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18 September 2018
Facebook Relaunches Search Ads
Facebook ads have become a cash cow of note, ever since its introduction in 2007 the social media giant has been racking in cash by selling various opportunities to reach its user base. What began as selling spots within the newsfeed has escalated into their audience network, instant articles, Tinder, Messenger, video ads, video commerce, Instagram and soon Whatsapp.
Facebook ads have gone cross-platform, but that doesn't mean that they have stopped finding ways to monetise the traditional Facebook experience. Facebook is now testing ads in search results, which are available to businesses in the automotive, retail, and e-commerce industries.
The ad rollout will be region limited for now and will only be visible to users in the United States and Canada. While I'm pretty confident that if this test yields positive results, it will see Facebook search ads expanded to more countries soon enough.
Facebook going after Google
Facebook has always had it out for Google, and I think it’s fair to say that this is Facebook's attempt to offer an ad product that can compete with Googles widely popular and profitable search ads. Although Facebook search ads will be limited to appearing on Facebook and Facebook searches are no way as frequent or as granular as Google it still offers advertisers an alternative.
Which means they are competing for the same advertising dollars and budgets may be split as businesses now have to ask themselves if it would be more beneficial for their ads to show up in Google search or Facebook search.
How will Facebook search ads work?
When creating a campaign in Facebook Ads Manager, businesses in eligible categories will see ‘Search Results’ as a placement option. The search results option can be selected as an additional placement when creating news feed campaigns. Unfortunately, businesses cannot purchase search ads exclusively and will need to run it alongside news feed ads.
The ad format itself will look similar to news feed ads, containing the same headline, image, and body text. Facebook search ads will appear either as a static image or in a carousel format. Each search
Unlike Google ads, there is no option to select specific keywords or phrases for Facebook search ads. Ads will be eligible to appear in searches for terms related to the business’s offerings, in both the primary Facebook search function and Marketplace searches. Search ads will not appear on a desktop.
This is not Facebook's first attempt at search ads
Facebook previously launched Sponsored Search Results in 2012 but closed the program in 2013 after unsatisfactory results.
What is the reason for Facebook launching search ads?
The reintroduction of search ads could open a significant new revenue stream at a time when Facebook’s revenue growth is quickly decelerating as it runs out of News Feed ad space, the Stories format that advertisers are still adapting is poised to overtake feed sharing on social apps and users shift their time elsewhere.
In Q3 of 2018, Facebook's ad revenue grew by 33% year-over-year, but that’s far slower than the 49%YOY gain it had a year ago, and the 59%from Q3 2016. 33% is still relatively swift for a 14-year-old company, and Facebook is far from a crisis, the revenue growth rate has been the focus of this year’s earnings calls, and sagging projections about it have caused massive slides in Facebook’s share price.
New revenue streams to maintain growth
Opening up new ad inventory for search could reinvigorate the sagging revenue growth rate that, combined with Facebook’s privacy and security scandals, has put intense pressure on Facebook’s leaders Mark Zuckerberg and Sheryl Sandberg.
Facebook’s share of the $279.56 billion total worldwide digital ad market will grow to 19.5% this year, trailing No. 1 Google, which has 31.5%. After gaining multiple percentage points of share in the last few years, eMarketer estimated Facebook’s cut of total digital ad spend would fall to around 1% in the next two years.
Unlocking search ad inventory could perk up those projections with Facebook only needing to hit 3.3% of total search
Predictions for Facebook Search Ads
Facebook stands to reason that the introduction of search ads will give advertisers the chance to reach consumers further along the conversion funnel when they are already planning a purchase. They suggest that consumers may be more likely to search for products on social media than they were five years ago, for Facebook’s first go around with search ads, now that social commerce shopping is more widely available.
I'm still not convinced that Facebook search holds the same level of intent as Google search and shopping on social is still a small portion of overall e-commerce.
Playing catch up with search ads
Since that initial push into search failed, the competition between Facebook, Google and Amazon has grown more fierce. Google’s paid search business is accelerating, with the volume of paid clicks on Google properties increasing 62% in Q3 2018 from a year ago and up 10% from Q2.
But, cost-per-click continues to decline and is down 28% from a year ago and 7% over the previous quarter. Amazon is snapping up more of marketers’ search budgets, with some moving 50% to 60% of their search budgets usually allocated to Google to Amazon. So I will not be surprised if marketers look to split their search budgets between Google, Bing, Facebook and Amazon to try and reduce cost per click and improve ROI.
Data privacy more data mining
One major concern is that Facebook already collects too much information on its users and their behaviour to target its ads. With the reintroduction of search ads, it’s even more incentivised to gather what users do online.
Adding search data to its algorithms could open up a whole new way of targetting users and walking the balance between providing a social experience and ads are going to get tougher.
Not Facebooks core business
Search is far from the core of Facebook’s offering, where users typically browse the News Feed for content discovery rather than looking for something specific. The most common searches are likely for friends’ makes the majority fo searches irrelevant for ads.
Finding your way on Facebook
While I'm not convinced Facebook search ads will be a hit when compared to the offerings Google, Bing and Amazon have I still think it could be worth being present.
Having less competition for clicks and more presence online especially on a site of Facebook's size has to be good for brand recognition. As for ROI and direct sales which is what paid search ads are renowned for, I doubt this will be a winner.
One saving grace could be the proliferation of hashtags on Facebook which can be used to perform a search by click and with hashtags more topic related it can be easily applied to match a keyword to a relevant ad.
Facebook search ads are by no means an attempt to create a competiting revenue stream but rather a way to add the current real estate available and sell more impressions faster.
Facebook trying to help remain relevant to businesses
User acquisition and retention may be what Facebook focouses its efforts on but businesses are what keep the Facebook ecosystem alive and earning a sustained revenue. Many companies have tried using Facebook marketing as a promotional tool or a sales channel and failed miserably or are discouraged because of numerous issues surrounding the platform.
Facebook Search Ads may not appeal to you or your business but they aren't your only option for marketing on its platform and there are a number of reasons why your business should still be on Facebook.
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