Are Meta’s Problems as Bad As They Seem for Advertisers?

Are Meta’s Problems as Bad As They Seem for Advertisers?

by Héctor Ariza Facebook Instagram Meta

Just when you think things couldn’t possibly get worse for Meta, along comes another disastrous earnings announcement. On October 26, Meta, the parent of Facebook and Instagram, announced third-quarter earnings characterized by declining revenue and profits.

Quarterly revenue was $27.7 billion, down more than 4 percent from a year ago, after Meta posted a 1 percent decrease last quarter. Advertising revenue came in at $27.2 billion, down nearly 4 percent year-over-year (although that figure beat analysts’ estimates of $26.9 billion). Since advertising represents 98.2 percent of the company’s total revenue, the revenue drop is especially worrisome for Meta.

So, what’s causing the meltdown?

Weakening Demand

The biggest factor: diminishing demand for ad products caused by market uncertainty. In a call with investors, CFO Dave Wehner cited “weak advertising demand, which we believe continues to be impacted by the uncertain and volatile macroeconomic landscape.” CEO Mark Zuckerberg added that “. . . it’s not clear that the economy has stabilized yet so we’re planning our budget somewhat more conservatively.” As a result, Meta predicted that ad revenues will be $30 billion to $32.5 billion for the fourth quarter, below analysts’ expectations of $32.2 billion. (That level would represent another decline from a year ago, when total revenue was $33.67 billion.)

The TikTok Factor

The company, like Google, also faces rising competition from TikTok, whose popular short-form videos have generated a sharp increase in advertising revenue. According to Statista, TikTok generated $4 billion in advertising revenue in 2021, a figure that is expected to double by 2024 and triple by 2026. Digiday reported recently that ad agencies are shifting content creation from Instagram and YouTube to TikTok. In April, Insider Intelligence predicted that TikTok’s ad revenue will grow 184 percent to nearly $6 billion in 2023 (that amount tops Twitter and Snap combined).

To fight TikTok, Meta has given priority to the development and growth of Reels, its short-form video format on Facebook and Instagram. Meta is now seeing 140 billion Reels plays across Facebook and Instagram each day, which is a 50 percent increase from six months ago, according to Zuckerberg.

But Reels doesn’t monetize as effectively as the company’s other types of content. So, as Meta pivots toward showing more short-form video, Meta is taking a quarterly revenue headwind of more than $500 million, Zuckerberg told investors. Meta expects to get to a more neutral place with this shift within the next 12 to 18 months.

“As Reels grows, we’re displacing revenue from higher-monetized surfaces,” Zuckerberg told investors. “That’s clearly the right thing to do.”

The Apple Factor

Meta continues to grapple with the fall-out of Apple’s privacy controls, known as App Tracking Transparency (ATT). Meta said its average ad price decreased 18 percent on the year, as it adjusts to Apple’s changes that make it harder for Meta to track users and serve them personalized advertising. In the same quarter last year, the average price per ad climbed 22 percent.

But Meta also said that the blow to ad revenue caused by ATT is diminishing. Per CFO Dave Wehner, “Consistent with our expectations, the headwind to year-over-year growth from Apple’s ATT changes diminished in Q3 as we lapped the first full quarter post the launch of iOS14.5.”

But Apple isn’t done punishing Meta. Apple recently changed its App Store terms to take a portion of social-media advertising revenue. The policy change requires users and advertisers to make an in-app purchase when they pay to boost posts in apps like TikTok and Meta’s Instagram. Apple takes a commission of as much as 30 percent on in-app purchases, meaning a company like Meta would lose a portion of its ad revenue to the iPhone maker.

The company also faced stiff criticism from investors over its continued push into the metaverse, which has cost the company billions of dollars. Although the company’s metaverse investments technically do not affect its ad revenue – they’re more of a drain on profits than anything else – they have raised concerns that Meta is taking its eye off its core social media growth engine in the web 2.0 world.

