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FACEBOOK'S NEW
106 I FORBES DECEMBER 5.2011

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BY ROBERT D. HOF

DECEMBER 5.2011

FORBES I 107

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FACEBOOK

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acebook Chief Executive Mark Zuckerberg doesn't talk much about his company's advertising business, even when it invents new kinds of ads that could disrupt a chunk of the $500billion influence industry. So it was up to David Fischer, who left a star career at Google early last year to run Facebook's advertising business, to make a pilgrimage to the weeklong annual confab of marketers in New York in October. What he showed during his speech was something blandly dubbed "Expanded Premium Ad." It's simply a short post—"Rolling Stone calls Ides of March 'A big bmisingthriller'"—ti-ansformed into a right-hand-side ad that goes to a targeted audience. "Honestly, it doesn't look that interesting," Fischer conceded during his address. Then he described one small wrinkle: If yourfi4endJim has clicked the "Like" button back on Columbia Pictures' fan page, a line of text will pop into the ad saying "Jim Squires likes Ides ofMarch" alongside his photo. People ai-e twice aslikely to remember an ad if their friend is in it, according to the Nielsen Co., and they tend to click on it or share it with friends more often thiui they do plain-vanilla display ads. What's more, their intent to purchase rises fourfold when they see "social" ads like this. Twice the recall. More clicks. Quadruple the purchase intent More productsflyingoff the retail shelves. These are notuninteresting concepts to marketers. On the surface it's puzzling that Facebook feels the need to prove itself to Madison Avenue. With an audience of 800 million worldwide, the social network will double its ad sales this year, to $3.8 billion, according to eMarketer. But the way Fischer is pitching to advertisers, with a focus on the results and not the fiash, is very telling. If Facebook iseveryone else was and they didn't want to appear clueless. Fan campaigns aside, just 12% of marketers and agencies in a recent survey by the ad tech firm Collective thou^t social media such as Facebook works in an ad campaign. There's so much activity on Facebook that marketers aren't sure what correlates with common advertising gauges such as brand awareness and propensity to buy. Facebook fan count?Ad clicks? How many times people shared a post on a brand's Facebook page? "It's the bi^est question our clients ask: 'Is that a good number?"' says Sarah Hofstetter, who as senior vice president of emerging media and brand strategy at the digital ad agency 360i helps companies such as Coca-Cola and Kraft manage marketing on Facebook. To make its numbers Facebook is crunching them. Dozens of datageeks are hunkered down in a nondescript building nicknamed "1050" for its address on Page Mill Road in Palo Alto, Calif They're mining the 250 million photos shared and the 100 million likes per day. They're looking for clues as to which kinds of ads and other marketing work best on this new canvas—and how it all compares with other media. The overriding goal, says Brad Smallwood, Facebook'shead of measurement and insights: "We want marketers to know that when they invest in Facebook and in online in general, they're going to see measurable impact in the same way they know TV works." Social media offers tantalizing new possibilities for getdng consumers' attention in ways that are strikingly differentfi-omsearch and display ads, the two dominant forms of online advertising. Those olderforms are, to vaiying degrees, aimed at prompting immediate or near-term transactions, but the biggest ad spenders want to create a longterm affinity for their soap, cars or beer. Most products are still bought in physical stores well after the ad was served. That's why marketers still love TV, where they can tell their stories in a setting where people are relaxed and receptive. Television...