Facebook hopes new ad scheme can engage users

Facebook has quietly launched a new type of advertisement it hopes will help in the struggle to find a way to help advertisers profit from the treasure trove of demographic and other data it has gathered from members of its social network.

The new, so-called "Engagement Advertisements" aim to encourage Facebook users to interact with ads by leaving comments or sharing virtual gifts with other members, said Jeremiah Owyang, an analyst at Forrester who was briefed on the new program. Facebook has not yet formally announced the new offering.

"To combat dismal click through rates of traditional advertisements, these features emulate widgets and encourage users to increase member adoption, viral growth and brand interaction," Owyang noted in a blog post today. However, he cautioned that the plan will succeed only if advertisers create content that puts community first, find new ways to interact with users and change the criteria for measuring success.

Early users of the new advertising technique will include Paramount Pictures, Adidas and General Mills, Owyang said.

The new program lets users leave comments associated with the ads much like they post comments to their friends' profiles. It also lets advertisers create virtual items for users to share with their friends. In addition, users can become "fans" of a product, thus triggering a notification to their network of Facebook friends.

Owyang did warn potential advertisers that, according to Forrester's research, younger users of social networks are not interested in using them to learn about new products. Instead, these users are interested in communicating and expressing themselves on Facebook-like sites.

"While costly, risky and foreign to brands, the biggest missed opportunity for brands in social networks is to become part of the community, interact and build real relationships," he went on to note. "Although we should expect interaction rates and viral spread to increase with engagement ads, brands should wait and see how these ads click through rates perform."