Facebook's bigger pics: It's about the ad revenue
The social network's redesign of its News Feed features bigger photos, something that could keep users engaged on the site longer, giving the company more opportunity to market to them.
When Mark Zuckerberg unveiled Facebook's redesign of its News Feed today, he billed it as less cluttered and more personalized with an emphasis on bigger images. What he didn't talk about during his presentation -- but clearly what was on the minds of Facebook's advertisers -- was that this redesign is also about bigger ads bringing in bigger dollars.
"Larger images will result in higher [click through rates], a higher level of engagement, and better performance," said Hussein Fazal, CEO of AdParlor, an agency that buys Facebook ads brands as American Express and L'Oreal. Already, he said, the News Feed ads are up to 10 times more effective than those that line the right side of the page. The new design, he argues, will improve that further.
With the new layout, pictures you post of your vacation will show up larger in the News Feed -- and so will images that accompany ads in the News Feed. The line from Facebook is that all content is treated the same, and that includes ads.
After the event, some Wall Street analysts sent out notes about how the new design could up engagement, and the stock rose more than 4 today percent to close at $28.58 (though that's still far from its IPO price of $38.)
Zuckerberg has his top lieutenants have hinted that such changes would be coming to News Feed. On Facebook's latest earnings call in January, the CEO said that "advertisers want really rich things like big pictures or videos, and we haven't provided those things historically. ... I think you will continue to see it go in that direction."
So Facebook redesigned the News Feed to give much more space to photos, which now account for as much as 50 percent of the content on News Feed. Facebook users upload 350 million pictures a day to the site, and yet the social network hadn't increased the prominence of those photos as they've become a bigger piece of users' posts.
"They say a picture is worth a 1,000 words and today's design is more like 500," Facebook product design manager Julie Zhou said during today's press conference, talking about the design Facebook is doing away with.
The Facebook-owned Instagram, of course, is all about photos, but Instagram's popularity has been oddly problematic for Facebook. In fact, this redesign was also foreshadowed by comments that CFO David Ebersman made last week at the Morgan Stanley Technology, Media, & Telecom Conference.
There, Ebersman noted that he considered Instagram as a "quite formidable competitor." That's because Instagram users are quite content to share their snaps on that site without ever linking to them on Facebook, which business-wise isn't helpful considering that Facebook isn't yet making money from Instagram.
This is a partial solution to that. Now, Facebook looks a lot more like Instagram, but with a crucial difference: there are plenty of ads.
