Facebook 'making more difficult for brands to advertise for free'

Sri Lanka Source (ANI) Sunday 5th February, 2012

Social networking giant Facebook is gradually making it harder for advertisers to promote their goods for free on the website, it has emerged.

According to The Wall Street Journal, when Facebook filed for its initial public offering on Wednesday, the spotlight shifted from the site's exponential user growth to its ad sales, a metric that may have more bearing on its market value.

For years, many advertisers simply set up shop for free on Facebook, displaying their brands to users who 'liked' them.

But now Facebook is likely to turn many of those advertisers into paying customers, the paper said.

eMarketer Inc. analyst Debra Williamson told the paper that over the past couple of years, Facebook has started to make it more challenging to appear in the 'News Feed'.

"If Facebook wants to derive more revenue from big brand advertisers, they want to be in that 'News Feed' where everybody's eyeballs are," the Telegraph quoted Williamson, as saying.

Last year, as Facebook added more sections to the site, advertiser's free brand page updates started getting overshadowed in users' news feeds according to the article.

Amid this shift, Facebook last year unveiled a new ad format, dubbed Sponsored Stories, which requires marketers to pay for exposure for their post, including some they might once have gotten for free.

Some digital agency bosses think Facebook may also start selling adverts on third party sites like Google's AdSense model.

According to the paper, getting advertisers to pay is a critical challenge for Facebook as it becomes an online media company. In its IPO documents, Facebook reported 3.71 billion dollars in revenues in 2011, mostly from advertising. (ANI)