The Good News

But on the bright side, Meta reported that:

  • Daily Active Users (DAUs) for the quarter were: 1.98 billion versus 1.98 billion expected, according to StreetAccount. That was up from 1.97 billion three months ago. 
  • Monthly Active Users (MAUs): 2.96 billion versus 2.94 billion expected, according to StreetAccount

Meta said Instagram now claims more than 2 billion monthly active users, while WhatsApp’s user base has surpassed 2 billion daily active users, with North America being the messaging app’s fastest-growing region.

What This Means for Advertisers

So, what does all this mean for advertisers? Well, now might be an opportune time to advertise on Meta, with its user base being strong and average ad prices decreasing. The company is rolling out new ad products to improve the monetization of Reels, and a new “Performance 5” framework, which is a set of five data-proven tactics that can help to improve advertising performance on Meta platforms amid tighter privacy controls. For instance, broad targeting consists of an automated targeting approach that reportedly produces better results for Facebook and Instagram ads than more refined, more niche audience approaches.

Meta, like its competitors, faces some difficult times amid economic uncertainty. But businesses that are taking the long view with their advertising efforts may turn out to be the winners so long as they don’t push the brakes on their online advertising efforts.

Contact True Interactive

To succeed with social media advertising, contact True Interactive. We have extensive experience helping businesses succeed on social media.

Meta Misses the Mark; How Should Advertisers React?

Meta Misses the Mark; How Should Advertisers React?

by Beth Bauch Facebook Meta

Over the years, Facebook has been a Teflon brand. No matter how many controversies and setbacks the company has faced, it has seen its stock price and market capitalization soar. But all that changed on February 2 when Facebook’s parent company Meta announced earnings for the fourth quarter 2021. The company:

  • Missed its earnings estimates.
  • Reported that Facebook’s global daily active users declined from the previous quarter to 1.929 billion from 1.930 billion. Although Facebook has experienced drops in the United States before, this was the first time the world’s most popular social platform had experienced a decline in its user base.
  • Forecast weaker-than-expected revenue growth for the next quarter.
  • Said that the company would suffer a $10 billion revenue hit in 2022 because of the impact of Apple’s iPhone privacy controls launched in 2021.

Investors were stunned. The next day, Meta suffered a 26 percent drop in its stock price – the largest single-day drop in history. Not just for Meta. For any company.

Companies can have a bad quarter. But why did Meta suffer a historic drop in its stock price? There is no single, clear-cut answer. But a few factors no doubt played a role:

  • The drop in users, although not massive, stoked concerns that Facebook is finally beginning to feel the impact of its ongoing brand safety controversies and indifference from the growing Gen Z population. Losing members can be a red flag for advertisers, and Facebook needs advertising revenue to succeed.
  • Meta surprised investors by saying it still has not recovered from the impact of Apple’s consumer privacy controls. In 2021, Apple altered its operating system to require apps to get a person’s permission before tracking their data across apps or websites owned by other companies for advertising, or sharing their data with data brokers. This move curtailed the ability for advertisers and ad platforms such as Facebook to target digital ads across the web. Ad platforms such as Snapchat and Twitter said that the restrictions were either not hurting them or that they had figured out satisfactory ways to keep creating effective ads despite the existence of the privacy controls. It was alarming to hear that Meta had not figured out a solution yet.
  • Meta’s big bet on the next generation of the internet, the metaverse, is costing the company – a lot. Meta said that the company spent $10 billion in 2021 on various products that form the building blocks of the metaverse. That spend hurt profits. And the metaverse is still many years away, which has made investors ask: just how much is the metaverse going to cost Meta?

