Facebook Q1 Ad Developments: Long-Term Opportunities
May 7, 2015
This is an excerpt from our Facebook Q1 2015 Advertising Developments Intelligence Brief.
In our previous post, we looked at key Facebook® developments from Q1 that gave marketers new ways to reach consumers, including dynamic product ads, cinemagraphs. Below, we’ve highlighted the Q1 developments that signal longer-term opportunities for marketers to keep an eye on.
A platform for brands
What Happened: At its F8 developer conference, Facebook announced that Messenger is open to developers who can create brand experiences on the platform.
The Immediate Opportunity: Personalized consumer/business interactions
The immediate use case is for ecommerce companies. By integrating with Messenger, marketers selling their goods online have the opportunity to create 1:1 personalization with consumers. For example, a brand’s Messenger account could push updates to people while their packages travel, or let people make changes to their order with a message to the brand.
The Long-Term Opportunity: Credit card data, less friction and more buying
Facebook also announced Messenger would be adding a peer-to-peer payments layer into the platform. With simplicity similar to competing platforms like Venmo, people link card information to their account, open a conversation, click a small $ button underneath the “Type a Message” prompt and enter the amount they’d like to send. Facebook is therefore reducing friction to consumer credit card data, which could provide better insight into offline consumer shopping habits and surface how digital ads are impacting in-store purchases.
Right now, the feature is only for friends to share money in a secure way with one another. As adoption scales and more people attach financial information to their Facebook account, they will likely be motivated to use tools like the Buy button to purchase relevant products they see in their News Feed. They could then toggle back to Messenger, confirm the purchase and execute any changes or additional transactions in a chat thread with the business. This system presents great potential to streamline the way people purchase from and interact with brands online with simple, powerful and secure consolidation.
“What we want to do is make it easy to finish the conversation in the same place you started. You don’t have to switch to another app.”
– Steve Davis, Product Manager, Facebook
What About WhatsApp?
Thus far, there has been no mention that WhatsApp – the messaging service Facebook acquired in February 2014 for $19 billion – will become a marketing platform. This move reinforces Facebook’s dedication to a constellation of applications that each carry specific value.
If Facebook tried to be everything to everyone, creating a single experience that was equally valuable for all the needs of consumers, marketers, developers and investors, it could become a bloated and slow experience that leaves people searching for an alternative. Much like Instagram became the visual-only alternative to News Feed, WhatsApp can fill the void for uninterrupted chat while Messenger becomes a place to interact with brands and engage in commerce.
By creating specific experiences in a family of apps, Facebook is giving people the experiences they want without clutter. As a result, people are more likely to return to these apps, keeping the eyeballs marketers rely on from migrating somewhere else that’s more difficult to find and track.
What Happened: Facebook patented a way to identify people that drive sharp increases in share rates after endorsing a brand by liking, commenting or sharing its content.
The Long-Term Opportunity: This patent presents the opportunity to productize this concept — finding those with the greatest propensity to inspire others to endorse a brand, and charging marketers a premium CPM to reach them. This hypothetical product would be able to identify the best influencers for specific parts of a brand’s product catalogue as well. For example, if influencer marketing is productized, our marketing team could identify the influencers most likely to make our infographics go viral versus influencers most likely to make our case studies go viral.
Voice Recognition Software Wit.Ai
What Happened: Facebook acquired voice-recognition startup Wit.ai.
The Long-Term Opportunity: The more information people share on Facebook, the more signals marketers have to serve the right people the right message at the right time. By enabling people to post and send messages without even having to type, the platform could reduce friction to even more user sharing and enhance its value proposition for brands.
What Happened: Facebook started pushing local content to people near businesses like New York City’s Strand Book Store and Dominique Ansel Bakery. Location is determined using cellular networks, WiFi and GPS and in certain places. Facebook is also testing place tips using Facebook Bluetooth beacons, which send a signal to a person’s phone to help Facebook show them the right tips for the right place.
The Long-Term Opportunity: Motivating people to buy something with relevant ads as they walk past a brick-and-mortar store can unlock a lot of revenue. Place tips could create an infrastructure for brands to combine Facebook’s trove of identity information with location data to get people buying stuff they want from the physical stores around them.
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