Facebook is getting filled up with ads, and users are reacting negatively to this development. As a result, shares of the social media giant experienced a significant almost 8-percent drop in trading recently after the company announced that it’s beginning to hit its limits on how many ads it can have without alienating users.
This ad overload compelled the Menlo Park, CA, company to add fewer ads, which is expected to cause ad revenue growth rates to “come down meaningfully” in 2017, according to chief financial officer David Wehner.
Naturally many advertisers are worried about the hit that they may take from the changes, but the situation is nothing new. The company has done similar actions in the mobile realm, and ultimately, advertisers were able to adjust with the changes and earn even more ROI.
To counter the effects of the social network’s plan to gradually control the volume of ads, Facebook is testing other money-making initiatives, including a marketplace that lets users post items for sale and chatbots in the messaging app that businesses can use to communicate with customers.
Karl Knights, VP UK for Kenshoo, a Facebook marketing partner, advises advertisers to be smarter about their ad strategy to maximize their ROI and combat Facebook’s impending changes. He emphasizes the need to focus on ad targeting and personalization with tools such as Facebook custom audiences to reach out to users who have visited the website and other business-related channels in the past.
“You’d also expect Facebook advertisers to increase their use of ad testing, generating multiple versions of ads and using audience-specific imagery and copy in order to optimise performance,” says Knight.
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Facebook warns advertising revenue growth will slow, bbc.com
Facebook starts limiting number of ads in user timeline, netimperative.com