Facebook reveals it actively increased ad prices in Q4 2011
In its S-1 filing earlier today, Facebook revealed that it took steps to increase the reserve price in its advertising auction system, which increased the minimum bid for some advertisers.
[…] in the fourth quarter of 2011, we increased the reserve price (i.e., the minimum price threshold) in our advertising auction system in order to reduce the frequency with which low quality ads are displayed to users. This change caused a reduction in the overall number of ads shown and increased the average price per ad as a result of factors including the removal of ads with bids that were below the reserve price and some advertisers raising their bids in response to this change.
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