Facebook introduces ad-ranking system to identify good ad placements
Facebook is introducing an ad-ranking system that will identify better-performing ad placements on third party publishers and apps, beyond a simple click-through rate measurement. It will give greater weight to placements that result in meaningful customer engagement such as making a purchase, email capture or sample request. Higher performing placements will command a higher premium. Facebook has issued a best practice guide for publishers and will activate the new ranking system by year-end.

by Erik Sass , Staff Writer @eriksass1, October 18, 2016

Facebook is tightening the screws again.

Having long allowed advertisers a (relatively) large amount of leeway on how they distribute ads via its Audience Network, which enables brands to place ads on sites and apps outside the social network itself, Facebook is planning to bring more order to the system.

To that end, it’s introducing an ad-ranking system that will identify better-performing ad placements on third-party publishers and apps, the social network revealed last week.

Under the new scoring system previewed on Friday, Facebook will measure the effectiveness of individual ad locations on Web sites and apps, going beyond simple click-through rates to give greater weight to placements that actually result in consumers taking some action after the initial click.

Ad locations that perform better will eventually cost more to advertisers.

Facebook will measure the effectiveness of ad placements against performance criteria selected by advertisers, including things like the consumer volunteering an email address, asking for a sample or actually buying a product.

The system covers all kinds of ad placements and formats, ranging from native to interstitial and beyond, focusing mostly on ads that refer visitors to advertiser Web sites.

As always with Facebook, there’s an upside and a downside for publishers, as high-impact placements will command a higher premium, while rates for low-impact inventory will probably go down. For their part advertisers should benefit from more precise control over the effectiveness of their ad buys, in exchange for shelling out more dough.

Part of the rationale for the new ranking system is that it will help identify ad placements that may produce accidental clicks on mobile devices due to formats that are difficult to navigate. This, in turn, should help bring ads on the Audience Network closer to ads appearing in Facebook’s News Feed in terms of effectiveness.

The new ranking system and prices are expected to be active by the end of year. Facebook has also issued a best practices guide to advise publishers how to produce higher-scoring ads. Publishers can consult their Advertiser Outcome Score to see where they stand.