Digital experts have labelled Facebook’s plans to sell television style adverting a “great move” for the social network and marketers alike, as its share prices reach a yearlong high.
The social giant is planning to challenge television advertising by selling 15-second spots starting at $USD1m to as much $USD2.5m a day, according to Bloomberg.
Strategy director and founder of HardHat Digital, Dan Monheit, told B&T selling TV style adverts is undoubtedly a good move for Facebook financially.
“When it comes to monetising an audience, there’s nobody out there with as many eyeballs to monetise as Facebook,” Monheit said about the network which has 1.15 billion members.
“In a way they’re already playing catch up with the likes of Twitter and YouTube who have been making big inroads here.”
Bloomberg’s two sources said the ads will initially be sold on a full-day basis and will only be targeted to users based on age and gender.
This “dumbing down” of targeting options – Facebook currently lets marketers target users based on interests and location – will let marketers make like for like comparisons with TV buys, according to Monheit.
“Facebook could let advertisers zero in on specific audience groups using the millions of data points they’ve got available as well as provide tracking and reporting that TV networks could never even imagine.
“I guess they’ve decided it’s easier to just sell people what they think they want, rather than convincing them that they want the wrong thing.”
Limiting the options will make it easier for advertisers and media agencies – “especially big lazy ones” according to Monheit – to spend serious dollars on the network.
“Cleverly, they [advertisers] don’t even need to change the length of their TV spots.”
“The next big question is what they’ll do when these big budget TV spends finally get some true analytics behind them and things like wastage can be quantified.”
Tim Evans, national strategy director DT, said targeting television advertising dollars is “a great move for Facebook”. “For marketers, it’s a highly measurable amplification tool.”
It may be good move for Facebook’s coffers but how will users respond?
“Users won’t mind if some of the half-relevant sponsored stories that appear in their news feeds becomes half relevant video content instead,” Evans said.
However, Monheit highly doubts users will be ok with TV style ads in their news feeds.
“Pre-roll and autoplay ads are annoying, interruptive and skipped as soon as possible – but at the end of the day we’re using the service for free.”
A user won’t see a commercial more than three times in a day, according to Bloomberg.
To avoid aggravating users Facebook should avoid autoplay and the ad-ratio in user’s news feeds should not increase, according to Evans, who added that to ensure cut-through the spots need to be relevant to the user and appropriate for the platform.
“It’s about quality and relevance, and frequency if you can pull off the other two. Native ads strive to equal the value of their editorial context.
“Give users a choice of what to watch, and they’ll pick the most interesting thing they can find within their news feeds – whether it’s an ad or not.”
Monheit feels Facebook’s mission to monetise its audience may eventually backfire.
“At some point they’ll kill the goose that lays the golden eggs, it’s just hard to know if we’re 5% or 50% of the way there,” he said.
“At this stage, the switching cost for leaving Facebook for most users is huge. It contains all of our history, friends, important dates, milestones and more.
“To this end, there’s probably a lot more annoyance the average user can handle before leaving the biggest part on Earth becomes a real consideration.”
Meanwhile, Facebook’s share price has reached its highest level since the company’s initial public offering on May 18 last year.
The social network hit the $38 a share mark overnight, following Facebook’s second-quarter earnings report which revealed the company’s revenue had increased by 53% to $1.81bn (USD).
The report, released last week, also revealed mobile advertising generated $1.6bn (USD) for Facebook in the second quarter.