Have you noticed that your Facebook news feed is increasingly clogged with more ads? Earlier the ads were only available on the right-hand column, since the past year Facebook has started inserting ads in the middle of status updates and pictures shared by your friend circle. How valuable is it for the advertisers and are people already getting fatigued by them?
Facebook ad revenue was boosted to $1.6 billion, which is a 61% increase compared to the same quarter last year. Mobile ads have also increased considerably.
It’s a general consensus among social media companies and marketers that these newsfeed ads have outperformed those shown earlier in the right column. Adobe has done a detailed analysis of the 150 billion ad impressions of 50 advertisers worldwide on the Facebook platform. It found that the click-through rate or the CTR on their newsfeed ads were many times more effective than the ones on the right column on mobile devices. Comparatively, on the desktop this figure is 14 times higher than the right side ads. Thus Facebook COO Sheryl Sandberg is justified cleaning that there is a healthy and growing demand from the advertisers for the newsfeed ads and that demand for these advertisements continue to grow.
On the contrary, Spruce Media, a Facebook marketing company, found that though CTR rates have increased, user engagement with newsfeed ads have declined substantially. People are no longer interacting with these ads as likes, comments and shares are all down considerably. This may be because the novelty effect of the new ads are gone and people are becoming immune to these newsfeed ads.
In fact within the last year the number of ads shown by Facebook on the newsfeed has increased from 0% to 5%. But Facebook is restricting advertisers from placing too many ads inuser newsfeeds in one day, but there is a sense that people are increasingly blocking out the ads. In fact, people on desktops and mobile phones see 62 percent and 66 percent lower ads respectively than ads on the right-hand side.
However company exuecutives have expressed their confidence that newsfeed ads will continue to remain a major source of revenue for the rest of the year and is a great long-term opportunity for the company if they can improve the quality and nature of these ads.