Some Facebook users temporarily saw a link to a new feature called “custom user clusters” within the self-serve ad tool last week.

Facebook representatives won’t comment on the feature, and the link is now gone, suggesting there was a bug that accidentally made it visible. Users who clicked the link were taken to a page that returned an message that they did not have permission to see the page’s contents. From the URL structure, it seems like the page might be a terms of service page for the so-called “custom clusters.” There is no other documentation about the feature anywhere on Facebook’s site.

We wonder whether Facebook is building a feature that will allow advertisers to save particular targeting parameters to use in later campaigns. The custom user clusters link shared an icon with the Creative Library and Power Editor, which are both advanced features for making ad creation more efficient. The Creative Library, for instance, includes all the combinations of images, headlines and body text an advertiser has previously used. It makes sense that Facebook might be looking to provide a catalogue of an advertiser’s targeting history as well.

This type of feature would give more power to the self-serve advertiser and potentially give users the impression that they don’t need to work with a third-party with Ads API access. In general, though, the social network seems to be working on making its self-serve ad tool more accessible to less experienced advertisers. There’s the recent redesign of the tool that simplifies some of the language around creating new ads and introduces a more step-by-step flow. Facebook has also begun testing a “promote” button for page owners to create Sponsored Stories directly from the posts on their page. Advertisers who want to test hundreds or thousands of ad variations and targeting parameters, however, find that third-party providers make this simpler than Facebook does and they can better optimize their campaigns as a result.

Thank you to Dan Carter for the tip.

Facebook is collecting data on its latest ad units by asking for direct user feedback through the question, “Which of the above ads do you prefer?”

We saw Facebook conducting similar research in February 2011 among users in Israel. This was before the rise of Sponsored Stories and ads that come from page posts, as seen to the right. Now some U.S. users are seeing the survey, which presents three multiple choice options: neither, top ad or bottom ad. Previously, Facebook did not offer the “neither” option. The survey question appears in the right sidebar underneath two ads.

The social network has implemented a number of new ad units over the past year and a half, and advertisers are increasingly choosing these types over the traditional ads with a headline, body copy and image. There is plenty of quantitative data Facebook can collect by serving billions of ad impressions a day, but this type of research poll helps the company gather how users feel about different ads on the site. If Facebook finds trends — for instance, users prefer photo ads over question ads — it can reconsider whether it should redesign the ad unit or get rid of it all together.

There is also opportunity for Facebook to apply research poll data on an individual user basis so that ads are more personalized, similar to how the social network tailors News Feed to each user. For example, it might become clear that a user prefers ads for consumer products over enterprise software. This could help Facebook show users the ads they are more likely to click and take action on.

Facebook has been testing a new self-serve ad tool that frames ad creation in easier-to-understand terms and simplifies the steps to starting a new campaign.

Now that we’ve had the opportunity to use the ad tool ourselves, we can see Facebook is making positive strides in creating a tool that small businesses and individuals can use effectively to create campaigns for their pages, apps and other content. However, we have some doubts about the new “objective” section. Targeting any objective besides clicks forces advertisers to pay on a cost per impression basis rather than bid on cost per click. It is unclear whether this an improvement, and we’ve heard mixed reviews from some advertisers who have tested the option.

What follows is a walkthrough of what it is like to create a campaign for a Facebook page using the new ad tool. Note that the tool is still in beta and some users might see different variations in design, phrasing or features.

Set up your ad or Sponsored Story

When users select “Create an ad” from their page’s Timeline or anywhere else on the site, the first thing they do is select the destination of the ad they want to run, whether its a page, an app or external URL. This is an improvement over the old design, which provided all of an advertiser’s options on a single page, which could be overwhelming for someone first considering making a campaign. However, as we’ve covered, some users with the new format cannot yet create ads for their Facebook events.

What do you want to promote?

After users select their ad destination, Facebook asks “What do you want to promote?” When the ad destination is a page, advertisers can select the page itself or a specific post from the page. This is much clearer than the option in the old tool, which made users choose between the ambiguously named “Sponsored Stories” and “Facebook Ads.”

