Last winter, a few weeks after Facebook formally announced plans to IPO and months before it actually would, the company came to New York and put on a huge show for the world's big time ad buyers and media press.
Facebook rented out an entire wing of New York's Natural History Museum for the event.
In the museum's IMAX theater, Facebook sat 1,000 people and put on a big show. Facebook COO Sheryl Sandberg and product boss Chris Cox came on stage and made presentations.
The whole thing was a very big deal, and that day, amidst the ancient artifacts and blue and white corporate logos, Facebook made what it dressed up as a very big announcement: it was rolling out a new ad product called Reach Generator.
Reach Generator was not an easy thing to understand for the advertisers in the audience. It was a product they could buy to increase the frequency with which the posts to their brands' fan pages would appear in the News Feeds of their fans. This ad product would be available on mobile and desktop.
To be clear: Reach Generator was the big fancy product Facebook rolled out that day. It was their new iPhone.
So, that was March 1.
And now, six months later, guess what?
Reach Generator is already dead and gone. Buried. "Axed," as our advertising editor, Jim Edwards puts it.
Can you imagine if Apple announced an iPhone and then canceled it six months later? Sheesh.
The Reach Generator fiasco perfectly encapsulates what is wrong with Facebook's advertising business.
There is tons of interest from ad buyers in what Facebook has to offer, but what Facebook offers…
- Is too complicated to understand. Online ad buying has to be simple because it's simple on TV.
- Required brands to spend money before they started spending money on Facebook ads. Brand pages aren't free to create. Agencies have to pay someone to do it. And you couldn't buy a Reach Generator ad until you had good content coming out of your brand pages.
The good news is that Facebook seems to be learning its lesson. It did kill Reach Generator, after all.
Edwards reports that Facebook did so for the sake of "simplifying" its ad products, and because agencies understand and like another ad unit, called "sponsored stories," which are just simple little commercials they can insert in user News Feeds.
Edwards also aggregated what a bunch of industry folks are saying about the news, and you should read what they have to say here >>
More From Business Insider