Stories: the cause of, and solution to, all of Facebook’s problems
Homer Simpson famously called alcohol the cause of and solution to all of life’s problems. I believe the same could be said of Stories for Facebook.
Putting the D’oh in disruptive
These days, it seems Facebook is in a perpetual PR crisis. But doomsday prophets should take a pause. Yes, change is afoot. But recent events hardly signal imminent decline. To the contrary, what we’re witnessing today is Facebook disrupting its core business in the short-term to position itself for continued domination in the long-term.
As one of the world’s most powerful and valuable companies, Facebook has the luxury – and responsibility – of planning years and decades ahead even if it means taking a hit on quarterly metrics. To be sure, this isn’t the first time Facebook has disrupted itself to react to and get ahead of consumer trends. For evidence, look no further than the transition from desktop to mobile. That was certainly a bumpy road but Facebook came out stronger on the other side – and brands that adopted early reaped rewards.
So what is the current state of disruption and how will it impact brands? I’d characterize it this way: Facebook is transitioning from Facebook the Platform to Facebook the Holding Company. As a holding company, Facebook can more effectively bundle people and advertising across its different properties, providing brands with increasingly better performance at scale. And Stories are at the center of this (r)evolution.
Eat my stories
The portfolio model for media companies is well established in the TV space, for example, where networks often bundle different programs to achieve a balance between overall cost and reach that meets an advertiser’s given objectives. This model translates well to a company like Facebook which has a mix of properties – Facebook, Instagram, WhatsApp, and Messenger – that can work together to drive results for marketers.
However, the key to an effective portfolio approach in media is having a common unit – one ad format – that is constant across placements. To date, units have varied widely across Facebook and Instagram and there’s been very little advertising on WhatsApp and Messenger. But this is changing. Facebook the Holding Company is leveraging Stories as the common format across its family of apps. In so doing, it brings massive volume and value to the table for advertisers. How much volume? In its Q3 2018 earnings call, Mark Zuckerberg announced that more than one billion people are using Stories each day. How much value? Well, that all depends on the brands.
Duff stuff
Stories represent a completely different user experience. In turn, they require a completely different advertising approach. People seem to like the frivolity of ephemeral folly in Stories vs. the permanency of perfected posts in Feed. Brands need to understand this fundamental shift in creation and consumption. The techniques of ad targeting, creative, and calls-to-action that were developed for the Feed will not work in Stories. Similarly, optimization tactics built for Facebook and/or Instagram need to be reconsidered for Messenger and WhatsApp when ads in Stories are available across the portfolio.
When it comes to targeting, data must be levered across Facebook the Holding Company to construct rich audience profiles. This includes demographic and behavioral data from each of the platforms. From there, bringing in first-party data from CRM systems will help identify segments most likely to buy or buy again from brands. Additionally, third-party data from the likes of Experian and Placed provide intent signals from offline activity. Combining all these data points will inform optimal bidding and placement strategy for Stories. And, as always, closed-loop analytics will ensure that tangible business outcomes are measured and maximum value is extracted.
In terms of creative, brands must build unique assets for Stories. What gets someone in a Feed to interact with your brand will not work in Stories – it’s too easy to just tap and skip. The key is not revealing your brand too early while also not revealing it too late. We don’t have thirty seconds to play with here. So you can’t simply repurpose your assets. Say it with me now. (Or pretend you’re Bart Simpson writing it on the blackboard at the beginning of an episode.) I will not repurpose creative for Stories. I will not repurpose creative for Stories. I will not repurpose creative for Stories.
As Facebook positions for its next chapter with Stories, brands must turn the page and experiment with all available variables. Meanwhile, Facebook the Holding Company needs to fine-tune the ad load in Stories and find a way to make them more pervasive across its portfolio. These things will take time, but they will happen. And when they do, everything will be coming up Millhouse.
Aaron Goldman is chief marketing officer at 4C Insights