For several years, Facebook has held f8, a developer's conference designed to generate enthusiasm about the social networking platform. Now, with fMC, Facebook has made an equal show of commitment to the advertising community with a marketing first event. Beyond catering to the Madison Avenue crowd, the event was used to announce the biggest ad platform shift for the social network to-date.

In a series of meetings prior to the event, GroupM was provided access to the pending changes in order to better place the ad ecosystem changes into context for brands. The company's advancements will reshape the way brands interact with the platform, publish content and buy media.

Facebook's Ad Ecosystem is now comprised of three segments most impacted by the shift of Sponsored Stories moving into News Feed:

  • Marketplace Ads – NO CHANGE
    • These will remain crafted, targeted ads, not pulling content from page posts, and is good for brands acquiring new fans.
  • Reach Generator - NEW
    • This new ad program is always on. Its reach is limited to fans of a brand's page. To Facebook, this has the flavor of a loyalty program for advertisers.
  • Premium - ALTERED
    • Changes to the Premium platform give brands a new package of ads and sponsored stories. It is good for campaigns with flight dates, awareness and offers. Premium will give brands the ability to target fans, friends of fans, and non-fans.

(NOTE: More details on these segments can be found in the complimentary document: Facebook Ad Ecosystem Explained)

The structuring of its new ad platform is the notable shift from Facebook in its effort to monetize the social network by way of ad delivery that compliments user habits and experience. Four key themes emerged that are critical for brands that interact with Facebook: mobile, targeting, content and loyalty.

Mobile

Mobile is the biggest story here for Facebook. To-date, Facebook hasn't had ad inventory on mobile because mobile real estate has been limited to the News Feed. Now that sponsored stories are moving into News Feed, Facebook will open up an enormous amount of ad inventory across its 425 million and growing mobile users. With more than 50% of users accessing Facebook via mobile and 57% of sharing taking place on mobile devices, the monetization impact is significant.

Targeting

Previously, brands could only earn broader News Feed distribution by delivering quality content that frequently drove high levels of engagement. Even the best-managed brands on Facebook are not achieving high percentages of reach amongst their fans, and Page Post reach, on average, is down to approximately 16%. Reach Generator will instantly allow you to guarantee 75% reach per month. This has a variety of implications. Brands will have to deploy specific strategies when buying fan reach because they will be likely hitting a less-engaged fan. Brands should anticipate content decay, unlikes and 'hides' to increase initially because the algorithm isn't doing the job for them anymore.

For brands that build a sizable following via fan acquisition campaigns utilizing contests and incentives, Reach Generator may prove an enabler for future engagement. Historically, fans acquired in this manner created an overall lower interaction rate ratio and actually drove reach percentage down. Now that brands can guarantee reach and can buy Sponsored Stories to get in front of fans and friends of fans, those vacant 'likes' have new-found value and will extend the reach of the brand's network.

Content

The new Sponsored Stories and Reach Generator seriously blur the lines between paid, earned and owned on the platform. Brands will no longer develop ads, they will produce content. If done correctly, brands just may achieve the coveted objective of Word of Mouth at scale through better user experience.

The value of the community manager and production resources who know how to develop and populate a superior content calendar will be on the rise.

Loyalty

Timeline gives brands broader opportunity, but potentially a lot more upfront work. Some brands will want to publish a detailed history of their company with milestones and events. Timeline will also force brands to address things like PR crises that have played out on their Page.

Timeline will also affect tabs and apps brands currently host on their page. They will be even further veiled in the favorites section and brands should consider using a 'verb' to hit a user's ticker or News Feed like Spotify, The Washington Post and Pinterest have done.

The cost of being social

Facebook has the potential to flood the market with its new supply of ad inventory. It will be interesting to see whether this drives prices down or if these highly-'social' units, otherwise known as content, delivers on the anticipated increased levels of engagement and ROI, which would keep demand and prices up. Also worth monitoring will be the cost-per-fan (CPF) pricing model associated with Reach Generator.

Putting the new Ecosystem to work for a brand

Now that these ad platform enhancements have been formally announced, brands need to mobilize in the following ways over the next 30 days to be ready for the public launch.

  • Get your Timeline in order. (Brands can opt in immediately.)
  • Develop a reputation management strategy for your Timeline as users add milestones. Community managers will be spending more time managing Timeline.
  • Re-evaluate media budget for the year because new ads are Premium only and some are sold in three-month increments.
  • Determine how to modify existing apps to integrate actions into News Feed (if applicable).
  • Mobility is a central piece of the changes for Facebook. Prepare your content and media strategy to match that effort with targeted messaging.

Facebook is soon to be a public company and has shown the maturity of one by dramatically advancing its efforts in the marketing arena with brands. The integration of Timeline for brands and the reach and Sponsored Story vehicle evolutions are significant opportunities that all brands must assess and be ready to make decisions to act on in the near-term.

Todd Steinman is CEO of M80. He can be reached at todd@m80.com.

Read all Todd's MediaBizBloggers commentaries at Musings from GroupM.

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