Right before our eyes, Facebook is evolving from a social interaction surrogate for brands to a mainstream video advertising medium. The $1 billion purchase of Instagram has given the company a swath of prime real estate on the mobile Internet, and the promised rollout of 15-second videos will undoubtedly open the floodgates for brands.
At the same time, another trend is at work. Our company recently conducted a study of approximately 10 million opt-in video views across the Web, tablets, and smart phones. The data show that brands are becoming less likely to drive viewers to Facebook after watching videos. In fact, post-campaign traffic to Facebook is down 14 percent compared to the same time last year with clicks to brand websites up 13 percent. This represents a significant change in advertiser perception of Facebook, and there are a number of reasons why it’s happening.
“Likes” Are Not a Clear Indicator of Success
On Facebook, advertisers have long equated “likes” to social success. While the action is certainly is an indicator of engagement, it is also famously difficult to quantify. Brands hungry for attention and two-way interactions have been enamored of the like tool, but our study indicates that their investments have not been paying tangible dividends.
Brands Want to Own Their Audiences
Seemingly, every year Facebook makes a sweeping change to its news feed algorithm and drastically cuts or modifies a brand page’s reach. Brands have realized that they can achieve the same level of fan engagement and aggregation on their own properties. By directing fans to their own sites, rather than to Facebook, brands have greater control over the content, and they are privy to a higher-level of insight. Also, by moving their fans off of Facebook and onto their own sites, advertisers have viewers’ complete attention. They do not have to compete with other ads, and they don’t have to spend precious resources promoting the “F”.
The Targeting Question
While Facebook has released some details about their upcoming advertising model, there are still questions about what targeting tools will be available. According to our recent study, first-party targeting methods deliver click-through rates many times higher than traditional social media campaigns. Our study looked at prequalification, where viewers were screened before viewing a video, and saw an engagement rate of 5.5 percent, compared to an average social media campaign engagement rate of 2.8 percent. Facebook could conceivably bring similar first-party tools to bear, which would give it a distinct advantage in the marketplace and allow it to command higher rates.
The Importance of Mobile
According to a report issued by IDC earlier this year, laptop sales have dropped 14 percent and smartphone and tablet devices have had triple-digit growth for the same time period. Couple this with our finding that mobile ads are performing better and garnering higher engagement rates than ads viewed on desktops (5.0 percent vs 2.4 percent) and the importance of brands having a solid mobile strategy becomes readily apparent.
All this highlights the strategic importance of the Instagram purchase, and the potential of Facebook as a prime-time advertising medium.
As social media becomes increasingly ubiquitous and mobile becomes more pervasive, brands’ view of Facebook will continue change from social media platform to mainstream ad medium. We’ll have to wait and see if Facebook’s upcoming ad platform embraces this new view.