When advertisers indicated that they want to promote their page, not just a specific post, they see another two options: “A new ad about [your page]” or “Stories about their friends liking [your page].” The former presents fields for creating a traditional Facebook ad with an image and body copy. These ads can lead to third-party tab applications, if desired.

When advertisers choose the latter option, they create Sponsored Stories, which will show the name of the page and a thumbnail of its profile photo, along with the name and photo of a friend who Likes the page. There is no additional customization available for this type of ad.

When advertisers decide they want to promote a specific page post, they get a drop-down menu of recent posts that can be used in ads. After selecting a post, advertisers can select whether they want to promote the post itself or promote stories about friends who Like the given post. Facebook could provide more explanation about the differences between these types of ads, for example, in terms of reach and placement. The second option, which Facebook sometimes calls Page-Post Like Sponsored Stories, have a smaller potential audience because Facebook won’t show the ad to users unless they have a friend who engaged with the post. However, these ads are eligible to run in News Feed, whereas a specific page post ad will never appear in News Feed for non-fans.

Choose your audience

The next step after choosing any of those four ad types is defining an audience. The demographic targeting is the same as it was in the old tool, but now advertisers can target precise interests and broad categories at the same time. Previously, advertisers could only choose one or the other. Now, for example, an advertiser can target the broad category of Hispanics and then refine that target to only those who are interested in Barack Obama.

Objective

Next up is the “Objective” section where advertisers select whether they want the ad shown to people who are most likely to click on their ads or take an action such as Liking a page. The old ad tool did not have a feature like this. When advertisers choose “click on my ad or sponsored story,” they will then be asked for a cost per click bid.

However, when advertisers choose “Like my page,” Facebook removes the CPC option and requires them to pay by impression. There is no bidding involved. Supposedly, Facebook will change who it shows an ad to based on the action, advertisers select, but it’s unclear how much of a difference this makes in an ad’s outcome. Although some less experienced advertisers might prefer not to have to deal with bidding for clicks, others will see this option as giving them less control and requiring more monitoring to optimize their ad performance.

After quietly entering the mobile advertising market, Facebook in-app advertising service LifeStreet Media is now looking to become a major player in the industry. The company announced today it has raised $66 million in new funding from Nautic Ventures in order to help it continue its mobile expansion plans.

Founded in 2005, the San Carlos-based company is one of the biggest in-app advertising services on Facebook, counting Zynga, Big Fish Games and Classmates among its clients. The company and now reaches over 350 million unique users every month on Facebook, iOS and Android. According to LifeStreet’s CEO and co-founder Mitchell Weisman, the mobile portion of those users is growing rapidly.

Although already successful on Facebook, LifeStreet faces some stiff competition in the mobile advertising space. There are established players like Google’s AdMob, Apple’s iAd, ValueClick owned Greystripe and the newly public Millennial Media to contend with. There are also well-funded independents like InMobi, which is backed with $200 million from Japanese conglomerate Softbank, and JumpTap which has raised $94 million in total. The company will also been going head-to-head against more niche service companies like PlayHaven and Chartboost.

Some users with a new version of the self-serve Facebook ad dashboard are unable to to create ads to promote their events, we’ve discovered.

A Facebook spokesperson confirms this is a bug in the ad tool. As a result of the bug, users will not be able to see any of their events from the drop-down menu within the tool. There are a few workarounds for users who want to get the word out about an event, but these ads are not as effective as traditional Facebook event ads because they do not always include a button to RSVP.

One option for users affected by the bug is to create an event through a Facebook page rather than a personal account. Then users can indicate that they want to promote a specific post from that page. The event should appear from a drop-down menu. The resulting ad has more words and a smaller photo than traditional event ads, which is likely to make it less effective. Also, users who are not fans of the page will see a “Like this page” call to action rather than “Join,” which Facebook uses in event ads to let users RSVP with one click. (Note that our sample screenshots include the “Invite Friends” call to action because the user already Likes the page and has joined the event.)

