Facebook's Ad Genius Says Appvertising And E-Commerce Are The Future

Gokul RajaramFacebook’s Gokul Rajaram joined the company after years running ad tech at Google.

Photo: Gokul Rajaram / Facebook

Facebook’s about to report its earnings. But those reflect its past. On to the future!One of the people building that future is Gokul Rajaram. He’s a former Googler who sold a startup, Chai Labs, to Facebook two years ago and joined the company to help shape its advertising products. 

Wired just profiled him, and the hints he gives about the future of Facebook ads are a must-read for anyone thinking about Facebook’s potential.

In Facebook’s all-important mobile business, the biggest opportunity Rajaram sees is what we’ve dubbed “appvertising”—ads in Facebook’s mobile apps for other apps.

When a friend uses an app to upload a photo or video, that already appears in their friends’ News Feeds. App makers could pay to highlight those actions and make them appear more frequently—and then they’ll pay Facebook as much as $1 to $3 per installation, Rajaram tells Wired.

He sees Facebook’s role in advertising as the “mid-funnel”—a reference to a consumer-marketing model called the “purchase funnel.” Brand advertising, or display, dominates the “early funnel.” Search advertising is “late funnel”—the consumer is ready to buy at that point and they just need to get pointed to somewhere where they can complete the transaction.

The “mid-funnel” is where people are gearing up for a purchase but need help—often from friends—to make up their mind.

With the mid-funnel in mind, Rajaram is still bullish about Offers, Facebook’s spin on the viral discount model popularised by Groupon.

And he also sees potential in simplifying the process of buying Sponsored Stories, Facebook’s core advertising product for the businesses which build fan pages on the social networks.

Facebook recently acquired Karma, a gift-giving app which prompts friends to buy presents for friends on occasions like birthdays. When similar features are rolled into Facebook’s desktop website, it could really blow up.

So that’s what we should watch for in Facebook earnings, besides the top-line and bottom-line numbers: the early signs that Facebook’s mid-funnel ad products are gaining traction.

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