How many ads should Facebook Newsfeed display?

Introduction

The question at hand is how many ads Facebook Newsfeed should display. This trade-off involves balancing user experience with revenue generation, a critical decision for Facebook's core product. I'll analyze this by examining user behavior, advertiser needs, and Facebook's business goals.

Step 1

Clarifying Questions (3 minutes)

• What's the current ad load in the Facebook Newsfeed?

• Why it matters: Establishes a baseline for comparison
• Hypothetical answer: Currently, 1 in 5 posts is an ad
• Impact: Helps gauge the magnitude of potential changes

• What are Facebook's current revenue targets and growth expectations?

• Why it matters: Aligns decision with business objectives
• Hypothetical answer: 15% YoY revenue growth target
• Impact: Influences the balance between user experience and monetization

• How has user engagement been trending recently?

• Why it matters: Indicates user satisfaction and potential ad fatigue
• Hypothetical answer: Slight decline in time spent on platform
• Impact: May suggest caution in increasing ad load

• What's the current advertiser demand and inventory utilization?

• Why it matters: Determines if there's pressure to increase supply
• Hypothetical answer: High demand, 90% inventory utilization
• Impact: Could justify exploring increased ad load

• Are there any upcoming product changes that might affect ad placements?

• Why it matters: Ensures alignment with broader product strategy
• Hypothetical answer: Exploring new ad formats for Stories
• Impact: Might influence decision to adjust Newsfeed ad load