FB’s Ad Sales Train Continues To Roll
I’ll admit it, I’ve been a Facebook denier for a while now. I have a profile but rarely go on the platform, and ever since the Cambridge Analytica data scandal during the 2016 Presidential election I’ve been sour on their ad targeting model. But holy cow is Facebook proving its ad sales doubters wrong!
Take a moment to consider these stats. Facebook’s ad revenue this year, forecast at $67B (not a typo), is more than every other ad tech platform combined, including Google’s network business, and Amazon’s DSP. And its growth rate of 25% is faster than the rest of the industry at 18%. Bottom line, if you’re in digital media sales business but not called Facebook, then your market share is shrinking.
So how does Facebook keep defying gravity to grow their business faster than the marketplace, despite negative user and advertiser sentiment? It comes down to three things – scale, targeting and engaging ad formats.
Of these three scale is the “born with” skill – Facebook just has it and most other digital publishers can’t even dream of matching them. But the real differentiators are the other two ingredients. Having a complete set of first party data is table stakes in digital media these days. Then there’s the benefit of serving ads which drive engagement. Over half of digital ad spending occurs on five apps (FB/Instagram/YouTube/Twitter/Snapchat), and none of these publishers run standard display units. Instead these leaders have forced creatives to develop custom ad units which are more likely to be engaged with. And as we know ads which are engaged with perform better, which self-reinforces brands’ decisions to spend more and more on FB.
So yes, Facebook keeps growing because of its ability to leverage a combination of assets. Now if I could just remember my FB password . . .