Facebook ads downfall: more ads and shorter ads
Arrrrrggggghhhhhhh!!! Why Facebook, why?! When other’s blast you for policy changes and privacy infringements I staunchly defend you and your right to shape your offering however you feel fit, but I truly believe you’re making a mistake here! I’m sure you won’t let it go too far, but nevertheless this is blatantly the wrong direction!
wait, what’s happening?
As of the end of the month, new Facebook ads will be limited to 90 characters of body copy (down from 135 characters). While they may have reasons yet to be announced, many are speculating that Facebook upping the displayed ads to 7 [scratch that, now 9!!!) at a time earlier in the month is no coincidence. Lowering the ad copy length will create smaller ads and reduce the screen real estate the 9 ads will take up, but IMO that’s only making the problem worse!
theories on why
The blog Allfacebook.com is speculating this may be to boost advertising revenue as they approach their initial public offering, and if it’s a necessary evil then I guess it’s just something we’re going to have to live with, but it’s undoubtedly going to hurt advertisers on Facebook.
cost for advertisers
Fewer available ad slots meant there was more of a requirement for advertisers to bid only for relevant users who would be more likely to convert. Only the top 2-3 advertisers who were confident about their relevance to the user would be able to bid low enough and win the click enough times to sustain their advertising campaign at a cost efficient level. With more ads on display, these top advertisers will likely be drowned about by the poorer, less relevant ads, meaning lower click through rates for everyone and more importantly a greater irritant for the user.
short-term and the long-term
The beautiful thing about Google AdWords (and Facebook Advertising as well to an extent) is that the greater the benefit to the user, the greater the pay-off to Facebook and the greater the rewards to the advertiser. If click through rates fall from the addition of these extra ads, then in the short-run Facebook will be able to push up the CPCs. In the long-run though, if the user’s usage of the ads fall then there’ll be a tipping point between the higher CPCs and the advertiser’s ROIs, meaning less advertisers willing to invest.
could it be for the best?
However perhaps opening up the number of ad slots is a testament to the maturing of Facebook’s ad platform and it’s advertisers? It’s possible that the greater selection of ads is just what the platform needs to increase overall click through rate and increase competition, driving better relevancy. However, any increases in relevancy will be lost if users adapt to completely ignoring the right 20% of the screen.
the 30 second post summary
So Facebook is going to shorten their ads so they can fit more in. Either this will give users a greater choice of ads and drive up clicks, revenue and general goodness for all (users, advertisers and Facebook) or the current good advertisers will have their ads lost in a blanket of poor ads and users will ignore the wall of ads completely. The latter will mean a boost in ad revenue for Facebook in the short term (maybe long enough until their Initial Public Offering) but in the long-run the falling user interactions and click through rates will push CPCs too high for advertisers to sustain a cost efficient advertising campaign.
This is Facebook – they’ve got it covered. The last thing they’re going to do is create a ticking time bomb in the company’s revenue just as they get ready to float the company. We may find we have a bit more competition to our ads to begin with and this is a good thing, but Facebook has a lot more invested in this than anybody else does, so if cracks do begin to form in the user-advertiser-supplier trinity of their PPC platform, you can be damn sure Facebook will spot it a lot sooner than any of us will.