Even still, Facebook achieved $33.67 billion in ad revenue for the quarter, which was better than expected. Should Facebook’s advertisers be concerned? As an agency that helps many businesses build their brands and convert customers through Facebook advertising, we believe that if you advertise on Facebook, you should:

  • Keep advertising on Facebook if you are satisfied with your results so far. Based on our client work, Facebook continues to drive conversions even though the cost per conversion has increased and conversion rates are lower. Facebook remains an efficient and cost-effective alternative to competing platforms.
  • Adapt to the new reality of Facebook advertising. One of the challenges with Facebook advertising under Apple’s privacy controls is having access to less user data for targeting various audience segments with ads. We’ve been working with Facebook to develop workarounds such grouping our clients’ target audiences together to give the Facebook algorithm more data to work with a (as opposed to breaking up audiences into separate groups). We’ve also removed audience exclusions from campaigns. After we aggregated audience data and removed exclusions, we gradually began to see an improvement in ad conversions following a drop resulting from the privacy controls.
  • Keep an eye on the decline in users. Understand where they’re going when they leave Facebook. In particular, Facebook said that TikTok has emerged as a much stronger competitor. TikTok is especially red hot with the Gen Z generation. In addition, monitor sentiment among your audiences, foremost your customers. In light of Facebook’s ongoing controversies over privacy and the publication of harmful content, are your customers expressing concern? Is your brand safety at risk? (This may or may not be the case. As we’ve blogged before, social media will always be a messy place to live, and many brand have learned to live alongside that reality.

Advertisers have more choices than ever – emerging apps such as TikTok, retailer ad platforms such as Amazon Advertising, to name a few. The well-established ad platforms such as Google continue to launch new products. As always, we urge advertisers to stay on top of the evolving market. At True Interactive, we advocate for our clients by understanding how the ad industry is changing so that we can maximize clients’ return on ad spend. Contact us to learn how we can help you.

Photo by Dima Solomin on Unsplash

Why Facebook Launched Shoppable Groups

Why Facebook Launched Shoppable Groups

by Taylor Hart Facebook

We all need a little help from our friends, and Facebook is leaning into this reality with its Shops in Groups. The social networking behemoth has announced that it will be making it easier to shop for products on the app, using connections with friends and trusted creators to gain inspiration — and find just the right gift. This development underscores how important social media is becoming as the holiday shopping season ramps up.

Facebook Announces Shoppable Groups

Facebook describes its mandate this way: Facebook wants to introduce new tools to “make shopping and buying better on our apps.” And Shops in Groups allows users to support the communities they are interested in by buying products from them. One example? Shops in Groups makes it possible for members of OctoNation, an octopus fan group on Facebook, to directly purchase stickers, mugs, and apparel related to their passion for the eight-limbed mollusks.

TechCrunch describes the new feature as follows: admins of Facebook groups can essentially set up an online store on their associated Facebook Page, and the admins can determine where the money goes. In the case of OctoNation, mentioned above, profits go straight to OctoNation’s nonprofit. And as Yulie Kwon Kim, Meta’s VP of Product Management, notes, the shops can offer a revenue stream to group admins, who tend to be volunteers. She says, “The money goes to the group admin, and they can decide how they want to use it. This is a great way for people to sustain and keep the group going.”

The feature appears to have legs: Ad Age reports that after testing on a smaller number of groups, Facebook is opening up shoppability to another 100,000 groups. And it’s worth noting how flexible the setup can be: groups can link to sites such as a Facebook Shop, Shopify store, or BigCommerce store. Making Groups shoppable is important because, as Facebook points out, more than 1.8 billion people are using Facebook Groups every month.

Facebook Shoppable Groups in the Context of Social Shopping

Facebook is tapping into the rise of social shopping — also known as social commerce. As we’ve blogged, social shopping accelerated in popularity during the pandemic — and it’s showing no sign of slowing down. Social media has evolved along with this trend, working to meet the needs of users who are inspired by what they see online.

The numbers are telling. According to ChannelAdvisor, 57 percent of people aged 26 to 35 had researched a product on Facebook. People on Facebook are not only receptive to social shopping, they are actually doing it. And according to Retail Dive, a whopping 87 percent of Gen Z will be looking to social media for shopping inspiration.

chart showing Instagram usage

Facebook is determined not to miss out on this trend. Moreover, the tech giant wants to give people more reasons to stay engaged with Facebook and use its advertising products.

