Facebook is growing fast. I don’t mean how quickly users are moving to Facebook, but how quickly it’s growing as a way to advertise.
As we all know, Facebook is the biggest social network of them all, with more than 1.3 billion active users. That’s almost one-sixth of the planet.
With so many users, it’s a popular choice for advertisers, particularly those advertising on mobile. Facebook took a 16.5% share of worldwide mobile ad spending in 2013 according to research firm eMarketer, and is expected to grow to 20.4% in 2014. Overall, Facebook will take a 5.8% share of the total digital ad market this year, rising to 8% this year. That’s $11.3 billion in ad sales according to eMarketer.
But Facebook has had a fraught relationship with advertisers over the years. Things started to fall apart two years ago, when General Motors (GM) decided to pull its Facebook advertising, saying the metrics didn’t add up.
Two years is an eternity in digital and GM patched up its differences with Facebook but there is growing discontent among others. Back in March one of Forrester’s lead analysts, Nate Elliott, published a scathing takedown of Facebook as a marketing platform.
His attack relied on work done by Ogilvy, which concluded that Facebook ads reach just 6% of brand fans. This means that brands targeting Facebook users have to do it twice (once by setting up a brand presence, and then again to advertise to them) but 94% of that advertising doesn’t even reach fans – those presumably predisposed to the messaging. It’s a troubling paradox.
Facebook has since been on the offensive. You may remember Facebook’s rather dubious experiments on its users to influence their mood? While the experiments generated a ton of negative publicity, they did get one message across clearly: If Facebook can change the mood of users, then so can you.
Last week Facebook revealed its new advertising system, Atlas. It’s a system for delivering display ads to consumers, and has been around for years, and was most recently part of Microsoft, which sold it to Facebook for $100m.
Atlas had been tremendously successful, developed by the parent of digital agency Razorfish/Avenue A, and one of the main ways to serve digital ads, but had since fallen out of favour. Facebook has, “rebuilt Atlas from the ground up to tackle today’s marketing challenges, like reaching people across devices and bridging the gap between online impressions and offline purchases,” according to Erik Johnson, Head of Atlas, in a company blog.
Where Facebook wins is on mobile. In-app, Facebook knows what you are doing, and selling mobile Facebook ads is relatively easy. Atlas will extend this capability beyond Facebook’s app, and beyond Facebook itself. If you want to use Atlas to serve digital ads without a Facebook portion, then no problem.
This is significant. Remember, Facebook’s data comes from the interactions and behaviour of its users, which means, essentially, how they interact and consume content.
Facebook will remain content-driven, but it’s making a bid for more ad money, making that bid on the back of how consumers use content.
Brands need to get used to the fact that social engagement does not come from content alone. Last month Julie Fleischer, Kraft’s director for data, content and media said, “If you wouldn’t spend money behind it [Facebook], then why do it? It’s shouting into the wind without making a sound”.
The launch of Atlas also solves one of Facebook’s problems – that its ads might not work as well as they ought, by allowing ads to be served anywhere.
For those engaged in content though, nothing will change much. Facebook’s users still need to engage with content or native ads for social campaigns to work. The impact of that content may be more significant.
If Atlas is to succeed, the performance of content will influence how Facebook’s whole business runs and succeeds. More than ever, Facebook’s success depends on content.