What Facebook’s earnings mean for businesses
Kristina: Moving forward, how important is Facebook for brands?
Brad O’Brien, Senior Director of Paid Social, 3Q Digital: Facebook is going to continue to be hugely important for brands moving forward. Over the last few years, Facebook has proven its ability to drive efficient and profitable new customer acquisitions and retain and re-engage customer segments across a variety of industries. Even if you’re not actively advertising on Facebook, people are talking about your brand on the platform, and you should always join in the conversation. The move to a pure “pay-to-play” model was a frustrating one, as organic reach dwindled down to zero. And yet, brands are still paying to get their content in front of their own fans. That says a lot about the platform’s ability to engage in a way that is truly unrivaled by any other platform.
Kristina: It seems lead ads and video are showing solid performance – what makes these two areas so consumer friendly?
Brad: Lead ads allow a user to submit their information all within Facebook’s native platform. Using profile data (public and private), a user can auto-fill fields such as name, email, phone number, etc. Especially on mobile, Facebook took the daunting task of form filling and made it more accessible to the average consumer. Facebook has also instituted new and exciting additions to lead ads, like ‘complete later on desktop’ which will prompt the user to continue filling out a form they started on mobile. For advertisers, Facebook is keeping them excited about the product by introducing Lead Ads for desktop, as well as context cards and continued flow. They’re taking a new product that has shown a lot of promise across industries, and improving upon it at a rate which is faster than average for Facebook’s product development cycle.
Kristina: Let’s break down the numbers a bit more. There is a reported 247% increase in spend. Could you expand on that?
Brad: Advertisers are continuing to see year over year success on the platform, and securing more of their available ad dollars for the platform. What’s exciting to a Social marketer like myself, is that while its highly unlikely that a brand’s marketing budget increased 247% YoY, the platform is commanding a larger percentage of overall marketing mix spend.
Kristina: What about the 25% CPM increase and the 177% increase in impressions?
Brad: In an increasingly expensive marketplace, advertisers need to go above and beyond to “stand out” in the newsfeed. If not already doing so, an investment in several rounds of creative iterations are absolutely paramount moving forward. Also, advertisers will need to get even more sophisticated about who they are targeting on Facebook. With a higher buy-in threshold, you should ensure you know exactly who you’re talking to and what action you want them to take through Facebook.
Kristina: There is also a 12% increase in CPA, and a 34% increase in CTR.
Brad: This is not surprising, as increased scale on Facebook typically comes with some level of increase in CPA. What advertisers will have to balance is how much of an increase in CPA they’re comfortable accepting on the platform, in their pursuit of large scale on the platform. [The increased CTR] is also a result of the switch towards much more mobile percent of spend. Mobile users always have a higher CTR on Facebook. Advertisers can no longer afford to have a sub-optimal mobile experience. They should invest heavily into the UI/UX of their mobile site and mobile applications.