Another option is for users to create an ad, either from their page or personal account, and promote it as an external URL, rather than a native Facebook event. This gives event organizers full control over the headline, body copy and image for the ad, but does not include a “Join” or Like button. The benefit here is that the image will be the same size as it would be for traditional event ads. However, users might be less likely to click the ad if it appears as though it is leading them off-Facebook. It will also be harder to track how many users RSVP as a result of the ad versus other means.

Facebook did not offer timing on when the issue with event ads will be resolved.

Buddy Media today announced its new BuyBuddy platform for managing Facebook advertising campaigns.

BuyBuddy is the result of the social media management software company’s acquisition of Facebook Ads API partner Brighter Option in February. Buddy Media has integrated the advertising product with its page management tools to create the type of unified system that large brands are looking for to make decisions and track success on social platforms.

Facebook has been shifting its advertising model away from traditional display ads toward one where brands promote page posts and user activity. This new emphasis on content is what led Brighter Option to become the first company to combine the Ads API and Insights API so businesses could easily see how posts were performing and create ads accordingly. Ten days later, Buddy Media announced it had acquired the company.

BuyBuddy CEO and founder Peter Goodman says today’s announcement is more than just a name change. (Goodman retained a CEO title in the acquisition.)

“We have integrated [Buddy Media and Brighter Option] products to work more in harmony,” he says. “This also allows us to leverage more information Buddy has on their end and bring in more of Buddy’s proprietary statistics.”

For example, Buddy Media tracks conversions off-Facebook and generates some of its own engagement metrics for the content brands share through the platform. Bringing content marketing and content advertising into a single system will allow advertisers to better optimize their campaigns for different actions.

“What consumers engage with drives a brand’s paid and owned strategy,” Buddy Media CEO Mike Lazerow says. He adds that online content marketing could also help inform what brands do beyond Facebook, “What becomes a TV ad is an extension of what people respond to in the social sphere.”

Lazerow also shared the following statistics about BuyBuddy:

• 1,000 clients with users in 91 countries
• 1 million clicks per day (90 million total) in Q1 2012, up from 54.1 million total clicks generated in Q4 2011
• 127 billion impressions in Q1 2012, up from 92 billion in Q4 2011
• 1.6 million total ads created in Q1 2012, up from 1.2 million Q4 2011
• Increased CTR by 90 percent and reduced cost per click by 45 percent for Work the World
• Helped Great British Chefs achieve an average clickthrough rate of .07 percent versus the Facebook benchmark of .02 percent

Facebook added support for creating and managing offers through the API this week, but a spokesperson tells us that this is only available to select partners who already have access to the self-serve version of the feature.

Offers are a new story type for page owners to post coupons that users can collect from News Feed or ad units. The feature is still in beta for premium advertisers and a limited number of pages in the U.S., New Zealand, Singapore, Australia, Japan, and Turkey. Facebook says it plans to launch offers widely in “coming weeks,” which might mean months from now based on how Facebook has used the term in the past.

Making offers available through the API means developers can integrate the feature into their social media management platforms. Even though the feature isn’t available to all pages yet, developers will be able to prepare for it. Although offers are free to create, businesses can buy Sponsored Stories to expand their distribution. Companies working with the Facebook Ads API will likely want to bring offers functionality to their ad tools so that advertisers can create and promote an offer from a single dashboard.

Facebook will test a new “promote” button that makes it easier for pages to create Sponsored Stories directly from their posts, a company spokesperson tells us.

The button will appear from the page publisher — the box from which page owners create posts — and on posts that have already gone live. The feature is aimed at small- to mid-sized businesses that are using Facebook for marketing, but don’t necessarily have the resources to work with a Facebook ad rep or third-party partner. The social network’s ad dashboard has become increasingly complicated with untraditional ad types like Sponsored Stories and page post ads, but the promote button could make ad creation much simpler.

The promote button will let page owners pay to give their content additional exposure to their fans. If fans interact with the content, their friends might see that activity as a Sponsored Story, but there is not currently a way for page owners to create an ad targeting non-fans using the promote button. They will have to use the self-serve ad dashboard or the Ads API to do that.

“Right now this is a very small test but we will continue to iterate on the feature based on feedback,” a spokesperson says.

