More Ads Coming to Facebook

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Facebook Inc. (NASDAQ: FB) is testing an advertising service that allows companies to place more promotional messages in the News Feeds of users, even if those members or their friends have not signaled they like the advertiser. Until now, these types of ads only showed up on PCs, walled off the Facebook News Feed, and included only companies or groups a user has "liked."

More and more users of the world's most popular social network have been accessing the service from wireless devices, where Facebook's advertising options have been limited. The company launched its first mobile ad service earlier this year with "Sponsored Stories," which enables companies to pay for content in the News Feed after members or their friends have indicated they like a company.

The new test service is said to include limits so that a member's News Feed isn't filled with "too many" advertisements. But the question is, who decides how many ads is "too many"? It is not likely to be the users.

Some advertisers, such as General Motors Co. (NYSE: GM), have yanked their Facebook ads because they have had trouble measuring whether the ads led to sales. Facebook has been making a push to convince the world's biggest brands that Facebook ads can indeed work. Facebook and GM are in talks to bring the automaker back into the fold, and Wal-Mart Stores Inc. (NYSE: WMT) has said it will be increasing its Facebook ad budget this year.

Here's hoping Facebook does not come to resemble the hood of a NASCAR racing vehicle.


Filed under: 24/7 Wall St. Wire, Business Services, Media Tagged: FM, GM, WMT
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