Facebook Struggling To Make Engagement Ads Work?

This story was written by Robert Andrews.
Forecasts for social network advertising were already being scaled back long before the credit crisis began filtering through to advertising as a whole, but Facebook is keeping the torch burning for the holy grail of social ads - 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 WSJ.com today has a grab-bag of suspicion toward the offering

While Facebook has claimed 70 of America's 100 biggest advertisers as clients in the last year, its share of total US online display ad views was only 1.1 percent, against MySpace's 15.9 percent, WSJ.com noted, before rolling out a procession of sources to support the stat. Forrester researcher Jeremiah Owyang, who has provided some of the best critique on Facebook ads, calls the site's offerings "confusing".

So the search for the holy grail goes on. Despite the promise of leveraging social profile data and the interactive paradigm to create insanely hypertargeted ads, Facebook struggled on privacy grounds with its advanced Beacon program. It's still plowing ahead, though, with "social ads", another type of ad which leverages users' on-site behavior without direct interaction. As the downturn begins to bite advertising budgets, the social networks hope they can hit on a format that both leverages the potential of their platform and proves clickable by users - else, they risk being left with bargain basement, dumb 'ol display ads.

By Robert Andrews