Facebook has been gradually encouraging page owners to pay for distribution of their content, even among fans they formerly thought they could reach for free. As it turns out, the average page post only reaches 16 percent of fans, the company revealed in February. This is the result of users connecting to more people and pages, all of whom are generating more stories than ever before. Most people wouldn’t enjoy seeing every bit of their connections’ activity in News Feed, so Facebook uses EdgeRank to filter some stories out and highlight the ones that seem most relevant to each user.

Last year the social network introduced a new type of ad that turned page posts into Sponsored Stories. That was the first time the company began to encourage businesses to spend money on engaging existing fans, in addition to running campaigns to acquire new ones. Then at the Facebook Marketing Conference earlier this year, the company revealed Reach Generator, a premium advertising solution to help large brands reach their fans through Sponsored Stories within the mobile and desktop feeds, as well as through sidebar ads. The promote button is a simple way to foster the same strategy among smaller businesses.

Facebook estimates that about 4 percent of its first quarter revenue can be attributed to ads displayed on Zynga app pages, according to an updated regulatory filing. An additional 11 percent of Q1 revenue came from direct payments from Zynga.

Although Zynga accounted for 15 percent of Facebook’s $1.058 billion in revenue from Jan. 1 to March 31, that’s a lower percentage than the 19 percent it was responsible for in 2011. Investors are likely to see this as a positive development. Such reliance on a single company can be risky, particularly as Zynga expands its games to additional platforms beyond Facebook, including Google+, mobile and its own Zynga.com.

When the social network first filed for an initial public offering in February, it revealed that the social game company accounted for 12 percent of its 2011 revenue as a result of virtual goods payments and advertising, but it did not include revenue it generated indirectly from users visiting Zynga app pages that include third-party advertisements. Facebook says 7 percent of its total 2011 revenue was generated this way, compared to 4 percent in the first quarter of this year.

A greater proportion of Zynga-generated revenue now comes directly from the social games company rather than ads displayed on its app pages. This is likely related to Facebook making Credits mandatory for all social games in July 2011 and subsequently taking 30 percent of revenue from all sales of virtual goods. It is also possible that Zynga is spending more to acquire new users through advertising, although since the company does a lot to cross-promote its games to existing players, this might not be as much of a factor.

Either way, it’s likely Facebook will continue to reduce its dependence on Zynga as other developers build on its platform. More companies from a broader range of industries are developing applications on Facebook, leading to additional ad revenue for the social network. As these apps develop monetization strategies as social games did with virtual goods, Facebook can decide to take a similar cut of revenue in the future. For example, the company could take a proportion of subscription payments for Spotify, which currently requires users to have a Facebook account to sign up.

Advertisers will soon be able to measure a wider range of actions that consumers take after seeing an ad on Facebook, including comments, shares, app use and Credits spent, according to a spokesperson from the social network.

Previously, it had been difficult for marketers to understand what sort of effect their ads had beyond building a fan base since Facebook did not provide information about what users did after they clicked on an ad. This change seems to be part of a continued push to de-emphasize Likes as a campaign goal, and instead encourage marketers to focus on engagement within the platform.

Today’s announcement does not affect Facebook’s pricing model. Ads are still sold on a cost-per-click or cost-per-impression basis. Based on mock-ups provided by Facebook, advertisers will see a new metric in the ad dashboard called “actions” in place of what had been called “connections.” For example, with a page post ad — those derived from posts a brand made on its fan page — advertisers will now be able to see a breakdown of how many Likes, comments and shares the post received from users who saw the ad (see example below).

Under the old system advertisers could only get data about the number of people who Liked the page as a result of the ad. They could visit a separate page insights dashboard to see the total Likes, comments and shares for a post, but there was no way to distinguish which actions came organically versus through paid media. This latest change helps close that gap and could be particularly useful for Ads API partners that help advertisers optimize their campaigns. Facebook also tells us that developers will be able to measure and optimize for actions within their apps, including making purchases or any other Open Graph action. Advertisers will define what actions they want to optimize for through the API, and this could later be added to the self-serve tool, similar to what we saw in a beta version that Facebook has been testing.