Advertisers are already liking the increased real estate. "Bigger is definitely better," Zach Newcomb, an executive director at the digital ad agency ROKKAN told The Atlantic Wire. "Especially on mobile and Web, where immersive imagery isn't just pretty, it's expected by the user." And more space might be part of the jump to higher CPM rates, Newcomb added, with Facebook automatically being able to charge more: "I mean, pixels are pixels; there's the argument that higher value is implied by the increase in visual real estate."
Importantly, as Newcomb and other advertising executives notes on Thursday afternoon, Facebook likely won't raise it's ad rates until it can prove that its big new ads are truly working. And that's why the other big News Feed development will excite marketers and ignite Facebook earnings: engagement is about to go way up.
As Zuckerberg explained during his brief remarks at the announcement, Facebook's users love photos so much that photo posts now take up some 50 percent of the current News Feed. He even had this handy chart:
It's a smart trick, making the ads look like photos posts in the new feed. Because not only do Facebook users look at photos and post photos more than they do anything else on Facebook, but the giant images also happen to increase the most engagement, a source told AllthingsD's Mike Issac. "Facebook News Feed engineers see the most engagement from users on photography and visuals that appear inside the News Feed," Isaac writes. "And every time Facebook tweaks the algorithm to show the best content that users engage with the most, photos still float to being the most prominent inside the feed — so much so that Facebook must tweak the algorithm to show more text-based status update content, even if that isn’t the stuff people want to look at the most."
Facebook photos: the key to likes, clicks, comments, and everything, more than anything — and the new key to Facebook's second consecutive year of making money off you.
Even if the social network won't quite admit it, ads matter. Besides being the predominant source of revenue for a company that needs to prove itself to the market and hang onto its user base — a company exec even called Instagram a "competitor" recently — they're also the biggest potential way to scare off users, with Sponsored Stories not going over so well and a full 20 percent of its 1 billion users leaving Facebook, according to one survey. The social network will roll out this version of News Feed slowly, in a nod to the product's launch debacle in 2006, when Zuckerberg was forced to very publicly react to user outrage over privacy concerns.
But Facebook is gambling that it knows enough about your data to make your News Feed an interesting extension of your interests and still spin it off as a metrics-packed product for advertisers. If a user interacts with a page — if you "like" a brand — it means there's reach. Extrapolating even more, it could also mean the ad touched that user in a more compelling way than someone just seeing and absorbing a message. These are big emotions Facebook is selling now, not just eyeballs and clicks — and that's valuable information than some passive rectangle ad.