The Year in Facebook Advertising 2012

This year Facebook made major strides with its advertising business. Rather than working on a single ads solution for the broadest possible audience, the company is now focused on building more specialized products for brands, direct response marketers, small businesses and developers.

As a result, Facebook’s developments in advertising this year span the spectrum from the Promote button, which makes it simpler for any page owner to boost the reach of their content, to a partnership with Datalogix to help its largest clients understand how well their ads converted to offline sales.

It was the year ads came back to the News Feed and started to appear on mobile. The fledgling Facebook Exchange is already proving to be lucrative, and the social network introduced a number of other new ad types and targeting opportunities that marketers will start to better understand and employ in 2013.

Here’s a rundown of major advertising-related innovations and changes Facebook made this year.

News Feed and Mobile Ads

News Feed ads, starting with Sponsored Stories, launched in January. These same ad types came to the mobile feed in March, and over time, the social network began allowing page post units and other non-social ads. Facebook previously allowed feed-based ads in 2007 but it had never shown ads on mobile devices until this year. Now, the social network is earning $4 million a day from News Feed ads, with three-fourths of that from the mobile feed.

Facebook Exchange

In June, Facebook announced its Facebook Exchange, an advertising system that allows third-party platforms to place retargeting ads on the social network after users visit external websites marked with cookies. FBX came out of beta in September, but only a limited number of partners have access to the exchange. Retargeting data cannot yet be combined with Facebook’s demographic and psychographic targeting options — nor can it be used for social ads like Sponsored Stories or page post ads in News Feed, but many expect these will become features of FBX in the future.

Custom Audiences

Facebook’s Custom Audiences feature enables advertisers to use their CRM data and apply it to social advertising. Advertisers can use Power Editor or the Ads API to upload files of email addresses, phone numbers or user IDs, which Facebook will hash and then match with its own hashed database. Ads can be targeted to the matches. With this type of targeting, companies can reach the people who are most likely to respond to their Facebook ads: those who have already connected with them in other channels. Advertisers can layer on demographic, interest or other targeting options to serve more relevant messages to different groups within their databases.

Promoted Posts

Facebook began testing Promoted Posts in April as a way for page owners to reach more of their fans and friends of fans through News Feed posts without having to create campaigns in the main ad dashboard. Instead, page owners can click the Promote button on their posts before or after they make them. This has since rolled out to most pages on the social network and replaced the Reach Generator program. Facebook has even made it possible to create Promoted Posts via mobile. Promoted Posts are the company’s first ad product for which this is available.

Offers

This year Facebook pages gained a new story type that allows page owners to post offers that users can collect from News Feed or ad units. Unlike check-in deals, which required users to first visit a physical location, offers can be redeemed in-store or online. Because they begin as a page post, offers can be turned into page post ads or Sponsored Stories. In fact, Facebook has begun requiring page owners to spend a minimum of $5 to post and promote an offer.

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