by Philip Lop

Created on: February 23, 2012   Last Updated: February 24, 2012

According to leaked documents that have been shared on the technology website Gigaom, Facebook is set to announce plans to upgrade its premium advertising product.

Images from the leaked Facebook presentation demonstrate the improvements that Facebook intends to make. The new ads will comprise a larger format, which offers advertisers “more points of engagement for users.” The advertising will also feature “enhanced, more prominent placement of social context (friends)”.

So what does that mean for brands? In simple terms, the new adverts offer the sort of capability that allows advertisers to do anything within an advert that they can do now within a page. Think of the new premium ad as a micro version of a brand page, appearing within the page of fans and followers. The ads can now include photos, videos, questions, status updates, links or events, exactly as they might appear on the page. The overall aim is to increase the penetration of your ads, amidst an increasingly competitive environment.

Facebook has tested the concept and is to accompany the announcement with some big numbers. Facebook claims that the new adverts will see a 40% rise in engagement and will be 80% more likely to be remembered. It doesn’t, therefore, take a genius to work out why Facebook is making this move.

According to Mashable, Facebook’s advertising revenue was $1.86 billion in 2010. A year later and Bloomberg reported that the number for 2011 was set to generate £3.8 billion – more than double the figure of the previous year. The enhanced product offering made through premium advertising can only swell those figures further and 2012 looks set to be another bumper year for advertising income for the site. What’s more remarkable is that the business is able to do this with an asset donated free of charge by its users – data. The boost from this income will coincide well with the aspirations of investors, with Facebook looking set to go public from May.

The premium advertising format also lends itself very well to the targeted/social advertising model. Facebook remains keen to ensure that advertising is appropriate throughout the site, and premium advertising of this nature helps brands connect in increasingly relevant ways with their followers and those that may not yet have discovered them on Facebook. Many brands and businesses will be salivating at the prospect of more effective advertising on the site, given that the return on investment for advertising through Facebook is already healthy.

Image: The Telegraph

Learn more about this author, Philip Lop.
Click here to send this author comments or questions.