February 27, 2012, 12:22 PM

Facebook revamps its premium ads

The new ads could boost consumer engagement by 40%.

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An advertising revamp that Facebook Inc. plans to launch on Wednesday will give marketers a better shot at reaching consumers whose friends on the social network have indicated they Like products and companies, a source familiar with the plan tells Internet Retailer.

The plan focuses on Premium ads, which mostly larger advertisers buy via Facebook’s sales team. The social network’s Premium ad service combines a brand’s Page posts with social context—that is, the information that Facebook users reveal about themselves, such as what they Like.

The changes could make it easier for marketers to leverage the Premium ad format because anything a marketer posts to its Facebook page—a status update, photo, video, link, question and event—can be turned into an ad, which then can be targeted to anyone on the social network. When the consumer seeing the ad has friends who are fans of the marketer’s page, Facebook will automatically add a heading that ties the ad to the consumer’s friends.

For instance, a Premium ad might show that “You and Jim Squires Like the Ides of March,” a reference to a movie released last year. Below that interaction is a “Recent Post” heading from the film’s page that noted “Rolling Stone calls Ides of March ‘A big, bruising thriller,’—Peter Travers” along with a video clip that appeared in the same post on the film’s page. Under that ad copy are buttons that enable consumers to Like or comment on the post featured in the ad. The new ads appear under a “Sponsored” heading.

The social network’s sales team has been briefed that tests of the revamped format have bolstered engagement—which measures whether someone clicks on the ad—by roughly 40%, the source says. The likelihood a consumer will remember the ad increased by 80% and boosted the fan bases of the advertisers by 16%, the tests show.

The format will replace the social network’s so-called classic premium ad formats, such as Premium Like, Premium Event, Video Comment, and Premium Poll. The social network’s Marketplace ads, which appear on the right column of pages on Facebook.com, will not be affected. Marketplace ads are the social network’s self-service format that marketers can buy and target themselves based on information that consumers share on the social network. They appear on the right side of a Facebook page.

The source says the sales team has been briefed to tell advertisers that the format is particularly useful to reach consumers who’ve yet to become fans of a company and to finely target a small subset of their fan base.

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