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Facebook outlines new advertising options

Facebook launches new online advertising service

Facebook, the social networking site valued at $15 billion, has unveiled Facebook Ads, an innovative and largely viral-based advertisement system that businesses can use to connect with users around the world.

Unlike the banner ad side of Facebook's commercial operation - acquired on a global basis recently by Microsoft - Facebook Ads is based upon individual business pages and automated, trusted user referrals.

"Facebook Ads represents a completely new way of advertising online," Facebook founder Mark Zuckerberg told an audience of marketing and advertising executives in New York. "For the last hundred years media has been pushed out to people, but now marketers are going to be a part of the conversation. And they're going to do this by using the social graph in the same way our users do."

Facebook Ads comprises three elements: Facebook Pages, Social Ads and Facebook Insights.

Firstly, Facebook pages for businesses let users interact and affiliate with firms and non-commercial organisations in the same way that they interact with other Facebook user profiles.

Businesses begin with a blank page and simply add the information and content they want, including photos, videos, music and Facebook Platform applications. (Outside developers have also already created a range of apps to enhance Facebook Pages, such as booking reservations or providing restaurant review pages.)

Facebook refers to the potential brand building route available to businesses through such pages as the ‘social graph'. Users can become a fan of a business and share information about it with their friends; effectively this acts as a trusted referral. Should such a user interact directly with a business through its Facebook Page by adding a review say, writing on the business' Wall or uploading photos, then these actions might appear in that users' Mini-Feed and News Feed, potentially also then pushing a firm's branding message onto their friends' homepages (via their respective news feeds).

In effect, in this way an advertiser's message can be communicated by Facebook users rather than the business itself.

"The core of every user's experience on Facebook is their page and that's where businesses are going to start as well," explained Zuckerberg. "The first thing businesses can do is design a page to craft the exact experience they want people to see."

Secondly, comes an ad system that is able - if required - to link into such business pages. Designed to facilitate the spread of brand messages virally and called ‘Facebook Social Ads', this approach combines the social actions of Facebook friends - such as the purchase of a product or the review of a restaurant - with an advertiser's message.

Such social ads can appear either within a user's News Feed as sponsored content, or in the ad space along the left side of the site. For example, if a user signs up as a ‘fan' of an advertiser group on Facebook - be it a manufacturer of high-end hi-fi units or a trainer brand - their name will automatically run alongside ‘Social Ads' for that brand in their friends' profiles. According to Mark Zuckerberg however, no individual user will be linked to any more than two social ads per day.

The idea is that social ads enable advertisers to deliver more tailored and relevant ads to Facebook users, including information from their friends, which they can use to make informed decisions.

Thirdly, all Facebook Ads customers gain free access to valuable market data - analytical info called Facebook Insights.

Accessible via an online interface, these metrics detail a marketer's activities, fan demographics, ad performance info and details of user trends that might better help a firm improve its content and adjust its ad targeting.

Speaking at the launch of Facebook Ads, staff from research house Forrester Research predicted that possible user backlash - about driving and receiving ads themselves - should not be much of an issue, due to the fact that users are effectively determining what companies they are linked to.

As Analyst Jeremiah Owyang explained it: "(User) backlash should be low for a few reasons. One, only two Social Ads display per day, and two, since users have become fans of a brand (opt in) they personally endorse, they ask for it."

Sarah Chubb, the president of Conde Nast's CondeNet Web division, agreed by saying, "Our sites are based on very vertical categories of interest like food and travel. Because those are sort of the things that people like to badge themselves with and share on Facebook anyway, we think that we don't run much risk."

Owyang added that, as noted above, "It's my understanding that Microsoft will continue to do what they do well - sell banner advertising and visual banners on Facebook."

Facebook's executive team also announced a program that will allow its users to share on Facebook what they do on other websites. 44 sites are participating in ‘Facebook Beacon' so far, including eBay, CollegeHumor and Travelocity. Facebook's big ad launch follows Google's announcement earlier in the week of Open Social, a set of application programming interfaces (APIs) that will allow web developers to create applications for a variety of social networks, rather than having to learn a different markup language for each new social networking platform.