The ins and outs of the advertising business aren’t usually that fascinating, unless of course they involve a company that is attempting, out of necessity, to revamp the entire model.
When you think about how far advertising has come since its Mad Men days, it’s a little shocking that Facebook ads will be responsible for a majority of the company’s estimated $4 billion in revenue this year, being predicated on the notion that a user is more likely to spend money on something that a friend has recommended or is otherwise engaged with than anything else.
We had the opportunity at TechCrunch Disrupt to sit down with Facebook Ads Product Director (and Godfather of Google Adsense) Gokul Rajaram and talk about the difference between Facebook’s two and a half-year old “Social Ads,” which are basically promoted messages in a brand’s voice saying something along the lines of “Three of your friends liked Pepsi,” and the six month old “Sponsored Stories,” which are organic branded updates from users that receive featured placement in the Sponsored Stories bin on the right side of your Facebook page, among other things.
So where does Rejaram see the future of Facebook advertising heading? “Our hope is that almost every ad on Facebook at some point a few years down the road will be a Social Ad or a Sponsored Story,” he says. Which makes sense, considering the two formats are already existent on a majority of the pages viewed on Facebook.