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Facebook Begins Reducing Number Of Ads: Boosts Price, Performance

July 24, 2014

by Joe Mandese

LOS ANGELES -- In a move that is reminiscent of AOL’s “Project Devil” initiative a couple of years ago, Facebook is embarking on a push to reduce the overall ad clutter and boost the performance -- and price -- of its advertising.

The initiative, which was disclosed by Drew Huening, associate director-social channel at Publicis’ VivaKi during the closing panel at OMMA RTB here, involves reducing the number of ad units available from six “smallish” ads to two “larger” ads on a user’s page.

“Very preliminary numbers show how that radical change in inventory is playing out,” Huening said, sharing some proprietary VivaKi data indicating very positive results, reducing clutter, improving clickthroughs and boosting the price per ad sold by Facebook.

Specifically, Huening said total ad inventory exposed to Facebook users has been reduced “by a third” and the CPMs charged by Facebook have jumped “two times to four times” what they had been previously.

“None of this is very surprising,” Huening said, adding that likely was because Facebook is “very carefully controlling how this rolls out.”

Then again, the initiative is not without precedent. AOL chief Tim Armstrong embarked on a similar ad clutter reduction/value increasing initiative in 2011. The so-called Project Devil began when the AOL team began adding up the amount of ads -- and the amount of space those ads took up on the user’s screen -- and deduced that reducing the number would create a better user experience, greater engagement and more value to advertisers.

Source

"Facebook Begins Reducing Number Of Ads: Boosts Price, Performance." MediaPost, 07/24/14.

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