Facebook Tests Highlighted Posts As Another Way to Monetize Users
Facebook is now conducting tests for users to pay for the promotion of their posts through the top of ‘News Feeds’ of their friends.
The test is restricted to a limited number of users and displays a ‘highlight’ button close to Comment and Like button on the Facebook posts of a user. When ‘highlight’ is clicked, a payment flow is displayed for the users and prices ranges between free and US$2. Available payment methods include credit card, PayPal and Facebook Credits. The post which is promoted appears in the top of ‘News Feeds’ of friends along with the ‘highlighted’ word next to the post.
Facebook regularly tests various different features which are not always incorporated to the site, but this is a surprising feature. It has been rumored in the past that it is possible for the company to charge for its services. Facebook is also busy with its roadshow for the IPO in the upcoming week. It would be a surprise however for a company to apply at this state another possible monetization.
Still, if tests reveal that there is enough interest from users for this feature, such highlighted posts could represent a new source of income for Facebook. Most probably, Facebook was inspired by Tumblr, as they launched in February a similar feature, where for $1, users can increase the visibility of their posts on the dashboard of their readers.
In case highlighted posts will be widely available for all users, it is possible to be an interesting feature for people who enabled subscribers. However, it is not easy to determine the value of a highlighted post. For instance, in the case of a $2 cost for a post to 130 friends is the equivalent of a CPM of over $15. The feature could be used for birth announcement or to promote a link for fundraising. The feature could also be used by small businesses to promote their own business in News Feed.
Theoretically, if Facebook could determine each user in Europe, Canada and U.S. to highlight only one post per year for $2 per post, the additional revenue would be about $858 million. Last year, Facebook made only $484 million from its payments business in the above mentioned region.
However, it is still not clear what would happen with the posts which are not going to be highlighted. Facebook’s algorithm fails to properly reflect if users would have to pay for the visibility of their main posts. Furthermore, it is unusual for a company to go after such blatant revenue, especially after Facebook’s initial pre-IPO discussions regarding the expectations of managing investors about the monetization approach of the social network.
In January, Sponsored Stories were re-launched to News Feed, but this content is promoted for money by advertisers and brands, not by individual users.