Facebook has revealed that it is paring back its advertising options and making its interface simpler for marketers.
Facebook is huge and companies are keen to use it to advertise their products or services. However, the procedure that Facebook currently uses is incredibly complicated for many potential users. It is understandable that it is complex because Facebook uses targeted algorithms so that the advertisements are only shown to people who are likely to have an interest in them, but it does put a number of companies off from getting involved. After all, there are other ways to advertise as well which may have a slighty less wide audience, but are so much easier (and therefore cheaper as time is money) to apply.
Easier Ad Units
At present, Facebook users see advertisements inside their newsfeed, as well as on the right hand side of their screen. This, in itself, won’t change but the options within those ad units will actually be very different.
What we realized is that even though every ad product is really good on its own, the whole is less than the sum of its parts. It should really be simpler,” Fidji Simo, a Facebook product manager for ads, said at an event at the company’s Menlo Park, California headquarters.
The Current Situation
Presently, advertising on Facebook really is quite a complicated affair. At present, there are 27 options available to someone who wants to advertise on Facebook. Many of these options are duplicative or obsolete and this is exactly what needs to change.
For example, Facebook provides an online Offers product to advertisers to let them drive traffic to their website or product page, but many companies just insert a link into a Facebook Page post to drive traffic, so the option to create a dedicated online offer will disappear under the changes, Facebook said.
Naturally, Facebook is keeping quiet about the exact details until they have everything in place. However, internet marketeers around the world are taking note of what is happening and are already thinking about how they will best be able to implement these new settings in their internet marketing procedures.
Many Facebook users have not even realized the hard work that the company has done over recent years. Only one year ago, Facebook entered the stock market, which turn out to be quite a big failure. However, since then, the company has continued to grow and they have done all they can to attract new businesses to Facebook. After all, offering a free service to its users means that the money has to come from somewhere. The price of the stock has grown since entering the market and they have also started to offer advertisements in the newsfeeds of mobile users. However, they are now taking it even further.
It launched a search feature in January and unveiled a branded Facebook smartphone in April. The company also introduced ways for advertisers to gauge the effectiveness of their ads. Even GM has returned as a paying advertiser.
Yet Facebook wants more. The company understands that staying stagnant is the way to sink, so they continue to build, develop and grow. Their goal, at the moment, is to ensure big companies understand Facebook advertising is as important – if not more – as conventional advertising methods. They want to be, in a nutshell, a one stop shop for internet marketing.
Understanding Facebook Finances
Facebook is innovative and risky if nothing else. There was a huge hype created when they entered the stock market and it is was largely considered a flop. This had been predicted by various financial and market experts, but Facebook didn’t seem to care. And, it now seems, for good reason. And that is really the Facebook ideal: things don’t have to work immediately, but they will have to work over time. Only one year ago, the question was whether Facebook advertising would work at all. Now, the answer is a resounding YES.
Facebook’s ad revenue for the quarter ended March 31 was US$1.25 billion, representing 85 per cent of the company’s total sales and a 43 percent increase from 2012’s first quarter. Mobile advertising revenue accounted for 30 per cent of total ad revenue.
Those are significant figures. When considering that mobile advertising on Facebook has not been around for so long yet, that 30% ad revenue total demonstrates just how well Facebook ideas work. It simply takes a little bit of time, as it always does with Facebook. One of the reasons as to why things generally take longer to work for Facebook is because it has so many users and because any changes have to phased in to their users’ newsfeeds. Besides that, people will then complain for a while before finally accepting and liking the new updates. It is at this point that the revenue really starts to appear.
And this is precisely why Facebook is going outside of mobile advertising as well. It is a case of “been there, done that”. They know it is working and will continue to provide the service, but it now needs to be bigger and better.
With consumers increasingly accessing Facebook on mobile devices such as smartphones, Facebook has scrambled to roll out new types of ad formats suited to small mobile screens. Facebook has also begun letting advertisers show ads based on users’ Web browsing history and has introduced tools that allow marketers to better measure ad effectiveness.
This really demonstrates just how powerful Facebook is for businesses that want to advertise. Facebook’s goal of showing the world that Facebook advertising is as important as any other form of advertising seems to be getting closer. However, for you as a business, whether or not Facebook is right is not as important as the question of what your revenues will be. Although there are never any guarantees in advertising and internet marketing, the simplification of the ad tool and the growth in ad figures that Facebook has provided do give you some guarantee that this can work and work well. Some say Twitter is taking over Facebook, but that is still male-dominated, meaning that there are more women – and hence shoppers – on Facebook.