Facebook logout ad price equal to takeovers on other sites; advertisers still question value

Facebook’s initial asking price for premium ads including placement on the logout page was $710,000 per day in the U.S., according to an Ad Age source who was briefed before the product announcement at the end of February.

The figure is a total price for the large logout display and smaller homepage ad units, which Facebook sells as a bundle. Ad Age says the breakdown was $550,000 for the homepage ads and $160,000 for the logout page. The total cost is comparable to homepage takeovers on portals like Yahoo, YouTube and MSN, but not all advertisers will see Facebook offering equal value.

In previous years, Facebook “reach block” ads — homepage units that reach all of a specified demographic on a given day — cost between $300,000 and $500,000. But compared to takeovers on other sites, which are much more prominent and allow animation upon page load, Facebook’s offering seemed weak.

Since then, the social network modestly expanded the size of ads on the homepage, allowing slightly larger images and including more social context, such as thumbnails of friends who are connected to the brand. The logout page ad is a significantly larger unit, more banner-like than anything Facebook has offered in the past. See this example from Ford Mustang that ran this week.

Advertising executives we’ve talked to are intrigued by the new format, but have concerns about the value of an ad that shows at the end of a user’s session rather than while they’re logged in. The logout ad also does not appear to some of the social network’s most active users: those who are logged in all day on their computers and mobile devices.

To compete with portals for major advertising dollars, Facebook will have to convince brands and agencies that its more reserved ad style combined with the power of the social graph is more effective than traditional buys. Until then, we’ll continue to see advertisers spending the bulk of their budgets in other areas, even if they’re driving traffic to Facebook apps and pages. Absolut Vodka, for example, has a YouTube takeover today that leads to a Facebook tab (see below). In this situation, Google gets the big money and Facebook only gets the peripheral benefit of another pageview with a few sidebar ads and possibly some engagement elsewhere on the site. When the company goes public later this year, there will be increasing pressure on Facebook to monetize more aggressively.