Facebook’s Ad Juggernaut Approaches Middle Age

Since 2012, News Feed ads have been the center of Facebook’s business. But the number of ads the company can show there is approaching its upper limit.

“As Facebook looks to new formats such as mid-roll video ads and messaging ads, concerns remain over video ad engagement, measurement and more,” said eMarketer analyst Debra Aho Williamson, in a new report on the company’s advertising revenue prospects. (The full report, “Facebook Advertising 2017: Five Factors that Could Rein in Future Growth,” is available only to eMarketer PRO subscribers.)

Facebook’s News Feed is now nearly 11 years old (it launched in September 2006), and ads have been a part of it for five years. Concerns about ad load are putting pressure on Facebook to come up with its next big revenue drivers, said Williamson.

This report, based on extensive interviews with marketers and ad agency executives, digs into five factors that could affect future growth—and what marketers need to know about them. Some ad executives who spoke with eMarketer are ready for Facebook to deliver more ad formats that exist outside of the News Feed. They say that the Feed is cluttered and noisy, and they have difficulty making their ads stand out—even with Facebook’s targeting capabilities.

They also say that Snapchat’s purposeful avoidance of the feed structure is telling. “Does the way people are consuming content on Facebook or Instagram have to change to keep up with a more dynamic experience such as on Snapchat? I think the answer to that is absolutely yes,” said Ed Camargo, vice president of paid media at PMX Agency.

See the rest of the article here in eMarketer.

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