Facebook could debut Sponsored Search ASAP

In a move to capture more revenue and beef up its search results, Facebook gets some sponsored ads

Technology trends and news by Krystal Peak
August 22, 2012
Short URL: http://vator.tv/n/2993

We are hearing though the grapevine that Facebook is marketing to companies that ability to buy Sponsored Results for their search product.

Word came out last month that this advertising option was being tested and it would roll out soon, now, according to several sources, Facebook is getting ready to launch as soon as Wednesday. This product allows marketers to target users looking for specific apps, Pages, and Places and insert a link to their own app, product or post. 

One limiting factor, however, is that advertisers cannot direct users off-site with the ads yet -- so the company has to really beef up their Facebook activity and effectiveness. 

Companies that have tried this new product out during the testing phase include Zynga, Kixeye, and Match.com.

As Facebook looks to grow its search functions and abilities it may run into some hiccups because of the behavior of the average user is not usually as much in discovery mode, but rather in the targeted focus mode -- I want to find that one specific things someone told me about, not tumble around and learn about wine and chefs pairings (like one might on Google).

Facebook sent messages out to at least some advertisers Wednesday morning stating:

“Sponsored Results launches today and we wanted to share the details of this product with you. Everyday, many people on Facebook use our search to find people, places, and things. We want to help them better find and discover the brands, products, and experiences relevant to them. Sponsored Results gives brands the ability to buy ads in search results, bringing more awareness and traffic to your App, Page, or Place. Sponsored Results give you:

1. Expanded distribution of your message, with placement in one of the most used features on Facebook.

2. The ability to target what people are looking for, by appearing alongside related Apps, Pages, and Places.

3. Flexibility to customize your landing destination, such as a specific tab on your Page.

Brands are not able to drive offsite using this product, but you will have the ability to drive to specific Pages, Tabs, and Canvas Applications.

Sponsored Results will be available in Power Editor later today.

Facebook took a pretty big hit last month and early this month, dropping to a new low at half its IPO price. 

Then, on Friday, a U.S. District Judge threw out Facebook’s $20 million settlement to settle a lawsuit over the company’s Sponsored Stories, in which users, who “like” a certain brand on the site, are then used to endorse that brand, sometimes without the user’s consent, in some cases without their knowledge.

Though the offer was rejected, Facebook will be allowed to modify the settlement proposal to address these concerns.

Facebook users are increasingly moving toward using the website exclusively on mobile. While at first glance this would seem to be a good thing for the company, it may turn out to be anything but if the company doesn’t find a way to sell advertisements on its mobile app soon.

Facebook saw its mobile monthly active users (MAUs) increase by 67% in the year from June 30, 2011 to June 30, 2012, according to a document filed with the Securities and Exchange Commission on Tuesday.

If that wasn’t enough to let Facebook know that mobile advertising will soon be crucial, in June of this year 102 million Facebook users accessed the site exclusively through the mobile app or mobile website, a 23% increased from the 83 million who did the same during March.

The 102 million accounts for nearly 20% of the 543 million MAUs Facebook had in June. The other 441 million, the document says, accessed from both a personal PC and a mobile device.

Facebook attributed the growth in daily active users (DAUs), from 526 million to 552 million in the quarter, to mobile usage.

This past quarter, Facebook saw an extremely large portion, $992 million or 84%, of its total revenue come from advertising. That is a 28% increase quarter to quarter. And sponsored stories alone are garnering $1 million a day -- I wonder if Sponsored Searched could even touch that golden egg status?

The company has made efforts to expand its advertising base, for example by running sponsored advertisements on Zynga’s website, and those efforts have proven to be largely successful. A quarterly report from ad agency TBG Digital earlier this month showed that Facebook was making 58% more per advertising than it was the year before.

Sponsored search results are clearly another way to capture ad revenue and show diversity and growth quarter-over-quarter.

Still, Facebook has done little to expand their mobile advertising operation beyond the occasional sponsored story and will need to move fast so that next quarters' results show some significant change.

(Image Source: Techcrunch)


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