One secret reason why Facebook ad revenues haven’t quite taken off like they should – and are, in fact, decelerating – is that for years now, brands have advertised on Facebook without paying Facebook.
Here’s how they’ve been doing it:
- Brands build a “page” on Facebook.
- Facebook users become “fans” of that brand page, thanks in part to ad campaigns off Facebook.
- The brands post video, photos, or text to the page.
- That content goes into fans’ News Feeds.
Yesterday, in front of more than 1,000 advertising executives here in New York, Facebook announced a new ad product it hopes will finally convince brands to do more than use Facebook’s free features. The pitch boils down to a number: 16% When a Facebook page owner posts a piece of content to their page, and that content gets dispersed into the News Feeds of that page’s fans, only 16% of those fans will actually see that piece of content. Facebook’s new ad product, called Reach Generator, is supposed to take that number, 16%, and push it toward 100%. Test campaigns pushed it past 95% in some cases. Basically, when a brand buys into a Reach Generator campaign, Facebook will push posts from that brands page into its fans’ News Feeds, mobile News Feeds, and log-out screen until almost all of that brand’s fans see it.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.