Facebook has introduced Promoted Post in limited countries. Facebook gives users the option to pay $7 dollars to have their post promoted for higher visibility so more friends can see it. This would be used to promote important announcements such as a wedding. I will get into it later why this may not work.
Who will use Promoted Post?
Your average everyday Facebook users with a few hundred friends will not be promoting post. The promoted post users will be businesses such as McDonalds promoting a new milkshake range; it is very similar to Twitter’s Promoted Tweets. Other users of Promoted post will be Musicians, Promoters with thousands of friends, celebrities and influencers such as Arianna Huffington.
Why Promoted Post will work
With a billion active users, Facebook need a very low conversion rate with its users to generate significant revenue. Let’s say only 150,000 users out of 1,000,000,000 use promoted post on a daily basis that will generate over a million U.S dollars on a daily basis; not bad to supplement their advertising income. That is just a rough estimate, Facebook probably have analytic data that suggest a significant proportion of Facebook users will be interest in such a service.
There will be a backlash as always some might say Promoted Post contradicts the Facebook ‘will always be free’ statement. Other than a few users threating to leave and coming back I don’t think ‘Promoted Post’ will hurt Facebook.
Their biggest challenge remains mobile product development and increasing revenue on both mobile devices and PC users.