According to a recent TechCrunch article, Facebook has begun testing a new type of advertisement called “Sponsored Results” ads. The new advertising option, which displays ads within the Facebook search typeahead, allows competitors to target Facebook users from other related businesses.
Josh Constine, a technology journalist for TechCrunch, wrote the following about Facebook’s new feature:
“The Sponsored Results will look just like organic results in the typeahead search box atop every page, except for being marked with a tiny word “Sponsored.” Facebook tells me they’ll be sold on a cost-per-click basis, can be targeted to people searching for any Page, app, Place, (and possibly event) without that business’ permission, and the tests begin tonight.”
Although the costs incurred will be based on CPC, the targeting methodology will be quite different from other popular PPC interfaces. Instead of bidding for keywords or phrases, which is the normal method for search marketers, Facebook search marketing will be based on bidding against specific pages, apps, and places. In addition, the ads will only appear in the typeahead area of Facebook search and not on the results page (yet).
Facebook, which is set to announce quarterly earnings next Thursday, has been under intense scrutiny from both investors and stock analysts. Due to concerns regarding Facebook’s inability to monetize mobile users and the lackluster growth in saturated markets, Facebook stock is currently selling at approximately $29 per share. Although Facebook has increased ad engagement by 11% over the past year, the social network is now influenced by the market’s demands for faster revenue growth, and this new advertising option may reduce investors’ anxiety over the new stock’s lackluster performance.
Do you feel that this new type of advertising will negatively impact the Facebook experience? How long do you think it will take Facebook to include “Sponsored Results” within the Facebook search results?