Facebook may have passed MySpace in terms of worldwide audience, but the social networking giant has struggled to sell ads as effectively as its competitor. Today, the Palo Alto company is unveiling
its latest ad format, called "engagement ads" which prompt a user to do something within the ad unit, such as post a comment about a product or RSVP to watch a TV show. Once a user engages with an ad,
a message would then be sent through the news feed to his or her friends list.
As the
Journal points out, Facebook has a lot to prove with the new format, which is being made
available to all of its advertisers after four months of testing. According to comScore, Facebook's share of U.S. online display spending was just 1.1% in June. By comparison, News Corp.'s Fox
Interactive Media unit, which includes MySpace, was the market leader in display spending with 15.9%.
Some marketers think spending on social networking sites is a waste of money. "I
haven't heard of anyone purchasing something off an ad on Facebook," says Angie Tulgetske, vice president of Re/Max Preferred Choice Properties, which resells timeshares. "I wouldn't think any of my
marketing dollars would be spent advantageously there." Re/Max spends thousands of dollars a month on search ads but avoids social-networking sites because results show that users are less likely to
notice ads on social networking sites than at other content destinations.
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