Facebook has increased the number of ads displayed in many areas of the site from three to four. In some cases the fourth ad is partially or completely below the fold of the page, meaning Facebook now serves ad impressions users might not necessarily see. This change could reduce ad click-through rates but it will also allow advertisers to access Facebook’s most valuable demographics more often. It will likely help grow Facebook’s revenue, which we previously reported would reach $1.1 billion in 2010.
By displaying more ads on each page, it’s harder for users to pay attention to each ad. But to help show the lift provided by social context information that Facebook can provide alongside ads, Facebook has recently begun providing social context metrics for ads showing the Likes of friends, and has launched a new ad unit for applications. Facebook also recently started showing domain names for ads that point off-site.
For users without especially large screens or low screen resolutions, the fourth ad on many Facebook pages won’t be fully visible unless they scroll down. This is most often true on areas of the site such as photos which display modules such as People You May Know, event invitations, or Photo Memories above the ads.
Advertisers may benefit from the increase in ad inventory available for highly sought after demographics, such as those in the United States and United Kingdom, or specific company employees. However, since most advertisers pay for clicks, not impressions, this change shouldn’t lead to drastic changes in bid prices.
Users will now see four ads in the right sidebar of the following areas of the site: personal profiles, official Pages, community Pages, applications, the photos home page, albums, photos, apps, the events homepage, the groups home page, groups, the notes home page, notes, messages, the friends home page, the applications directory, links, Invite Your Friends, and notifications. Facebook’s home page and the news feed show one ad. Areas of the site without ads include: events, requests, Questions, Impact, Find Your Friends, the Games dashboard, the Applications dashboard, account settings, and privacy settings, and the profile editor.
Facebook has been steadily increasing the revenue it brings in from advertising. We’ve estimated that Facebook’s performance advertising revenue alone eclipsed $350 million last year, and should show very strong growth this year.
Thanks to Mike Webb from social game developer iwi.com for the tip.