How Facebook's Redesign Will Help It Make More Money

Facebook CEO Mark Zuckerberg unveils News Feed changesFacebook CEO Mark Zuckerberg unveils News Feed changes

Photo: Owen Thomas, Business Insider

Facebook just revealed a major redesign of its ‘News Feed’ –  that centre column of photos, status updates, and news you first see when you go to or open a Facebook app.Here are three ways it will help Facebook make more money.

More video ads. The new News Feed will feature bigger videos that can be played right there on the page.  Mark Zuckerberg says video ads are next. That should boost Facebook’s advertising revenues quite a bit. Advertisers love buying video ads online (because they are like TV commercials) and they are typically willing to pay a 50% more for them then they pay for regular ads.

More endemic advertising. Gadget advertisers will pay a premium to buy ads on the gadget section of The New York Times. Automotive advertisers will pay a premium to buy ads in the “autos” section of The New York Times.  This is called endemic advertising. Today, Facebook announced that it split the one News Feed into several different feeds which users can toggle between. For example, users can click into a “local business,” “sports” or “news” version of their feed. That kind of sectioning of the news feed should lead to more endemic advertising for Facebook, and increased ad rates.

More engagement. There are two ways Facebook can increase its advertising revenues. It can increase the amount it charges advertisers each time users load their ads OR it can increase the amount of times users load pages with ads. The new News Feed should do the latter.

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