What Brands Should Do

What does this mean for your brand? We suggest:

  • If you sell products online, consider Facebook as more than an advertising platform. Learn more about features such as Shops in Groups.
  • Master Facebook advertising products that appeal to people on Facebook (or find a partner who can do the heavy lifting for you – we manage Facebook advertising for our clients). The platform is clearly committed to making itself more engaging and useful to users: consider how that investment might benefit your brand.
  • As ever, don’t put all your eggs in one basket. Balance your online presence between the major platforms that offer value in advertising — and shoppability.

Contact True Interactive

Eager to explore what Facebook — and other platforms — have to offer your brand? Contact us. We can help. Learn more our social media expertise here and our experience with shopping tools here.

Photo by John Schnobrich on Unsplash

How Will Facebook’s Reputation Problems Affect Advertisers?

How Will Facebook’s Reputation Problems Affect Advertisers?

by Kurt Anagnostopoulos Facebook

Unless you’ve been living under a rock, by now you know that Facebook announced the creation of a parent brand known as Meta. Facebook still keeps its name to refer to the social media app. But Meta now coordinates Facebook, WhatsApp, Instagram, and other brands that Facebook has been launching or buying over the years. The announcement cast a spotlight on the fast-growing metaverse. But it also drew attention to Facebook’s ongoing reputation problems, which became more intense in recent weeks with the publication of the Facebook Files in The Wall Street Journal. Many branding experts and industry watchers asked whether the name change will help Facebook overcome its latest reputation crisis. I have another question: how much of a threat is Facebook’s (now Meta’s) reputation crisis in the first place?

According to the Facebook Files, Facebook has knowingly allowed its algorithm to publish harmful and divisive content on users’ news feeds. The accusations have been supported by documents shared by a former employee turned whistleblower, Frances Haugen. She has also shared her findings with Congress. The blowback has been strong. Legislators have accused Facebook of subverting democracy. Facebook bashers have vowed to stop using the app.

But what will advertisers do?

This is an important question. Obviously this is not the first reputation crisis Facebook has encountered — and I’m referring specifically to the social app Facebook, not Meta, WhatsApp, or Instagram. On at least one occasion, some advertisers have responded by boycotting Facebook temporarily or permanently. But Facebook’s advertising growth suggests that the company’s reputation problems have not resulted in a long-term advertising decline. Here are two reasons why:

Advertisers Are Used to Conflict

The fact that a publisher and aggregator of news content (which is what Facebook does) knowingly shares divisive information is not exactly shocking news to advertisers. Mainstream news media have been attracting audiences by publishing divisive content for decades, long before the internet existed. And they’re doing so today. As a result, advertisers probably have a higher tolerance for conflict than Facebook’s critics do. This, to me, is the most powerful and compelling point to bear in mind. Advertisers don’t want their ads to appear alongside inappropriate content. But no one is accusing Facebook of allowing that to happen. The existence of controversial content, in and of itself, probably won’t be enough to create an advertising exodus. So long as Facebook manages brand safety well (a problem that has vexed apps such as YouTube), advertisers will tolerate conflict.

It’s All about the Audience

Facebook’s strategy of building and engaging users has angered critics, but it has also helped Facebook build a bigger user base. This chart from Facebook’s latest earnings announcement is telling:

Facebook UsersAdvertisers are looking at these numbers, too. More users on Facebook is obviously attractive to advertisers. They’re going to go where the users go. It’s a simple as that.

