Facebook is now serving 65% fewer ads, but the average cost per ad is 335% higher, compared to the same period in previous year, according to a news report.
Marketing magazine Advertising Age reports that over the past two years, Facebook cut the number of desktop ads displayed on its right column, where people seldom paid attention.
Rather than compensating by putting more ads in people’s news feeds, which is more expensive for advertisers and the only place where Facebook shows ads on mobile, Facebook instead cut the number of news feed ads as well.
Despite this move, Facebook has managed to grow its average revenue per user, Advertising Age reports.
Facebook’s decision to not grow its ad business by simply displaying more ads “was a pretty controversial strategy internally” but has paid off over the last year, the magazine states.
The network wants to show the value of these more expensive ads, especially those that people don’t click. As a result, it’s rolling out its ‘conversion lift measurement’, which allows users to see when someone who saw an ad ended up making an in store purchase, to all advertisers in all countries.