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The famed economist Milton Friedman once explained that there's no such thing as a free lunch. But for brand marketers using social media to reach consumers, it seemed like Friedman's rule was a thing of the past.

That's because many of the world's most popular social platforms offered a plethora of marketing tools for the princely sum of, well, nothing.

But the most popular social networks are in the business of making money, and for the largest, Facebook, making money is an even bigger focus thanks to Wall Street investors who have punished the company's stock since it went public earlier this year.

Evidence of Facebook's efforts to make money are not hard to find. This week, for instance, it announced a trial involving the use of its data for ad networks. And now Reuters is reporting that the company will soon start charging marketers for the use of its Offers feature.

According to Reuters' Alistair Barr and Alexei Oreskovic, "in coming weeks Facebook will require merchants to pay at least $5 on related ads to promote each Facebook Offer to a targeted audience of fans and friends of fans. The cost will vary based on the size of a company's Facebook pages."

Facebook executive Gokul Rajaram believes the new requirement will boost returns for brands making use of Offers. "The best results on Facebook Offers will come from organic distribution plus paid distribution," he stated.

No more free lunch: good for brands?

Rajaram's claim that organic distribution and paid distribution is more potent than organic distribution alone brands will want to confirm for themselves, but Facebook's monetization push could actually be beneficial for brands for another reason.

Right now, many brands are investing the greatest sums into the management of their Facebook Pages. When GM had its falling out with Facebook, for instance, it was revealed that the automaker was only spending $10m on paid Facebook ads but triple that on soft costs associated with its Facebook presence.

With Facebook now charging for Offers, brands which have been using Offers have a greater incentive to assess whether or not Offers are a productive (read: profitable) part of their Facebook strategy. This is something many of them were far less likely to do when no hard costs were associated with Offers.

And if more parts of the marketing toolkit Facebook provides to brands become paid in some fashion, brands will have a real opportunity to start thinking about their Facebook initiatives in ways that won't leave as much room for confusion, doubt and delusion. Whether that's good news for Facebook will depend, of course, on the ROI it can deliver.

Patricio Robles

Published 20 September, 2012 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

2391 more posts from this author

Comments (4)

Damian Hanson

Damian Hanson, CEO at One iota Limited

Facebook Offers has been pretty successful since launch with many SME businesses benefiting. It is only natural for ad serving models to accompany this going forward.

When we launched DealsJoy.com as a free Facebook centric 'local commerce' tool we wanted to help local businesses drive new custom. Our vision is to introduce premium features perhaps in the future which businesses will pay for if they see the value.

Paying at some stage for increased benefit is natural.

Best,
Damian

almost 4 years ago

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Jonny Rosemont, Managing Director at Rosemont Communications Limited

Daily Deals sites like Groupon certainly charge for their service, often making it nonsensical commercially.

It makes sense for Facebook to do the same, but businesses will need to test whether they can actually make money from it, or that it will simply be a brand awareness exercise at expense.

The audience potential on Facebook itself is probably argument enough.

almost 4 years ago

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Alan Charlesworth

Now that so many brands/products/organizations are committed to[or dependent on?] on a third-party website [facebook] - I wonder what else that site has in store for the future by way of charges?

almost 4 years ago

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Sneha

The first few years of the social media revolution have been a golden age of tech utilitarianism, where maximizing users’ delight was considered, quite literally, the only currency that mattered. In Part II of the revolution, the desir ...

almost 4 years ago

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