Facebook has always relied on display advertising to monetize its massive user base. However, as Facebook’s share price continues to sink, and investors increasingly demand new revenue strategies, the Facebook ads team has begun aggressively pushing out new advertising products.

The latest is a long-awaited search advertising program, that will allow Facebook to monetize the search box and offer an advertising platform competitive to Google AdWords. However, while marketers familiar with AdWords or adCenter may have been initially excited by this offering, Facebook search ads are actually very different from traditional search ads.

The biggest difference is that Facebook search ads cannot actually be targeted towards specific keywords. Instead, search ads are targeted in basically the same way as Facebook display ads – by selecting specific interests that your target users have.

Regarding the targeting system, a Facebook rep commented – “Advertisers can target specific search entities that they’d like to show up against, including Pages, Places, and Apps. In addition to entity targeting, advertisers can further filter their ads based on demographics, location, and connections (those who Like vs. don’t Like my page already).”

So while the current system doesn’t allow for the same precision as AdWords, it does offer demographics targeting, which neither Google nor Bing can offer. And the ability to advertise against specific “entities” does allow for some search-like precision. We’ve already seen some major brands experimenting with competitive advertising – check out the examples below of Subaru advertising against the “Honda” entity.

The real power of these ads is to reach people through the dual-relevance factors of search intent and demographics. If you can reach people who you know are interested in your business based on their search query, and you know are the right demo to actually make a purchase, you’ve obviously got a very robust advertising platform.

In terms of ad mechanics, the format is still fairly limited. Advertisers can only promote pages within Facebook, not external URLs. The sponsored result creative does have an image (unlike most AdWords ads), however the title and photo of the ad are tied to the actual entity being promoted, and can’t be customized.

Actually building the ads requires using the Facebook power editor, but is otherwise pretty simply. Facebook provides the following instructions in their advertising help section -

• Create an ad using Power Editor
• Select the campaign you want the ad to run in and click “Create Ad”
• Provide the app, Page, or place you want to promote
• Select “Facebook Ads”
• Select “Sponsored Result” as the story type
• Enter a message (up to 70 characters) to appear in the ad.
• Select the entities to target.
• Add your audience targeting parameters and pricing strategy
• Upload ad

Over the long term, it will be interesting to see how this format performs relative to Facebook display ads as well as Google AdWords. Of course, now is too early to tell how effective the format will be. However, most search marketers would probably agree that while this new format is certainly worth a test, it won’t be replacing AdWords any time soon.