The Real Threat to Facebook

Based on advertiser behavior, the bigger threat to Facebook consists of stronger privacy controls – especially from Apple. As widely reported, Apple rolled out an update to Apple’s operating system in 2021 that included an important privacy control known as Application Tracking Transparency (ATT). ATT requires apps to get a user’s permission before tracking their data across apps owned by other companies for advertising, or sharing their data with data brokers. Apps can prompt users for permission, and in Apple Settings, users can see which apps have requested permission to track so they can make changes to their choice at any time.

Advertisers have feared that ATT will trigger an uptick in users opting out to having their behavior tracked. Consequently, advertisers will have a harder time serving up targeted ads because they cannot track user behavior. This concern is well founded. As many as 96 percent of users in the United States are opting out of having their behavior tracked. And as a result, social apps have (so far) lost $10 billion in ad revenue. Facebook itself forecast a pullback in ad revenues for the fourth quarter because of the significant uncertainty it faces in the fourth quarter in light of continued headwinds from Apple’s iOS 14 changes.

If you advertise on Facebook, I’d love to hear your thoughts on this topic. What factors might influence your choices going forward?

Contact True Interactive

To succeed in the dynamic world of online advertising, contact True Interactive. We help businesses succeed with relevant and engaging advertising. Read about some of our client work here.

 

Why Facebook’s Ad Business Will Take a Hit — and What Advertisers Should Do

Why Facebook’s Ad Business Will Take a Hit — and What Advertisers Should Do

by Mark Smith Apple Facebook Uncategorized

On September 22, Facebook made an unusual announcement well ahead of its third-quarter earnings, which won’t be shared until late October. In a blog post, Facebook indicated that its third-quarter results will take a hit because of the impact of Apple’s increased privacy controls. Let’s take a look at the news and what it means.

What Facebook Announced

  • Facebook confirmed that for the third quarter, the company’s advertising business will take a financial hit because of the impact of Apple’s Application Tracking Transparency (ATT), which went into effect in 2021 with a recent iOS update on users’ personal devices.
  • Under ATT, users are asked to give apps permission to track their behavior on their Apple devices. Facebook needs Apple users to give apps permission to track their behavior; Facebook has built a thriving advertising business based on its ability serve up targeted ads to iOS users based on their behavior off Facebook. But as many as 96 percent of users in the United States are opting out of having their behavior tracked.
  • In a blog post, Graham Mudd, vice president of Product Marketing, Facebook, wrote, “As we noted during our earnings call in July, we expected increased headwinds from platform changes, notably the recent iOS updates, to have a greater impact in the third quarter compared to the second quarter. We know many of you are experiencing this greater impact as we are.”
  • Mudd also said that Facebook underreported iOS web conversions by approximately 15 percent. “We believe that real world conversions, like sales and app installs, are higher than what is being reported for many advertisers,” he wrote.

What Facebook’s Announcement Means

  • Facebook’s war with Apple will intensify. Apple could find ways to impose even more privacy controls.
  • More advertisers will bolt to the Android operating system and take their ad business to Google.
  • Facebook will be forced to become more transparent to ad partners about its ad performance, especially after admitting that the company underreported iOS web conversions.
  • Facebook will probably devise more ways to mine first-party data from its own platform and Instagram to sell ad space.

What Advertisers Should Do

  • Consider tapping into your own first-party data more effectively to create ads (and True Interactive can help you do so). For example, collect more first-party data by using cookies to understand who visits your site; or run a promotion that collects email addresses. Collect purchase data if applicable to your site.
  • Consider relying on advertising platforms such as Amazon and apps such as Snapchat and TikTok that have strengthened their own ad products through their own proprietary first-party data.
  • Watch for the emergence of new tools and approaches. Apple’s ATT will inspire the emergence of workaround tools as well as approaches for developing personalized content. This is happening already as Google adopts privacy controls.
  • Review Facebook’s advice for how to analyze your performance and adapt your ad strategies on Facebook (or ask your agency partner to do so for you). Mudd provided some detailed steps to take in his post.
  • Consider negotiating more favorable rates for your ad account with Facebook if your performance is dropping but you still want to work with Facebook.
  • Don’t panic and change your ad strategy completely. This situation is still evolving.

