Facebook has a grand scheme to make advertising on its properties less risky and less guess-work than buying ads anywhere else on the Internet. Facebook wants ads to be content, and now its Reach Generator allows advertisers to pay a fixed fee to guarantee that their content is seen by 75 percent of their fans. Of all the announcements made at the Facebook Marketing Conference on Wednesday, Reach Generator is the most innovative because it provides a powerful alternative to CPC and CPM for the world’s richest brands, and a way for Facebook make more efficient use of its inventory.
Here’s a breakdown of Reach Generator and the other big news from the Facebook Marketing Conference, and how it changed the marketing industry landscape.
Reach Generator – Rather than pay on a per-click or per-thousand impressions basis, Reach Generator lets advertisers pay a fixed fee based on their Page’s fan count. In return, Facebook guarantees exposure of a Page’s posts to 75 percent of their fans a month, and roughly 50 percent a week, by showing them as ads in the ads sidebar, news feed, and logout page. Typically a Page post only reaches 16 percent of a Page’s fans, so this creates a simple way to pay for added distribution.
It will be relatively expensive, though, and therefore only suited for the world’s richest brands. Facebook says the product has delivered up to 3x ROI and reach as high as 98 percent of fans for clients such as Ben & Jerry’s. It allows brands to leverage their existing investment in building a fan base for their Pages, but won’t address reaching new customers.
Since Reach Generator is only offered through Facebook’s premium managed spend ad account teams, it could shift some spend away from Ads API, or just increase the size of the pie. Facebook will be able to show Reach Generator-bought ads in whatever inventory is available, allowing it to earn revenue on ad placements that didn’t sell for much or even exist before.
Reach Generator will shift the burden of ad targeting and measurement from brands to Facebook, and prevent advertisers from accidentally showing a single fan multiple ads while missing others. By allowing brands to blanket their fans with a specific message, Reach Generator could become an important component of giant nation- or worldwide ad campaigns where brands typically buy tons of TV commercials.
Timeline For Brand Pages – Timeline and its cover image lets brands tell their story more expressively. Pinned posts let campaigns escape the reverse chronological feed, and brands can now host custom Open Graph Timeline apps. Direct fan-to-Page messages opens a new customer service channel, but Pages can no longer use a default landing tab to solicit Likes and app engagement. By increasing the complexity and potential of its Pages product, Facebook has strengthened the value proposition of third-party brand Page management solutions.
New Ad Units – Page posts can now be turned into ads that can appear in the mobile news feed and and on a large space on the Facebook logout page, in addition to the web news feed and web sidebars. Facebook’s goal is to turn ads into content and interactive experiences users don’t mind seeing, and then place them in empty space around the site or blend them in with organic content so they seem less obtrusive.
New ad inventory could boost Facebook’s advertising revenues, and open creative new ad campaign strategies. Still, some users may not want to see ads everywhere they turn. Facebook also officially launched its Offers news feed post and ad format for distributing free coupons which has been in testing for several months.
Real-Time Insights – Data on impressions, reach, people talking about this, clicks, video views, negative feedback and more will soon be available just 5-10 minutes after a post is published rather than two whole days later. This will teach marketers what content resonates most with their audiences, and give them the chance to immediately amplify the reach of a popular post by paying to also show it as a Sponsored Story ad. Real-time Insights could therefore improve the quality of branded content on Facebook while simultaneously getting advertisers to spend more.