Facebook revamps ad units with extended distribution program

New York—Facebook Inc. has changed the way it serves up ads to fans, dubbing commercial messages “stories” and offering an upgraded option to automatically extend the distribution of those ads for a greater number of impressions.

Unveiled Wednesday at the Facebook Marketing Conference held at the American Museum of Natural History here, the new Premium on Facebook advertising option uses what Facebook calls “Reach Generator” to extend the distribution of companies' ads across several places on fans' Facebook sites, including in their news feeds, right-hand columns, on mobile devices and on log-out pages.

The new approach has been used in beta form by American Express Co., Kia Motors and Wal-Mart Stores, according to Facebook.

Mike Hoefflinger, Facebook director-global business marketing, said the new approach is intended to boost impressions.

“Today, only 16% of a company's fans, on average, see these ads,” Hoefflinger said. “But Reach Generator will enable a company to reach 75% of its fans.”

Most elements of the program are already available to advertisers, but ad placement on log-out pages will be available in April.

Extending the reach of brand ads to mobile devices is a first for Facebook, which has 425 million mobile users but previously had no means of gaining ad revenue from that traffic.

Premium on Facebook will be priced based on the number of fans a company has. Advertisers will no longer be charged individually for additional placements, as before.

In calling ads “stories,” Facebook is stressing creative best practices, whereby companies might embed videos, photos, event announcements and other nontraditional ad messages, so users respond positively and are not irritated by numerous iterations of a single ad.

In addition to the new premium ad units, Facebook also introduced the Timeline format for business pages, first available to individuals in December.