Facebook Is An Ad-Friendly Destination

Operating under the tenet that users come first, Facebook has successfully attracted advertisers -- that in turn have drawn consumers -- by “making ads that are indistinguishable from content,” Tim Kendall, Facebook’s director of monetization, said Tuesday.

Speaking at Borrell Associates’ Local Online Advertising Conference in New York, Kendall said that while Facebook naturally has to make money to sustain itself, the company’s indisputable No. 1 goal of customer focus actually parlays into a variety of options for local advertisers and their target audience.

“I wouldn’t say it’s not a priority. We spend time on it, we spend resources on it,” Kendall said. “But it will always be secondary to the users and will probably always be secondary to creating more organic experiences for the user.”

That said, such a business philosophy actually aids advertisers in reaching consumers and vice versa, he said. Knowing its users and social circles in depth fosters a relationship between advertisers and consumers that’s mutually beneficial.

The advantages for advertisers are multi-fold, Kendall said. Facebook’s intimate knowledge of its users and their social circles gives advertisers the information they need to target consumer groups, down to specific niches.

The company also offers businesses free opportunities -- creating information and events pages, for example -- to reach consumers. A restaurant, for example, could promote its “happy hour” through a Facebook events page, just as a Realtor could promote an open house. “We believe the free tools themselves are a very powerful way to get started,” Kendall said.

Facebook users, in turn, aren’t blitzed with ads for goods, services or events that they’re not interested in, he said.

The social networking aspect of Facebook also provides a boost to advertisers, as consumers are more likely to access an ad -- and therefore the product or service it’s promoting -- if they see their friends have too, he said.

According to Kendall, consumers are two-and-a-half times more likely to click onto an ad when it’s in a social context. Basically, an advertiser's wares or services are simply more attractive when your friends are interested in them too, he said.

“Social really works,” he said. “We think we have the ability to create demand.”