In a recent interview with TechCrunch, Facebook Ads Product Director Gokul Rajaram revealed how Facebook is planning to increase advertising revenue in the near future. Facebook, who currently earns most of its approximately $4 billion in annual revenue from advertising, is now running Social Ads on the majority of Facebook page views. When asked about the future of Facebook advertising, Rajaram said:
“Our hope is that almost every ad on Facebook at some point a few years down the road will be a Social Ad or a Sponsored Story.”
In the same interview, Rajaram told TechCrunch that Facebook Social Ads cause people to be 68% more likely to remember the ad and increase the likelihood of an individual buying a product by 400% when compared to standard display methods!
Sponsored Stories enable advertisers to promote word-of-mouth recommendations and brand interactions that already exist organically in the Facebook News Feed. For example, if someone’s friend “likes” a brand, that individual’s friends will now see this in both their News Feed and on the right-hand side.
Rajaram also told TechCrunch, “Facebook Ads are essentially based on the premise that people want to discover what their friends are doing.” Social Ads essentially allow your friends and acquaintances to share a brand’s story based on their experience with that brand.
Facebook, who has the largest social graph and resulting dataset in the world, is pitching the personal nature of Social Ads as the primary advantage over the competition. People are more likely to become customers of a brand based on a friend’s interaction with that brand than on the basis of brand exposure through traditional marketing.
If Facebook can continue to leverage the social aspect of advertising and improve the Social Ad platform, Facebook revenues will most likely continue to grow exponentially.