The future of Facebook mobile ads

As Facebook tantalises marketers with its next generation of mobile ads, Julian Rogers asks whether they will prove to be a boon for brands or largely go ignored by users

In June, the great and the good of the marketing world rendezvoused on the French Riviera for the annual advertising gathering – the Cannes Lions International Festival of Creativity. It was here that Facebook revealed a prototype of the tech giant’s next iteration of mobile ad.

Chief product officer Christopher Cox showcased to marketers how these ad units fuse pixel-dense images with video and product information, while 3D modelling can replicate a 360-degree view of brand’s products. For example, a demo ad for a luxury timepiece by watchmaker Michael Kors showed it being viewed from a multitude of angles by sliding a finger across an iPhone 6’s screen.

Crucially, when users tap the ads they don’t exit the Facebook app bound for the advertiser’s website, although these full-screen ads do give the impression of visiting a mini-version of a brand’s website. It’s similar to the self-contained Instant Articles initiative announced in May whereby third-party news articles are displayed within Facebook when clicked.

Ultimately, Facebook is striving to serve up far more immersive, interactive and attractive ads compared to current marketing that advertising-averse users might instinctively scoot past with a swift thumb swipe. “We’re trying to give marketers a canvas that’s more engaging,” Cox was quoted as saying. And, of course, subtly discouraging eyeballs from straying outside the app.

Time for change
Initial reaction to previews of the new ad format has generally been positive. “Beautiful”, “sexy” and “awesome” are three adjectives Agency Lex’s marketing director Alex Czajkowski uses. “Ads are going to be there so you might as well make them interesting, which means of course raising the bar beyond the usual free chips or free bet offer. With ad units like these, you can really make an arresting visual representation of your brand.” The former Gala Interactive and Sportingbet marketing director goes on to say: “I’m kind of excited about it, and it’s about time because Facebook’s previous ad formats are dull. But this is pretty damn cool.”

With Facebook saturated with betting ads, those operators and affiliates armed with the finance and resources to churn out these kinds of swanky ads should be able to stand out from the competition. “I don’t recall anybody ever really being able to get so hands on with an ad before, so the potential is huge,” says Stickyeyes’ Michael Boardman.

“Utilised properly and tailored to the right audience, we could really start to see a fantastic two-way relationship between brands and their customers. [But] as users aren’t actually leaving the Facebook app, it’s going to be interesting to understand the cost modelling of this format – possibly an engagement cost structure.”

Chance to shine
Naturally, these new ad formats and luxury goods makers – like the aforementioned Michael Kors – or car manufacturers make for perfect bedfellows. Egaming companies aren’t purveyors of tangible products, so it remains to be seen how marketers will harness these ad formats, although slick demos of landing pages, sportsbook apps and gaming products seem obvious avenues to explore.

Love Social Media co-founder Marc Campman, who describes Facebook’s decision as “healthy” and “logical”, says some form of gamification could be integrated into the ads. “Or you could produce 3D ads of the game or the experience of playing a game, so there are plenty of opportunities for casinos to visualise their products.”

Whichever route egaming CMOs choose to go down when fashioning their ads, Neilson Hall, co-founder and CEO of Illuminate Agency, underlines the importance of relevancy as opposed to deploying the hard sell. “The targeting options via many of these social platforms are very advanced so operators need to think about how to initially engage with consumers and start them down the conversion funnel. Brands like Paddy Power that are producing great viral content can perhaps use these new ad formats to amplify existing content.”

Walking a fine line
Facebook chiefs are cognisant of the fact they continue to tread that fine line between offering what the advertisers want and not degrading the UX for mobile users. Then again, some industry observers questioned whether Mark Zuckerberg and his team could even make mobile ads work when they debuted three years ago. (These concerns were partly to blame for the share price plummeting to $20 just two months aſter the $38 IPO). Back then, mobile accounted for a tiny fraction of the company’s revenue, which spooked early stockholders.

But these worries have long since subsided; a whopping 73% of Facebook’s revenue in Q1 2015 was generated by mobile ads – up from 59% in Q1 2014 and 30% for the corresponding period in 2013. Mobile advertising has flourished. Incidentally, the company’s share price now hovers around $87.

“Facebook are in a similar boat to Google where they have the luxury to do whatever they want to their users,” opines Yoni Sidi, Market Box Media founder and ex-CMO of Winner. “We are relying on Facebook to take the users into consideration as much as possible.”

Even if some users end up being irked by the new ads, are they really less likely to open their Facebook app or quit the service entirely? It’s not likely considering it remains a go-to app to kill a few minutes. Indeed, the California-based outfit boasts some 1.25 billion MAUs on smartphones and tablets, of which over half a billion exclusively access Facebook on portable devices. Facebook has swiftly evolved into a mobile-centric business boasting a “massive audience share and insane retention levels”, says Hall.

Yet he believes mobile ads still have limitations due to buyer intent. “Put simply, people still do not ‘cross the line’ on conversions with their mobile as much as they do on desktops. With the exception of ads to drive app-installs, Facebook, and for the matter other mobile channels, find it hard to get people to buy, sign-up or otherwise convert.”

Moving images
Native video, which will be an integral aspect of the ads, has also been critical for Facebook as brands flocked to upload videos. With the implementation of now-ubiquitous auto-playing videos (without sound unless clicked) in users’ news feeds, Facebook registers a staggering four billion video views per day.

This level of engagement means it’s encroaching on YouTube’s turf whilst poaching TV ad dollars as more and more advertising migrates to digital. Indeed, video is increasingly becoming a key battleground; lately we’ve seen Snapchat aggressively pushing video while Twitter launched auto-play videos earlier this year. Video advertising is especially useful for reaching younger users.

For egaming operators, just like other brands, Facebook’s significance as an ad platform continues to grow. Sure, its organic reach has been curtailed for commercial accounts, but targeted paid advertising on the platform is a given in order to market to mass audiences. “Targeted advertising is an intrinsic part of the Facebook experience – for media buyers and consumers alike,” Hall says.

Meanwhile, Boardman says: “With mobile gambling expected to account for half of digital gambling revenues by the end of this year, brands simply have to make sure they’re seen, and heard, by their customers on the platform.” Expect to see the new ad formats springing up on news feeds by the end of the year. Few, though, would bet against this mobile ad evolution turning out to be an instant hit.