Facebook has predicted slower growth in their latest earnings reports. What does this mean for Facebook advertisers and what can they expect from Facebook in 2017? Boost Media shares three predictions.
1. Higher CPCs on Facebook Ads
Facebook is essentially running out of places to put ads and new users to reach out to. Twenty-two percent of the global population is already on Facebook. Once you weed out people who aren’t within the target age bracket for Facebook, and those who don’t have Internet access, it’s easy to see the challenge ahead for Facebook. Where can they grow?
Despite the predicted slowdown in growth, Facebook ad spend has gone up nearly 60%—from 4.3 to 6.8 billion in Q3 of 2016, compared with Q3 of 2015. This indicates advertisers are still seeing strong returns and will therefore want to increase investment in the platform. This increase in ad spend means more competition. It’ll be more expensive for everyone to maintain the same volume of clicks as before. This is good for Facebook and challenging for advertisers.
Advertisers who will win in the increasingly competitive Facebook Ads landscape are those with a combination of compelling creative and sophisticated optimization strategies. Strong creative produces higher engagement rates and therefore better relevance scores, which lower the CPE (cost-per-engagement).
2. Facebook TV ads and live streaming video
One way to grow business is to expand by device—from mobile, tablet, and desktop—to TV. Starting with a beta test of it’s own TV ads, Facebook is targeting ads by correlating the IP address of Roku and Apple TV users with IP addresses of Facebook profile log-ins.
Meanwhile, Facebook has launched a new ad campaign to promote it’s live streaming video, signaling the importance of this new format. With Twitter, YouTube, and other players pushing live streaming, it only makes sense for Facebook to do the same!
3. 1-to-1 Marketing (messenger and chatbots)
Facebook has made big strides in its Messenger product. It’s no longer just a chat app, but a portal to access mobile website content and make purchases. With the rise of chatbots and AI technology, the idea is to eventually have one-to-one personalized communication and customer service on a large scale, and at a low cost.
To drive users to opt into interacting with brands through Messenger, Facebook has released a new ad unit in which the call-to-action is to chat with the brand (rather than visiting the site or signing up for something).
Where to go from here
There are big challenges ahead with Facebook advertising, but these are solvable problems and we can expect to see continued growth with Facebook ad spend, improvements to the Facebook Ads platform, and ever-expanding opportunities for advertisers. Facebook Ads is maturing as an advertising platform. Marketers need to step up with increasing levels of spend, campaign sophistication, and engaging creative to remain competitive.
Check out Boost Media’s one-sheet on Digital Market Trends to Watch For In 2017.