Inside Facebook

Last week, as a result of user concern about data privacy with Facebook Platform ad networks, Facebook instituted new policies on the ways Platform ad networks can access user data. The new rules:

Regardless of whether data is being sent to ad networks or not, ads that display user data are not allowed in Platform applications unless specifically approved by Facebook.

In other words, many of the advertisements that included photos and/or names of friends in ways previously deemed acceptable by Facebook’s user experience standards are now no longer allowed. (Facebook also added a new privacy setting that will go into effect at some point in the future.) As a result, many developers have been wondering how this will affect Platform ad network CPMs.

It’s really too early to tell at this point, since it’s only been 48 hours since the new rules went into effect, and Platform developers and ad networks often see wild intra-week CPM swings in both directions. Nevertheless, we’ve spoken with several ad networks and developers, and as of now we’re hearing several reports of eCPM decreases in the 30-35% range, with some developers seeing bigger or smaller drops. US and UK impressions seem to be taking the brunt of the impact.

However, some people we spoke with say this number is likely to improve as advertisers regroup from the changes and reoptimize their creatives. Some advertisers weren’t ready for the quick policy change and so more remnant ads are running now than usual. Developers who serve large volumes of Platform ads or who are dependent on Platform advertising revenues are hopeful that that will happen sooner than later.

On the Facebook side, the company hasn’t yet said what the process is for ad networks or developers to apply to have their ads “approved.” We’ll let you know as soon as we hear more.