Facebook Redesign Allows Bigger Ads… And More Revenue?

The Facebook redesign announced on Thursday will display larger photographs and advertisements and new types of news feed. Those people whose jobs depend on the social media giant hope it also means more revenue.

Facebook is under pressure to show that it is moving with its users onto cell phones and tablets, and the redesign is aimed largely at displaying well on these mobile devices.

This Tweet from Mashable shows that Facebook will display similarly on large and small screens in the new design:

“I think it’s a real smart move on Facebook’s part,” said Dan Wilkerson, social media project manager at LunaMetrics advertising firm. “There are so many users who are migrating to mobile only.”

The design is also a nod toward the increasing use of photos on Facebook.

The update will allow users to subscribe to news from businesses they are following, giving the businesses more control over what these users see.

The redesign is rolling out gradually, though you can put yourself on a waiting list to get it sooner rather than later.

Company executives did not respond directly to questions about how the redesign might appeal to advertisers, the The New York Times reports, but the company is working hard to attract advertising without alienating users.

The pressures are acute, given Facebook’s still anemic performance on Wall Street. It came out of the box last May with an extraordinarily high valuation of $38 a share, which slumped to half last fall, and has remained for the most part under $30.

The company is losing younger users to more visually oriented competitors such as Tumblr and Pinterest, adds initial public offering (IPO) analyst Sam Hamadeh, CEO of PrivCo.

“The new re-design helps make Facebook for visual and hopes to help address this trend and stop it before it becomes irreversible,” he said in an email.

Users’ migration to mobile has created problems for Facebook because smaller screens leave less space for ads. On a desktop screen, most ads appear on the right-hand column. On a smartphone, there is no right-hand column.

Advertisers have had some access to the users’ news stream. They could not buy advertising that appeared there, but if you or one of your friends have “liked” a business, updates from the business could appear in your news feed.

Even then, the parameters of the news feed meant that only small photos or videos could appear, limiting the hooks that might lure users to click on links. In the new design, these images can be larger.

Changes to Facebook’s news feed will make a big difference to advertisers, as well, said Wilkerson. Facebook announced these four new categories of news feed:

- All Friends – a feed that shows you everything your friends are sharing - Photos – a feed with nothing but photos from your friends and the Pages you like - Music – a feed with posts about the music you listen to - Following – a feed with the latest news from the Pages you like and the people you follow.

This last category, “Following” will appeal to advertisers, said Wilkerson. That’s because Facebook currently uses an algorithm to determine the order in which updates appear in your regular news feed.

Even if you have “liked” Acme Manure Company, its hot announcement about new fertilizer bags might get buried under your best friend’s announcement about her engagement, or your uncle’s update about the illness of his cat.

In the new design, when you visit your “Following” news feed, updates will display in chronological order, so the fertilizer bag announcement will be right on the top until something newer comes along.

The change also comes with a downside for advertisers though, as TechCrunch reports:

On the flip side, there are now areas of Facebook where no Pages or public figures can show up. The Friends-Only feed could specifically be problematic for businesses.

Under the new arrangement, Acme Manure’s announcements won’t appear in the Friends-Only feed unless it is your friend.

But on balance, investors seem to think the move is a good one. The stock closed up 4 percent at $28.57 a share.

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