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Facebook's upcoming IPO will likely go down as the richest technology IPO ever - but that doesn't mean that the company's continued success is guaranteed.

In fact, the world's largest social network may miss its Q1 revenue target.

That's according to Sam Hamadeh, the CEO of PrivCo, a company which bills itself as the "private company financial data authority." Hamadeh's sources "close to" Facebook indicate that the company is "behind its projections for ad revenue for the first quarter."

Obviously, information from unnamed sources should be taken with a grain of salt, and it's easy to sensationalise matters like this without having appropriate details, like how far behind its projections Facebook is.

That said, there is little doubt that the world's largest social network will face increased pressure to monetize once it's a publicly-traded entity. With user growth slowing, it will no longer be able to grow revenue as easily. That will not only push the company to monetize in currently unmonetised areas, like mobile ads, it may also logically push Facebook to serve more ads, and more aggressive ads.

On that note, PrivCo has obtained leaked documents from Facebook which detail a new ad offering, "Premium Ads", which will supposedly replace Facebook's existing premium ads offering:

Facebook's not yet publicized new "Premium Ads" product will have a larger format and more intrusive placement and distracting features that will appear on users' profiles. In addition to a much larger size than current ads, advertisers will be allowed to add distractions such as video and sound to what were previously text ads. In the leaked documents to ad agencies, Facebook touts that the new formats should hopefully increase "engagement by 40%", with an "80% increased likelihood to be remembered," without citing any supporting data.

Needless to say, if and when this comes to pass, the Facebook experience could radically change for many users. And not in a good way.

The big question, of course, is whether or not more ads, and more annoying ads, will drive Facebook users to change their behaviors (read: use Facebook less). On this front, it's worth noting that Facebook users are reportedly 'unfriending' at a more rapid pace. That's not only potentially worrisome for Facebook because of the implications for the size of the company's 'social graph', but also for the new models of advertising Facebook has been trying to pioneer which promise viral distribution of ad messages through that social graph.

At the end of the day, Facebook shouldn't assume that because it has a high level of lock-in, its users will go along with whatever changes it makes. Yes, they have put up with a seemingly countless number of privacy gaffes, but a more in-your-face approach to advertising could be the straw that breaks the camel's back.

Patricio Robles

Published 27 February, 2012 by Patricio Robles

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

2378 more posts from this author

Comments (3)

Neale Gilhooley

Neale Gilhooley, MD at Evolution Design

At what point will the Golden Goose scream murder?

The joy of Facebook was the feeling of being in an Ad free zone. Soon it will be an environment full of screaming mouse over banners ads and self starting video footage that take over your screen when you, beyond the users control. If Facebook don't respect their customers then I foresee another MSN mess and users taking flight, chased out by intrusive advertisers.

Plus Facebook will get blocked from more companies servers to keep employees attention on their work.

over 4 years ago

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Alec Saiko, Marketing Consultant at Aviva

@Neale Or more people will simply learn to block its ad-serving sub-domain/URLs. Browsers like Opera make this a breeze.

The truth is, people do like (or at least don't mind) a small portion of targeted ads. What Facebook is also trying to do is to find a critical mass of ads fill on a page that the majority of its users would still tolerate and stay just below that.

over 4 years ago

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Brijesh

hi i m brijesh from kerala (india).
i hate the ads on my profile dest.. right side called. " meet a bored House Wife" an all...
i really very hanger when i see that kind of ads on my profile side or in this site.. so can u suggest me any thing to stop that kind of all ads.
plz...
thank u

over 3 years ago

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