Because a stupid user clicks on that crap by mistake.

It is probably should already be obvious, that most of internet audience developed a habit of ignoring ads, same as TV audience did long ago, so the times of making money, like it was possible in times of debut of Google's ad-words are gone.

Almost no one clicks on an ad unless it is decorated as ordinary link, looking like a part of the site, which is plain cheating.

"Investors" who are waiting that FB will make profit on ads, well, let's say that they are naive.

I guess people also are making purchases and signing up by mistake after clicking on ads. Just because you ignore ads, doesn't mean others do same. FB is already making profit on ads.

Clicks and sign-ups, leave alone purchases, are very different things. FB sells clicks, but a user just hits "back" button. Eventually, there will be no demand for clicks, because even being very cheap and abundant, they will not create enough money.

Profit = revenue - cost. So, FB pays all its costs from selling ads? Since when?)

Mistaken clicks are probably part of it, but lots of people on Facebook are there to waste time anyway.

For me, the most interesting part is that these ads are interactive (users can Report them or Like them). Hopefully Facebook will learn from Google here, and make advertisers pay more to show shitty ads.

Ads masquerading as news get more attention? What an enormous surprise!

I always have to look twice, because sometimes they really look like friend's updates.

What I have started to do is to mark them as spam.

I'd expect regression to the mean to kick in after a few months and bring the effectiveness down to all the other types of advertising.

This should be obvious, but click volume is a bad thing if conversion rates are low. Your KPI is cost-per-conversion, not cost-per-click.

What about the quality of the clicks?

I read through the article pretty quickly, so forgive me if I missed something, but what qualifies as a click? Do "Likes" count as a click (for example)?

My somewhat limited knowledge of the world of Facebook advertising (got free $100 credit, ran campaign) would tell me yes, Likes do count as a click.

No, clicks are either click on the ad, directing the user to your site or click on the name of the ad Publisher (i.e. your Fan page). Likes and shares are different metrics

If you guys want to remove those ads from your newsfeeds, check out this javascript I wrote: http://programmerhrishi.blogspot.in/2013/05/get-rid-of-those...

I think the reason they cost less is because they are the only type of Facebook ads that are shown on mobile. I have a web app which doesn't work very well on phones and the only way to prevent my ads from being shown there is to disable News Feed ads completely.

Hard to believe. The reason why search related ads work well is because the search engine knows about the intent... You just entered it.

An ad on a news feed on the other hand is almost always something you don't want. The same goes for most ads on websites, they're likely something you do not want or something that does not align with your intend.

The new ads are "retargeted". You won't see one unless you've been to the advertisers website recently. That is where the "intent" comes from.

Seems reasonable to drive user to your site through SEM/SEO, then hammer home the message with one of these new FB add.

I wish those retargeted ads were smarter. They should reset the given "intent" after an action is taken.

Early this year, I bought a watch for my girlfriend as a surprise gift for our anniversary. I made the mistake of doing some prior research to find the best price... on her laptop! I bought the watch online, using the same computer, but the advertising software was incapable of recognizing this action and kept showing her exactly the same watch ads all over the Internet. Long story short, my gift was not a surprise anymore.

That happens to me all the time, I always look the best deal before buying something online, buy it, but then have to deal with ads that are not of my interest anymore for about an extra week. I guess is more cost effective for advertisers to show completely irrelevant ads even if the purchase already materialized, but it gets so annoying to the point of starting to dislike the brand a little bit more every time. At least in my case.

>I made the mistake of doing some prior research to find the best price...

Doing research to find the best price is never mistake. It sucks that your surprise is ruined. I dont know if advertisers can know if action is taken on other website. I guess you should delete cookies to "reset intent" or do research in private tab.

Not really. Have in mind these are retargeting ads. Lets say you visited Shop X and checked out different laptops on that website. Now you are on Facebook and there is post by Shop X in your feed featuring laptop you checked out on discount. Isn't that relevant to your interests? You already showed intent by visiting shop's website.

The problem with fb has never been CTR %, but volume. This is why they will never end up eating into search budgets, specifically with midsize e-commerce businesses (largest group of retargeting advertisers).

I will admit, I've had good success recently with some promoted posts from our FB page. It's anywhere from $5-50.

Much better than traditional FB ads, but that's not saying much.

It's too bad a "Facebook Premium, no ads included Edition" will never happen due to the fact that it wouldn't make as much money as the current model with invasive ads.

That is not necessarily true. They can easily calculate average worth of FB user (money that user brings them by clicking on ads) on yearly basis and set yearly membership fee above that number. Example: If average yearly worth of user is $5, they can charge $10 fee. Most of people that would sign up for premium would be users that dont click on ads anyway (their average worth is lower) so FB could earn more.

Is the only indication that it's sponsored the little "sponsored" tag in gray at the bottom? Or does it still say "suggested post" in gray at the top?

How is this not spam?

Not sure what you mean but I'm a fairly typical HN type and I read the article of my own free will and found it useful.

Compared to what? Jesus.

Other ads on facebook, presumably.

Did you even read the article?