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Facebook introduces update to News Feed that is good for business

November 10, 2014

Facebook announced this week that it is updating its News Feed so that users have more control over what they see. The company described the update as providing more feedback for its algorithm.

Facebook announced this week that it is updating its News Feed so that users have more control over what they see. The company described the update as providing more feedback for its algorithm.

Update to News Feed
Before the update, if users saw a story in their news feed that they were not interested in, they would have to go to the top-right corner of that story in order to select an option to hide it. Now users will be taken to another page that allows them to unfollow certain people so that their stories do not appear in the News Feed at all, reported The New York Times.

An additional component of the update involves a News Feed settings page that lists people, pages and groups that have been viewed in the News Feed over the previous week. Users will be able to sort posts or unfollow people or products as they see fit, and if users change their mind, they can re-follow later on. Basically, users are being given the power of choice on the site. 

“What you do in News Feed helps determine what you see in News Feed …You decide who you want to connect to, and what Pages and public figures you want to follow,” Facebook said, according to VentureBeat.

Good for targeted advertising
The main way that Facebook has been trying to monetize its site is through the use of targeted advertising to sell products for third-party sellers. The company uses preferences of users and other data on the site to recommend certain products or services to its members. By allowing users to filter and choose what content they want to see in their News Feed, they are effectively perfecting their formula for sending ads that are appealing and applicable to each individual user. Targeted advertising is not very effective if it fails to target the interests of consumers and the company seems to be quickly catching on. 

The goal is for people to spend more time on the service, which will expose them to more ads. In a discussion with users, Mark Zuckerberg, the company’s chief executive, explained how he envisioned the site in the future.

“With news feed, our goal is to build the perfect, personalized newspaper for everyone in the world,” said Zuckerberg, according to The New York Times.

The news feed algorithm currently takes into account many factors, such as whether users prefer to view videos or news articles and which products they purchase.  By trying encourage users to specify their ad preferences, they are making their ads more relevant and ultimately that will lead to more advertising sales for the social networking site. As merchants and retailers see increased ad views resulting in sales, Facebook’s revenue could increase significantly. 

What it means for e-commerce
The recent developments at Facebook point to e-commerce becoming more personalized in the future. This holiday season is poised to achieve record sales and a significant portion of that will come from online sales. Black Friday and Cyber Monday will see the highest level of e-commerce activity than ever before. Additionally, numerous studies have shown that the more customers are engaged in an online dialogue, the higher the chances are that they will complete purchases.

Facebook was founded by Zuckerberg in 2004 and is now the world’s largest social network, with over 1.15 billion monthly active users, according to VentureBeat. This recent move proves that the social networking site will be around for a long time and will continue to drive technology innovation and e-commerce trends in the future.

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