We’re All In Hot Water: Facebook Is About to Crush The Digital Ad Market

Lou Perseghin
February 24, 2015

It’s a classic story; put a frog in a pot of boiling water and it will jump out, but put it in a pot of cool water and bring it to a boil and you can put frog legs on the menu (fun fact: science says neither is true.) The Facebook targeted ad market has been boiling for a while now, and we’re all that unsuspecting frog that hasn’t jumped out. And that’s awesome for advertisers because it means their message is hitting their audiences.

This week, Facebook began testing an ad product that, when widely launched, will challenge Google’s digital dominance on marketing products. Yet trust in the ROI of the Facebook ads ecosystem has been a slow climb; some marketers are still hesitant. But, we’ve reached the point where the dissenting voices are moving to the fringe and real money is flowing.

TV and print account for nearly two-thirds of the advertising market; as the budget-wary wring their hands for the right time to jump at social, users are awash in the warm pixelated glow of ads tailored only to us. The Facebook playbook to carve a concrete place in the ad market has been simple:

FIRST: Cut back on spam accounts, kill organic reach and kill overly promotional posts.
THEN: Build trust with users by tightening and clarifying privacy policies, build trust with advertisers by introducing more useful tools and create ever-more detailed targeting options.
FINALLY: Test new ad products with best online casino leading advertisers seemingly every month, and combat the laughably low viewability of digital advertising (50.2 percent) by claiming “in full” impressions.
THEN: Profit.

What a playbook. Gain user trust of nearly one billion active daily users (after some stumbles); then hinge the visibility of content on the ability to pay for exposure. Does it feel like you’re in hot water yet?

It’s about to get better. Testing of new product ads by Target (you’ve heard of them, no?) saw a 20 percent increase in sales conversions. Other testing indicated “360 percent higher return-on-ad spend, a 100 percent higher conversion rate and 10 percent higher average order size” according to Venture Beat.

At the end of 2014, AdWeek reported20 percent of clicks on Google search links for retailers were on Shopping Ads.” Will this new Facebook offering be a Google killer? Probably not. But smart money says it’s going to make many retailers – the ones who are willing to get in early — a lot of money.

So, if you want to be one of the businesses who gets in early, go ahead, get in touch. We’ll let you know how social advertising can be a boon to your business and how you can capitalize on these changes. What are you waiting for?