Product design question
As a Product Manager on Facebook Newsfeed, how would you decide whether to show an advertisement or the "People You May Know" widget?
- Meta
- Product design
- Hard
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What this question tests
Prioritization tradeoff between short term ad revenue and a long term platform health feature.
How to approach it
- Clarify the tradeoff: ads drive immediate revenue per impression, PYMK drives network growth which compounds retention and future ad inventory.
- Segment by user lifecycle stage: new users benefit more from PYMK to build their network, established users may tolerate more ads.
- Propose a personalized slot allocation: show more PYMK to new or low connection count users, more ads to established, highly connected users.
- Define a test to measure the tradeoff directly: hold out groups seeing different PYMK versus ad ratios and measure both short term revenue and long term retention.
- Set a guardrail: network growth rate (new connections formed) should not drop below a set threshold even as ad load increases.
- Recommend a data driven allocation policy rather than a fixed global ratio.
What a strong answer includes
- Frames the decision as a personalization problem by user lifecycle stage, not a single global policy for all users.
- Explicitly connects PYMK to compounding long term value (network effects), the key insight that makes this more than a simple revenue tradeoff.
- Gives an illustrative number, e.g. assumes new users with under 20 friends should see PYMK in 80 percent of this feed slot's impressions.
- Proposes measuring both short term revenue and long term retention together, since optimizing only one would be short sighted.
Common mistakes
- Treating this as a pure revenue maximization question and ignoring PYMK's compounding network effect value.
- Proposing one fixed global ratio instead of personalizing by user lifecycle stage.
- No guardrail to protect network growth, which is the long term asset at risk.
Likely follow-up questions
- How would you personalize this for different user segments?
- What guardrail would protect long term network health?
- How would you value a new connection versus an ad impression?
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Learn the skill behind it
Chapters of the AI PM course that teach what this question tests.
- Chapter 4: Discovery and strategy for AI products
- Chapter 7: AI UX and human oversight: design for a system that is wrong sometimes
- Chapter 14: Get the job: the AI PM interview loop