Facebook members who access the world’s biggest social networking website on their mobile phone or other device will begin to see advertisements in their news feeds following the company’s announcement that is starting a new “Premium on Facebook” service.
Until now there were no paid advertisements showing up in the news feed, but that will change with the new “Premium on Facebook” offering which will let advertisers pay for messages, videos, or coupons to show up here, and mobile users, which account for half of all Facebook accounts, are part of this new service.
A statement explaining the change from Facebook’s Vice President of Global Marketing Solutions makes it clear there is to be a substantial shift in the way the company inserts advertizing into the Facebook experience. Carol Everson, speaking before 1,000 guests at the American Museum of Natural History in Manhattan on Wednesday said: “Our vision for marketing is that it is as good as any of the content you or I see on our newsfeed from a friend or family member.” An after party event featuring singer Alicia Keys underscored Facebook’s efforts at strengthening its relationship with advertisers and marketers on Madison Avenue as it prepares to raise $5 billion when it launches its initial public offering this spring.
Premium on Facebook, which also lets marketers insert their content on the homepage of users, on their log-out screen and use the Timeline feature to create mini web pages, marks the first time Facebook has attempted to make money from the growing number of people who access its website on mobile devices. Jason Goldberg, chief executive of online design retailer Fab.com, expressed enthusiasm over the new service: “Mobile Facebook ads are huge. We’ll be all over this. We’re already seeing more than 40 percent of our daily traffic to Fab from mobile. Being able to reach Facebook users will only increase that.”
Debra Williamson, an analyst at eMarketer cautioned that there is some risk for Facebook with the Premium on Facebook push because until now advertizing on Facebook was unobtrusive. “Facebook advertizing in the past was off to the side. Now Facebook is taking the bold step of putting advertizing right in the mix between photos of babies and updates on trips to restaurants.” Williamson noted that the new offering will let Facebook generate more revenue from advertisers, especially from big brand names like Walmart or Macy’s. “Premium will enable advertisers to have a broader reach on Facebook, but they will have to pay for that.”