Facebook Video Advertising Technology

Facebook to make ‘complicated’ ad buying easier to fuel personalised videos

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By Seb Joseph | News editor

March 3, 2015 | 5 min read

Facebook is working to untangle its admittedly "complicated" ad buying model in a bid to highlight how effective personalised video ads can be for the fast-growing "quantitative" marketers circling the platform.

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Though video played a pivotal role in over 50 per cent advertising growth in Facebook’s four key regions in 2014, there is far greater and sustainable revenue to come from personalised videos. The proliferation of micro-targeted videos is minimal at the moment but the social network believes brands will eventually warm to the idea, wooed by the prospect of “the broad reach of the Super Bowl every day” with finely tuned demographics.

“It’s up to us to make the buying process simpler which we are working on to show the results and do the measurement,” said chief operating officer Sheryl Sandberg at the Morgan Stanley Technology Media and Telecoms Conference yesterday (2 March).

“It’s going to take time for those dollars to flow, but we think they will, because the reach is there. The measurement is going to get deeper and better and the targeting can be more specific and the experience can be just as rich and emotional.”

Sandberg highlighted the “unique” example of Lexus’ Super Bowl ads to prove the point. The car maker ran a thousand different 30-second sports before or right after the match, targeted to peoples unique interests as well as a personalised call to action that based on demographics and age.

While not every brand will be able to produce as many videos as Lexus, the social network feels deeper targeting could provide offset the need to produce reams of content in order to personalise at scale.

Facebook’s concern is that without a system in place to fully flout the effectiveness of video, advertisers will be less inclined to pour media budgets into the higher value ad formats.

The social network hasn’t yet been able to convince some of the world’s biggest advertisers to make it a main player in their media plans, revealed Sandberg. Analysts predict that video advertising could add $700m to $1bn to Facebook’s revenue this year.

“Even for our largest [advertisers], we are still a tiny portion of their budget and I think we grow that with better products including video, but also we are helping them to take advantage of the targeting that we offer,” she added. Targeting for digital ads is “actually not very good" and Facebook targeting is about “45 per cent more accurate", she added.

The difference in quality stems from the patented “people-based marketing” alternative to traditional cookie targeting Facebook is pinning its future advertising hopes on. The expectations stem from the Atlas ad serving and tracking technology Facebook relaunched last year with the promise to solve two major problems for marketers: firstly, it lets them track campaigns across screes by replacing cookies with a unique identifier for people and secondly it lets them target real people across mobile and the web.

“That’s what really matters in our space,” said Sandberg. “90 per cent of the people who will see a Facebook ads, and then buy something will never click on those ads because we are not searched. And so, the right measurement to measure what we are delivering is super important to our growth.”

“Every company has its person, measuring a spend and that's good for us because we can prove to the CFO, not just the CMO but to the CFO that we are the most effective vehicle they have out there and the ROI is higher, our spend will increase.”

Brands including Kia and Ford have both told The Drum that Facebook is set to play a bigger role in their media plans, spurred due to its rapidly maturing video offering, which has consequently benefited from the growth of mobile traffic to the site.

Facebook reported a 49 per cent year-on-year jump in revenue in the three months to December to $3.85bn, and 69 per cent of that came from mobile.

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