Five key takeaways from Facebook’s Q4 report
Facebook’s Q4 earnings report revealed that mobile advertising, which Facebook only began offering a year and a half ago, now accounts for 53 percent of the social network’s overall advertising business. With a reported 556 million mobile daily active users, mobile is set to be a major driver in Facebook’s continued success.
With Facebook’s continued momentum in mobile advertising comes other areas of opportunity for brands and advertisers, including improved Custom Audiences, auto-play videos, and more effective campaign measurement capabilities.
Below, we’ve outlined the five most important takeaways from the Q4 earnings report:
1. Targeting capabilities, namely Custom Audiences, are going to be critical to Facebook’s continued revenue growth moving forward. Custom Audiences remove the dependence on traditional web-based cookies, and help advertisers connect to individuals based on more accurate identifiers (e.g. email address, phone numbers, app IDs, etc.) that are device agnostic. With more users accessing Facebook from mobile devices, we will likely see a greater focus from advertisers on using Custom Audiences to better define and better reach their target groups.
2. The outcome of Facebook’s testing of auto-play videos will have a tremendous effect on advertisers and how they approach campaigns. By promoting videos that auto-play, advertisers will be able to engage even the most passive users directly in Facebook’s News Feed, tell a more complete story through video, and recommend additional content once the video ends. Videos are already high ad performers on Facebook, despite being click-to-play. SHIFT clients that have promoted videos have seen much higher engagements and sentiment. The launch of auto-play videos should only improve performance.
3. A challenge for all advertisers, across all media types, is measuring the tangible results of campaigns. Facebook is investing heavily in improving their measurement capabilities, and continuing to do so will only prove the platform’s impact on sales conversions. Several years ago, Facebook faced a similar challenge with their targeting capabilities. At the time, they invested heavily toward improving that area of their business; today they have a robust set of options that help advertisers reach highly targeted audiences. We expect that their measurement capabilities will follow a similar path.
4. With the recent announcement of Paper, Facebook is clearly putting together a strong suite of mobile-focused products and features. At some point in the near future, these advancements will provide a holistic user experience, while offering advertisers a more effective platform to reach their target audiences. Paper will join a stack that includes Messenger, Instagram, Video Calling, app deep linking, and in-app mobile ads, among others. Meanwhile, Facebook is creating an integrated solution for things that are currently done through separate tools, thus creating a more positive experience for users while keeping them on the Facebook platform. This will lead to more time spent on Facebook, more engagements, and enhanced user data; all of which will provide a better environment for advertisers to serve the best ad types to the right audiences.
5. The massive year-over-year growth in Facebook’s mobile usage opens the door to new possibilities for advertisers. One interesting direction that Facebook could go is real-time location-based targeting. There are individual vendors currently providing solutions for micro-granular targeting, but often these require a large initial investment, hardware installations, separate software, and are limited in physical range. If Facebook can begin targeting their 1.23B MAUs based on real-time locations, without requiring check-ins, advertisers could serve even more relevant ads to consumers at scale. For DR advertisers specifically, this means reaching users with a higher than average likelihood of converting.
James Borow is the co-founder and CEO of Facebook Strategic Preferred Marketing Developer SHIFT, the real-time marketing platform of choice for 10 of the top 20 global advertisers.