Why Facebook Likes Small Ads, Despite the Small Dollars

I found an article in the New York Times called "Why Facebook Likes Small Ads, Despite the Small Dollars." The author is Saul Hansell.

This article talks about an ad on the front of both Facebook and MySpace promoting the Fox movie "The Day the Earth Stood Still." However, Facebook and MySpace have displayed the same ad differently.

On MySpace, the ad filled the entire page. When you clicked on it, you go automatically to the movie's web site. On the other hand, the ad on Facebook was a tiny rectangle in the right-hand column of its home page. Wheh you clicked on it, you will see a tiny trailer for the film.

When it comes to adversiting, Facebook is thinking small. This happens because small ads give them small revenue, especially compared to MySpace. Facebook is not making much money from advertising becaue of its size. Moreover, marketers don't seem to be all that excited about what it is offering them.

Many people like Facebook's approach to ads because it tries to use user feedback on the kind of ads you want to be displayed. However, this approach is not helping Facebook for economic growth. For this reason, Facebook has introduced a product called "social ads" that shows users the name and photo of one of their friends who uses or likes a given product. This method is to find out which products its users like.

Management plays an important role in this situation because the major goal for any company is to increase profits. Facebook is using technology for their advertisemnets. The "social ad" method helps them to know what to advertise. Technology is now helping Facebook to desing new methods to adverstise products to specific people.