At True Interactive, we’re doing the heavy lifting to help our clients navigate these changes. Bottom line: be ready to adapt.

Contact True Interactive

To succeed with online advertising, contact True Interactive. Read about some of our client work here.

Facebook Reels: What Brands Need to Know

Facebook Reels: What Brands Need to Know

by Clare O'Shea Facebook

One year after Instagram announced the debut of short-form video feature Instagram Reels, parent company Facebook is joining the party. Reels first debuted on Instagram in 2020 in a clear bid to compete with TikTok. Facebook, having recently announced its plans to test Facebook Reels in the United States, is now figuring out ways to make Reels a more popular feature on Facebook itself (the U.S. initiative is an expansion of testing already launched in Mexico, Canada, and India). As part of the test, Instagram users can cross-post their reels to Facebook.

What do these developments mean for your brand? Read on to learn more.

What Is the Reels Feature?

When Reels rolled out on Instagram in 2020, the video time cap was 15 seconds, but the feature has since grown, and grown again: videos can now be up to one minute long. Using Facebook Reels, people can watch others’ videos, as well as create/share their own reels from the Facebook app. The feature’s reason for being? To allow people to “express themselves, discover entertaining content, and to help creators broaden their reach.” According to Facebook, almost half of time spent on the app is devoted to watching videos. Pair this data with the statement that Reels is growing “especially quickly,” and the test run of Facebook Reels makes a tremendous amount of sense. As CEO Mark Zuckerberg told investors, “We’re very focused on making it easy for anyone to create video, and then for those videos to be viewed across all of our different services, starting with Facebook and Instagram first.”

As Zuckerberg implies, emphasis is on creativity and its possibilities. Facebook Reels users have access to creation tools much like those already available on Instagram: video capture, for example, as well as camera roll import, timed text, and music selection. Editing tools allow people to speed up or slow down their video, and to incorporate augmented reality effects from Facebook or third-party developers. And after creating a reel, users can decide how to share it: with select friends, or the default share, which is the general public. As is the case throughout Facebook, Reels will be recommended to people based on their interests, who they engage with, and what’s trending as popular.

Why This News Matters

Facebook’s efforts speak to deeper trends and resonances. For one thing, the news demonstrates the tremendous sway TikTok holds in the social world. TikTok enjoys approximately one billion monthly active users. Sixty percent of TikTok users hail from Gen Z, soon to become the largest generation. Furthermore, TikTok users of all ages have proven themselves to be ardent fans, spending an average of 52 minutes per day in the platform and opening the app roughly 8 times per day. Eighty-three percent of TikTok users have posted a video. Facebook understands and respects these stats, and is responding accordingly.

The news also underlines the growing importance of video. As noted above, video accounts for  a major chunk of time spent on Facebook. And on Facebook’s latest earnings call, Zuckerberg pointed to Reels as “the largest contributor to engagement growth on Instagram.” In short, videos are hot.

Reels represent a possible advertising opportunity. While Facebook told TechCrunch that Reels on Facebook don’t currently include ads, the plan is “to roll out ads in the future.” Instagram, which has already begun to monetize Reels through ads, is showing what that might look like for Facebook down the road.

Finally, Facebook’s actions underscore the growing influence of individual creators. Consider the fact that in July, the social networking behemoth announced a plan to invest more than $1 billion in creators across both Facebook and Instagram through 2022. The platform’s willingness to shell out that kind of cash speaks to a fundamental belief in influencers’ power.

What Brands Should Do

What do these developments mean for brands? We recommend that you:

  • Embrace video, especially short-form video. Facebook is certainly demonstrating its commitment to the form. And as we blogged earlier this year, apps such as YouTube are launching short-form video options such as YouTube Shorts.
  • Look for advertising opportunities. Reels may not include ads on Facebook yet, but as noted above, the landscape is constantly evolving. What opportunities for advertising on video features exist today?
  • Understand that influencers hold a lot of sway. Consider how you might partner with individual creators to do influencer outreach for your brand.

