You don’t need an earnings call to know that Facebook made a gazillion dollars in Q4. Ok, that number might be a ballpark figure, but I’m pretty sure we’re all familiar with how successful the company is.
Since it’s our job to know everything going on with their ad ecosystem, we listened in and and identified the 3 most significant statements made on Facebook’s Q4 earnings call that will impact your planning over the next 12 months:
“Five years ago, most of the content shared on Facebook was text and some photos. Today it’s primarily photos, with some text and video.”
Why does this matter? Your ads are competing with a sea of other engaging pieces of visual content.
It’s not enough to tell your brand’s story in your copy; your imagery needs to be at the top of its game. If you rely on stock photos and uninspired product images in your advertising, you’re going to get lost in the fray.
And this doesn’t just apply to Facebook and it doesn’t just apply to ads seen on desktop.
Instagram is going to become a piece of the advertising conversation eventually – you need to put as much (if not more) thought and planning into the photos accompanying your ad copy and how they’ll be received on mobile devices.
Which leads me to the next quote…
“In the US, mobile gets 25% of consumer media time, but only 10% of the ad budget.”
The number of users who access Facebook on their mobile devices daily increased 34% year over year in December – an average of 745 million people each day.
Marketers know the opportunity and value is there, but are hesitant to take ad budget from more proven sources. Sheryl Sandberg, Facebook’s COO, even commented that even for the largest advertisers on the platform, Facebook represents a really small part of their ad spend.
To that end, while Facebook isn’t hurting for mobile ad revenue – it was 69% of their total ad revenue for Q4, up from 53% in Q4 2013 – they’re investing heavily in measurement tools and technology to prove that the platform delivers results by measuring user engagement and ad effectiveness across multiple devices.
“Video grew significantly this year to an average of more than 3 billion video views per day on Facebook.”
That figure applies only to native Facebook videos, by the way – not even those shared from YouTube, Vine or other sites.
Hilarious Buzzfeed videos, daddy/daughter lipsyncing performances, and outtakes from local newscasts – we love it all.
That thing I said earlier about your imagery needing to be on top of its game? You’ll need to prepare to face the same challenge with video. Is your video memorable? Is your video memorable even when the sound isn’t playing? Is that still shot that shows before the video starts playing catching people’s attention?
In Q4, Facebook expanded its silent autoplay ads internationally, but it’s still early to determine how well the format is working for marketers. Regardless, Facebook’s going to keep innovating in this area to help you push compelling, engaging, and relevant video out to your audiences.
One bonus quote to consider:
“In Q4, the average price per ad increased 335%, while total ad impressions declined 65%.”
Q4 is a competitive time in Facebook advertising regardless, but these pricing & volume trends have a lot to do with the fact that the company has become more efficient at targeting the right ads at the right people. They’ve kept inventory steady, without stuffing more ads in the newsfeed, and they’ve even reduced the number of ads in the right-hand side when they improved its design. This scarcity has click quality trending up thanks to improved targeting, so ads have become more valuable.
To get more for every dollar with Facebook advertising, you need to have the right resources at hand. Sophisticated tools that help you test segments properly, report clear correlations on return on ad spend, and the personnel (or, ::ahem:: agency partner) to execute the right way.
We’ll see what Q1 brings for Facebook, but in the meantime, any other comments from the earnings call that might influence your plan for the coming year?