As a Product Manager on Facebook Newsfeed, how would you decide whether to show an advertisement or the "People You May Know" widget?

Introduction

As a Product Manager for Facebook Newsfeed, I'm faced with the critical trade-off between showing an advertisement or the "People You May Know" (PYMK) widget. This decision impacts user engagement, revenue, and the overall platform ecosystem. I'll analyze this trade-off by examining the products involved, identifying key metrics, designing experiments, and providing a data-driven recommendation.

Step 1

Clarifying Questions (3 minutes)

• What are our current revenue targets and how does advertising contribute to them?

• Why it matters: Understanding financial goals helps prioritize revenue vs. user growth.
• Hypothetical answer: Advertising contributes 90% of revenue, with aggressive growth targets.
• Impact: May lean towards prioritizing ad placement over PYMK.

• What's the current user growth rate, and how does PYMK impact it?

• Why it matters: PYMK's effectiveness in user acquisition affects its value proposition.
• Hypothetical answer: User growth has slowed to 5% YoY, with PYMK contributing to 20% of new connections.
• Impact: Could influence the decision to maintain or increase PYMK visibility.

• Are there any upcoming changes to the ad targeting algorithm or PYMK recommendations?

• Why it matters: Improvements in either system could affect their relative performance.
• Hypothetical answer: A new PYMK algorithm is in development, promising 30% better recommendations.
• Impact: Might suggest delaying major changes until the new algorithm is implemented.

• What's the current split between ad and PYMK impressions in the Newsfeed?

• Why it matters: Establishes a baseline for current performance and user experience.
• Hypothetical answer: Currently, it's 70% ads, 30% PYMK.
• Impact: Helps determine if we're already at an optimal balance or if there's room for adjustment.

• Are there any regulatory concerns or upcoming policy changes that might affect ad frequency or data usage for PYMK?

• Why it matters: External factors could limit our options or force changes in the near future.
• Hypothetical answer: New data privacy regulations are expected in the next 6 months, potentially limiting PYMK's data usage.
• Impact: Might influence a decision to focus more on ads if PYMK effectiveness could be reduced.