Contact True Interactive

Pondering the role video might play in your brand’s strategic plan? Contact us. We can advise.

Why Advertisers Should Never Bet Against Facebook

Why Advertisers Should Never Bet Against Facebook

by Taylor Hart Facebook

Facebook has done it again. On April 28, the company announced quarterly earnings that crushed Wall Street’s expectations, demonstrating a remarkable resilience. Facebook continues to ascend as a premier advertising platform, too, second only to Google in terms of online ad marketshare. Let’s take a closer look.

What Facebook Announced

Facebook’s quarterly results were impressive by any measure:

  • Earnings: $3.30 per share vs. $2.37 per share forecast.
  • Revenue: $26.17 billion vs. $23.67 billion expected.
  • Daily active users (DAUs): 1.88 billion vs. 1.89 billion forecast by FactSet.
  • Monthly active users (MAUs): 2.85 billion vs. 2.86 billion forecast by FactSet.
  • Average revenue per user (ARPU): $9.27 vs. $8.40 forecast by FactSet.

The increase in active users is key. Demonstrating that it can continue to grow its user base helps Facebook attract more advertisers.

Why Facebook Is Succeeding

Why is Facebook continuing to grow quarter after quarter even amid controversies and threats from legislators and competitors? Here are some reasons:

  • Advertisers remain loyal to Facebook. Facebook said its impressive revenue growth came from a 12 percent increase in the number of ads delivered – and a 30 percent year-over-year increase in average price per ad. Even as businesses were being rocked by the pandemic and faced an uncertain year, they were willing to pay more for ads on Facebook. And why not? Social media platforms such as Facebook enjoyed tremendous growth in 2020 as the pandemic drove more people online. Advertisers wisely went where their audience was.
  • Facebook is monetizing its user base beyond ad targeting. This is important. By its own admission, Facebook’s ability to deliver targeted ads is being threatened by Apple’s app tracking transparency privacy initiative in which users of iPhones will now need to agree to allow a business to collect information about them – known as an opt-in policy. The world’s largest social network is upset because its advertisers will have a harder time tracking its users off Facebook and serve up personalized ads to them. But Facebook has been steadily finding different ways to monetize its app (and Instagram’s) beyond ad targeting. For instance, in its earnings announcement, Facebook CEO Mark Zuckerberg discussed how the company continues to build social commerce features. And Facebook’s Marketplace service, where users can buy and sell goods, continues to grow. These features keep businesses and people engaged on Facebook, generate more ad revenue for Facebook, and give Facebook a stockpile of first-party search and purchase data to deliver more personalized experiences.

Going forward, Facebook will continue to monetize that user base in creative ways – an example being the launch of several audio features that will generate revenue for creators and inevitably create a more engaged user base – which generates more advertising revenue.

 What Advertisers Should Do about Facebook

  • Continue to capitalize on tools to help you connect with your audience on Facebook. For instance, as Mark Zuckerberg mentioned to investors on April 28, Facebook launched Shops in 2020 to help businesses more easily conduct online commerce, and there are now more than 1 million monthly active Shops and over 250 million monthly Shops visitors.
  • As always, balance your advertising among the major platforms that continue to deliver value, including Amazon Advertising, Facebook, Instagram, Google, and Microsoft Advertising.
  • Monitor expected privacy legislation and the impact of Apple’s ATT initiative, but don’t overreact. Facebook continues to show a remarkable aptitude for managing threats from competitors and legislators.

Whatever you do, don’t count out Facebook regardless of what you read and hear about the headwinds the company faces. Facebook is not going away. It’s the world’s largest social media network for a reason. Follow your audience and engage with them.

Contact True Interactive

At True Interactive, we help businesses capitalize on social media advertising to build their brands. We can help you, too. Contact us to learn more.