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Can Facebook Make Its ‘Engagement Ads’ Work?

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Forecasts for social-network advertising were already being scaled back long before the credit crisis began dampening ad spending, but Facebook is keeping the torch burning for its new “engagement ad” format. The format, which asks users to interact with an ad and then shares that action with friends, launched back in August. But today throws some cold water on the idea.

While Facebook has claimed 70 of America’s 100 biggest advertisers as clients in the last year, its share of total U.S. online display ad views was only 1.1 percent, against MySpace’s 15.9 percent, noted, before rolling out a procession of skeptics of Facebook’s ad strategy. Forrester researcher Jeremiah Owyang, who has provided some of the best critiques of Facebook ads, calls the site’s offerings “confusing.”

Despite the promise of leveraging social-profile data to create insanely hypertargeted ads, Facebook struggled with its Beacon program to navigate privacy concerns. Now it’s plowing ahead with “social ads,” another type of ad that leverages users’ on-site behavior without direct interaction. As the downturn begins to hit advertising budgets, the social networks hope they can find a format that both leverages the interactivity of their platform and is is compelling enough to get users to click through. If they can’t, they risk being left with nothing to sell but bargain-basement display ads.

3 Responses to “Can Facebook Make Its ‘Engagement Ads’ Work?”

  1. This has to be one of the worst ideas yet to come from facebook…Engagement ads?!

    honestly, who on earth would want to engage with an ad?!! People ignore them let alone engage with them?!

    i think it will flop

  2. The whole point of social media advertising to inject the brand into the conversation in a meaningful and engaging way, without interupting the normal user experience. It's not always easy, but it's possible. At Watercooler we've found that the best way is to move away from standard IAB display ads and use sponsored features to make the brand part of the product in a way that users find beneficial. Lots of ways to do that, but getting media buyers to look at metrics beyond reach and frequency is challenging.

  3. I think that what facebook and myspace and the other social networks do not under stand is that members conversations have value and that ad/anything that seems like an ad is an interruption in the conversation.

    This seemed to work for while in the old media world of television; where we had no way to escape the advertisement/interruption in the conversation. Now we have the ability to go around the interruption in the conversation. Now we have the ability to create and consume the conversation; and the conversation happens in real time and in man places. "Follow me:" :)