Facebook’s exchange — the bidding platform where brands can buy ads in real time. The exchange, known as FBX, was supposed to jumpstart the social network’s advertising efforts.

According to Triggit, which is one several ad tech companies that Facebook permits to broker the ads, the cost for a large international retailer to obtain a customer on the news feed exchange is one-third the price of a traditional “right-hand rail” ad and 1/16th that of a traditional Google display ad. The company says the ads are especially taking off in international markets like Latin America.

“The big takeaway is that this is a game changer for advertising. It changes the economics for publishers too,” Triggit CEO Zach Coelius said by telephone, claiming that every other company that has a news feed will soon look to create an automated exchange too.

For believers, news feed-style ads are “native” and less likely to be ignored by consumers, while the use of real-time bidding permits masses of them to sold to the right people (based on retargeting data) with minimal effort.

If Triggit’s claims are even mostly true, that will be welcome news for investors who fret that Facebook’s advertising results haven’t lived up to their original promise.

Ad industry watchers, meanwhile, agree that the newstream ads more effective than other forms of Facebook ads. But they also caution that too many of them, including forthcoming video ads, could be off-putting to users of the social network.

  1. Facebook ads is really a great of help especially to online business professionals.

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  2. I find it very hard to believe that a Facbook Ad is 1/16th that of a traditional Google display ad as those typically are very reasonably priced (Usually less than $1).

    Perhaps you can expand on the pricing structure?

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    1. @lefty, yes whenever we get results back from FBX we think it’s a bug — the prices are always so much more efficient than anywhere else we’ve seen! In this case, the CPCs of News Feed ads were 1/16th that of a retargeted Google display ad. I’d say Google is definitely the second best place to retarget, but because 1.1 billion pairs of eyes focused on the News Feed, we find that these native News Feed ads generate in order of magnitude higher clicks because the ad units are as rich and as relevant as the stories around them. So, as CPCs = cost/clicks, when click volume is 10-20x higher, you see much lower CPCs than anywhere else on the web – including Google.

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      1. Lefty Website Design Thursday, June 20, 2013

        @Christina, thank you for your response, you may have a point. However, I’m still a firm believer in ‘you get what you pay for’ when you’re playing with the big boys (Google, Facebook).

        Facebook ads are cheap for a reason, visitors to Facebook are there to socialize, not to buy, sign up, or research. I’m sure some industries that are more socially driven (wedding planners, musicians, etc.) have some success with Facebook ads but for the most part it’s like trying to sell someone a Vacuum cleaner at a bar. Good luck!

        I guess I’ll have to give it more of a try before I knock it. You may be onto something…

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  3. No shit.

    They’re cheap because they’re a new adformat in a closed enviroment.

    Now demand will rise – and so will the price.
    And then effect of it the channel will normalize, just like FB ads did great in the start but surely and slowly normalized.

    RT was the display godsend 6 years ago – just like dynamic RT ads now have taken off and slowly will normalize.

    Writing a sensationalist(ish) piece about how great a powerful inventory source brands NEW AD format is – without perspective is …well droll.

    A little perspective that the same story could be said for FB ads at the start – and that given history this might to soon to cork the champagne.

    Does no one think anymore?
    Does no one think why Search Ads in themselves as a format are superior natively to any adformat where you don’t have direct content correlation to an active action by the user?

    Heepus me.

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