Facebook Begins Testing Ads on Applications

In a new twist of events Facebook has decided to begin running test ads with Facebook applications. An announcement is expected on the Facebook developer blog in the next 20 minutes. David Swain of Facebook says that its running only a few small tests, but as an ad network running on Facebook this would certainly draw my attention. Currently there are few details on the types of ads being displayed but I can only assume that they are similar to Facebook's existing ads. In the halls of industry conferences, the idea of Facebook filling application ad inventory is something that has always been discussed. The tests currently being run by Facebook are taking place in partnerships with developers that have applications on Facebook's platform. The premise being the offering of monetization options for developers, it seems that running ads through some of the most engaging applications on Facebook would benefit the social network as well. This is particularly important given Facebook's ongoing shifts of its existing ad placement, as it seeks to optimize the ads already displayed on the site as well as the type of ads that are running through the network. The holiday season even brought about some promising partnerships for advertising through virtual gifting. Though this isn't necessarily the same as display ads, the fact that Facebook is continuing to experiment with ads could be a considerably big deal. The other aspect to consider is how developers and ad networks that are already monetizing their Facebook applications will feel about Facebook extending direct ads to developers. A number of ad networks have built real businesses around placing targeted ads within Facebook applications, and may ultimately see a drop in inventory and/or revenue if Facebook decides to run with direct ads sales on applications. As Facebook is merely testing ads with a select group of partners, there's little we can conclude in regards to Facebook's testing phase, or even if Facebook's ads will merely be an option for developers in addition to existing ad networks that run on Facebook apps. We have few other details at the moment but I would expect more details to be revealed in a short amount of time. If you happen to see any of the test ads running please forward us the details! How do you think this will effect the Facebook platform economy?

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Facebook Begins Testing Ads on Applications

Nick O'Neill

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Nick O'Neill