In a post-IPO effort to prove it can still engage its users with advertising, Facebook has started selling ad space that it used to give away for free. The update comes to Facebook Offers, which is the social network's version of daily deals. Before, merchants could post virtual coupons for their followers for the low price of zero dollars. Starting today, however, Facebook will charge "at least $5 on related ads to promote each Facebook Offer to a targeted audience of fans and friends of fans," report Reuters's Alistair Barr and Alexei Oreskovic. Facebook did a clever thing here: They lured in businesses to the power of Offers when the program launched last February and will now start charging to push those ads into News Feeds — the most valuable of Facebook's real estate.
In the face of the IPO fallout, though, this is more a cover-up than a makeover for Facebook's ad woes. Unlike with other ads on Facebook, the Offers feature allows companies see how their promotions convert into dollars. And with advertisers having complained about wanting to see the value of Facebook ads measured in terms of sales, Offers kind of does that. For example, Facebook notes, the ARIA resort and casino in Las Vegas got "nearly 5X [return on investment] after running Offers on Facebook." That kind of thing is more valuable than an ad in the abyss, or at least valuable enough that Facebook thinks they will they pay for it. Also, part of the new revamped offers includes barcodes to track what people redeem and when. As one of the most requested features, says TechCrunch, this should help convince companies, which always want more information about buyers. to get on board. Overall, the deal works for Facebook, which gets money, and for advertisers, which get results. And that should appease Wall Street. (Though it hasn't yet, the stock is currently trading down.)