NEW YORK Facebook is betting that more engaging ad formats will help reverse the perception that advertising on social networks is foundering.
Mike Murphy, vp of media sales at Facebook, said that because of the performance of Google, the industry has been overly fixated on direct response advertising and delivering impressions and high click-through rates -- barometers that don't necessarily suit social networking environments.
"Over the last few years, Web advertising has been all about demand fulfillment," Murphy said. But he believes that Facebook users aren't necessarily seeking to execute tasks or fulfill specific demands, and by their nature are less inclined to click on ads that take them away from the site.
Without naming MySpace specifically, Murphy observed that other social networking sites have mostly run low-performance banner and text ads -- which he said adds to the perception that the category is struggling. "They're using old tactics and trying to make them work in social media," he said. "Those things obviously haven't worked."
What Facebook is hoping will work are three new advertising placements, dubbed Engagement Ads, each of which encourages users to interact with brands and share that interaction with their friends -- without requiring them to visit brands' profile pages or exit the site.
For example, users can befriend individual brands and also see which of their friends have done the same, within a single ad unit. Similarly, they can post comments alongside a brand's video ad and also read their friends' comments. (Facebook has been testing this tactic over the past few weeks for the movie Tropic Thunder.)
The idea, said Tim Kendall, Facebook's director of monetization, is to build "ad products that users can interact with in the same way they do with other things on our site."
6 months ago