Ad-Challenged Facebook Cosies-Up to Agencies

12 November 2008

PALO ALTO, California: Like the alchemists of old, Facebook is struggling to transmute the base metal of its myriad social networkers into gold – or more prosaically, ad dollars.

Clientside marketers and their Madison Avenue acolytes have, it seems, yet to be convinced of the site's ability to sell.

In a bid to woo recalcitrant ad budgetholders, Facebook is rolling out a new format called 'engagement ads' that further obfuscates the line between marketing and social networking. 

When a surfer logs on to Facebook the alchemic ads appear on the main screen, exhorting them to follow suggestions within the ad; for example, comment on a movie trailer or RSVP for the season finale of a TV show.

Assuming the user completes the action, such as adding Bravo TV's Project Runway show to a personal list of events, Facebook tries to get Bravo's ad in front of more eyeballs by 'sharing' with the user's friends a notice about what he/she has done.

At the best of times marketers and agencies are notoriously difficult to woo – and these are not the best of times. 

Declares Angie Tulgetske, vp at RE/MAX Preferred Choice Properties, which resells timeshares and spends thousands of dollars a month on search ads: "I haven't heard of anyone purchasing something off an ad on Facebook. I wouldn't think any of my marketing dollars would be spent advantageously there."

Facebook's new format has been in pilot since August and went on offer to advertisers this month.

Meantime, its share of total number of US online display ad views is just 1.1%, according to comScor, while rival is market leader with 15.9% of display-ad expenditure.

Data sourced from Wall Street Journal Online; additional content by WARC staff