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Looking Ahead: The Future of Facebook Ads

For brands, Facebook remains one of the preeminent sources for reaching potential customers.

By Chad Recchia

For brands, Facebook remains one of the preeminent sources for reaching potential customers.

The social network ranks only second to Google as the second largest digital publisher in the world. Facebook also boasts unparalleled targeting capabilities that allow advertisers to engage with its roughly 1.4 billion monthly active users.

How successful are ads for Facebook’s business strategy? This year alone, it is expected to bring in a little more than $36 billion in worldwide ad revenue. That is a projected 35-percent increase from their advertising earnings in 2016 according to a recent report from eMarketer.  

But like the rest of its competition in the digital space, Facebook is continuing to evolve in order to keep up with the times.

The changing relationship between users and the Facebook news feed

Facebook has existed since 2004, but it wasn’t until two years later that it launched one of its most recognizable features.

The news feed.

During the course of its 11-year history, the Facebook news feed has undergone numerous changes. One of its biggest facelifts to date was the incorporation of ads in 2012.

Despite its success driving ad revenue through the news feed, eMarketer says Facebook believes an “upper limit” will soon be reached when it comes to serving ads there. Ad load on Facebook is a major factor marketers should be considering when it comes to the effectiveness of branded content on the news feed.

Another consideration for brands is the idea of “feed fatigue”. Though data from eMarketer suggests that active user count and time spent on Facebook is rising, there’s evidence that people are becoming weary of the endless stream of content provided by the news feed.

“This has been the main source of ad revenue for Facebook for the past five years,” eMarketer analyst Debra Aho Williamson said on a recent episode of the Behind The Numbers podcast. “And advertisers have grown used to advertising in the feed. They’ve learned how to stand out in the feed, how to develop ad products, advertising messages that people might catch repeated attention.

“And now, with the limit being reached, advertisers are faced with questions of ‘Okay, what’s next? What’s Facebook’s act two going to be beyond the feed?”

Facebook explores other opportunities

As the dynamic between Facebook users and the news feed changes, the social network is actively exploring a variety of options for advertisers to reach customers.

Acquired by Facebook in 2012, Instagram is one such platform that has tremendous long-term, advertising upside. Usage on Instagram continues to increase according to eMarketer data. In the United States alone, the photo/video sharing social network will have 77 million monthly active users by the end of 2017, which would mark a 12.5 percent increase from the previous year.

When it’s come to implementing ads on Instagram, Facebook has shown a willingness in recent years to incorporate and expand marketers’ capabilities. The multimedia-based social network rolled out its own take on Snapchat’s stories feature in August 2016. And in addition to video, photo and carousel ads, Instagram has also given advertisers access to stories for delivering sponsored content.

“Instagram, we’re forecasting, will have $4 billion worldwide ad revenue this year, which is double (from) last year,” Aho Williamson said. “So Instagram is doing well.”

Facebook Messenger has received ad treatment, too.  Last year, the tech giant launched click to message news feed ads, which take users into a chat session with business pages. In 2016, it also launched sponsored messages for Messenger – chat sessions initiated by brands to re-engage potential customers who’ve previously reached out for information.

More recently, Messenger began testing in-app ads for the mobile interface. Here’s some of what product manager Eddie Zhang said of the launch in Facebook’s announcement back in January of this year:

“Businesses have long been telling us that they are very excited about the potential of the Messenger platform to reach their customers and help them to drive sales, build brand awareness and increase customer satisfaction. Our current offerings like ads that take people to Messenger conversations from their Facebook News Feed and sponsored messages have demonstrated that people are interested in hearing from and interacting with business and brands on Messenger. In fact, people are already regularly messaging businesses with over 1 billion messages sent between people and businesses on Messenger each month.”

Facebook is also providing an added edge for advertisers through Instant Articles. Just last week, the social network announced that it was expanding the opportunity to monetize Instant Articles for all publishers. According to Facebook, Instant Articles deliver between 20 to 50 percent more traffic than mobile web content.

In the meantime, what can brands do?

Experiment and tinker.

Creativity remains a core principle for brands looking to stand out to potential customers on Facebook. Despite the changing dynamic between the news feed and users, the platform’s keystone feature won’t be going anywhere anytime soon. Continuing to create content that is engaging, and more specifically shareable, is one way for businesses stay relevant.

Strong storytelling is also important for brands trying to reach potential customers. When it comes to Facebook’s news feed, creating compelling messages that can quickly capture users’ attention is still key. But with new features like stories being introduced across Facebook’s main offerings, advertisers should also consider ways to address target audiences through longer-form content.

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