Tuesday, May 10, 2011

Facebook's Next Economic Move?

Facebook will begin paying users 10 cents if they will watch certain ads. Users will be paid in “Facebook Credits” which will yield about 10 cents per ad. The Facebook credits can be redeemed to purchase goods on Facebook Deals. Facebook Deals is a program similar to Groupon. It is hard to determine whether or not this will be enough of an initiative to motivate users to view ads. Watching an ad can take a long time and 10 cents is not very much money. Although these ads are time consuming Dan Greenberg, CEO of Sharethrough, (the company making these ads), claims that the ads will be more than entertaining. So maybe the entertainment factor will be more of an incentive for users to be motivated to watch these ads. If the popularity of these ads increase the products being advertised will also increase in demand. This is a smart move made by Facebook because they will recieve a lot of revenue from the ad company because the ad company must pay Facebook in order for them to show their ads. It is too early to determine how smart of a move it was for the Sharethrough to pay Facebook to show their ads. The success of their ads will be determined based on whether the entertainment supplied by these ads and 10 cent yield will be enough of an initiative for Facebook users to want to watch the ads. If this new innovative ad idea has a successful outcome, (sucessful, meaning many people watch the ads) than it will be extremely beneficial for the company. If ads offer a good enough initiative for people than the products being advertised will increase in demand dramatically. Since Facebook is such a highly populated website, when the popularity of the ad increases the demand for the product advertised will be extremely wide spread.

4 comments:

  1. This article is very interesting, and poses a few questions. For example, could people take advantage of this opporitunity by watching more than one ad at once? If so, this could be a problem. Is it possible to watch more than one ad in the first place? I'm not one with a facebook account, so I don't know how it works exactly, but, being a little cynical, I can't help but wondering if this idea could be taken advantage of by greedy individuals . . . But back on the subject of the article, I think that this writer has brought up something both thought-invoking and informative, a topic I'm interested to find out more about . . . Thank you for creating such an interesting blog.

    SterlingH

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  2. This could potentially be a bad idea for facebook. What if users don't buy into watching advertisements? Companies could see how little attention facebook users look into ads and pull their advertisement investments all together. Even if its on a per click fee basis all of the advertisement fees that go into making a comercial could be seen as a waste.

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  3. This is a very interesting post. I like this idea a lot. It has a lot of potential. About 41.6% of Americans have a Facebook account, at least a couple million people will be watching these and if they are really entertaining then it will stay with the viewer and might buy the product. This is a great idea for both Facebook users, Facebook, and Sharethrough.

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  4. Despite the fact that users will only be given the Facebook equivalent of ten cents per view of each ad, some people see it as a gain. If you're on facebook, you probably don't have anything to do anyways (or you do and you're avoiding doing it), so why not watch a couple of advertisements if you get something in return? The only thing you have to lose is a little bit of time, which is worth more to some than others. This is a smart move for Facebook, in my opinion. It doesn't mean that EVERYONE is going to watch these ads, but more people are going to watch them than before because they're gaining something from it.

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