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Facebook's Mike Murphy on Friending Brands

The social networking site's revenue chief makes his "engagement" pitch.

Facebook chief revenue officer Mike Murphy has a simple pitch to brands: Ads on Facebook have a "significantly higher" engagement rate than ads elsewhere on the Internet. The Facebook advertising chief chatted about what the booming social network has learned when it comes to advertising on the site. The No. 1 thing: Its decision to limit ads and have them mimic the user experience has worked out well, considering the site recently said it passed 300 million users and is cash flow positive. "We want to make Facebook as fun for brands as it is for users," he said.

Facebook is now focusing on building tools for marketers to measure their performance beyond clicks. It struck a deal with Nielsen (the parent company of Adweek) to address advertisers' branding goals and who is engaging with them. It is testing a new ad product called Learned Targeting, which displays engagement ads to people Facebook has determined are more likely to be fans of the brand based on its existing fan base on Facebook. It is also encouraging brands to set up pages on the site. (They're free.)

Some brands have seen success in building huge fan bases. Of the top 25 fan pages, three (Coke, Starbucks and Skittles) are owned by brands. Brands with robust pages that were highlighted by Murphy: Starbucks (personal messages from founder Howard Schultz), JCPenney (shopping from the page) and Best Buy (an app for users to solicit feedback from Facebook friends on potential purchases). Of the top 100 brands, 83 have run Facebook ad campaigns, he said. "It's important to have a presence because this is where people spend their time," he added.

— Nielsen Business Media