“Data-Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Michael Caccavale, CEO at Pluris Marketing.
Facebook is one of the biggest publishers in the world, but the company is still looking up at Google when it comes to digital advertising. Google has more than 31% of the global market for digital ads, with Facebook a distant second at 7.8%.
Two of Facebook’s recent business decisions aim to change that, as the company focuses efforts on becoming both an ad network and ecommerce platform. But is Facebook biting off more than it can chew?
Doubtful. The social network is making all the right moves. With its new Buy button and revamped ad network, Facebook is positioning itself well to sell ads inside and outside its walls.
Facebook’s Recent Moves
With the launch of its Buy button, which is powered by a partnership with Stripe, Facebook is letting people pay for ecommerce purchases from other businesses without leaving its site or application. Twitter introduced a Buy button of its own, but it will have hardly the impact of Facebook’s.
Facebook also wants to be the de facto ad network for consumer targeting outside its walls. With the launch of Atlas, Facebook will use its data to sell ads on other sites.
I think Facebook feels it can do digital consumer targeting and deliver retail conversions better than anyone because of its robust data set.
In addition to the obvious double-dipping revenue model Facebook is building on- and off-site, the tech juggernaut has been broadly applauded for helping advertisers better target and confidently attribute ad impressions across the web.
Going Cross-Channel
So what’s happening here?
There’s a term for what Facebook is doing that isn’t mentioned: cross-channel optimization. Facebook is trying to help brands and retailers establish omnipresence across websites and devices as part of a new solution called “people-based marketing.” What it’s really doing is entering the cross-channel marketing space.
Sure, Facebook is competing with Google, from a publisher and display-ad standpoint, but the ad network e-commerce business it’s getting into is complex territory that will bring serious challenges.
It’s important to compare Facebook’s moves to market needs and what marketing technology providers have already been delivering for some time.
The marketing campaigns run by major brands, retailers and creative agencies are complex. There are messaging maps that parse the message out into pieces for each demographic set. There’s a certain cadence you want to find for each user on one site vs. another. There are hundreds of nuances to take into account when approaching people across different channels.
Facebook is saying all the right things – “We know where people are in a cookie-less mobile world” – but how is it delivering cross-channel messages and giving brands the return they expect? Despite what you may hear, retailers are reluctant to invest in digital advertising, particularly on mobile, and there’s still nothing new Facebook is saying to change that reality.
Sure, Facebook understands what its own users like, but is it ready to deliver the right message to the right people at the right cadence on websites where it doesn’t collect data?
Maybe. Facebook will need the help of other publishers, who will have to decide how much data they want to turn over. If Facebook can enter the market and own data both inside and outside its walls, it’s game over for Google.
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