As the digital giant's reach grows, so may the cost of its social advertising.
While Facebook CPM rates have reportedly increased 41 percent in the last year, the digital giant's Instagram acquisition could make its ads even costlier.
Facebook purchased Instagram for $1 billion last week, setting off speculation about how the new property may affect future monetization efforts by CEO Mark Zuckerberg's company as it prepares for its IPO. Janet Sternberg, communication and media studies professor at Fordham University, thinks Instagram may drive up Facebook ad prices while also making it more attractive to brands.
"These new indirect connections to social media systems beyond Facebook will allow Facebook to claim even wider reach and larger audiences for advertisers," she told ClickZ via email. "Keeping Instagram as a separate system allows Facebook to place ads in two different social media venues, thereby doubling the potential visibility and giving advertisers a 'two-for-one' bargain."
Keeping Instagram as an individual product also may essentially create a two-pronged ad network, Sternberg said. "Facebook can potentially offer discounted rates to advertisers for bundled deals to place ads across social media venues," she said. "By acquiring Instagram's expertise in mobile data sharing, Facebook also can stay at the leading edge and help drive innovation in the growing field of advertising for mobile devices."
When asked to respond to Sternberg's assessment, Menlo Park, CA-based Facebook declined to comment.
But the professor may be on to something. Roger Katz, CEO of social marketing provider Friend2Friend, said marketers have been increasingly looking to marry Instagram efforts to Facebook. He pointed to a recent initiative from client New Belgium Beer.
"There's a new trend we're seeing among our clients for interest in bridge-building audiences on Facebook with their fans on more niche social channels such as Instagram, Pinterest, and Pandora," Katz said. "There are a number of benefits associated with doing this. First, by exposing their Facebook fans to their smaller network - such as those on Instagram - it allows the brand to quickly grow their number of fans on the smaller network. Second, the company's Facebook fan page also benefits, by providing additional shareable content that can be used on Facebook."
Join the Industry's Leading eCommerce & Direct Marketing Experts in Chicago
ClickZ Live Chicago (Nov 3-6) will deliver over 50 sessions across 4 days and 10 individual tracks, including Data-Driven Marketing, Social, Mobile, Display, Search and Email. Check out the full agenda and register by Friday, Oct 3 to take advantage of Early Bird Rates!
Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.
IBM Social Analytics: The Science Behind Social Media Marketing
80% of internet users say they prefer to connect with brands via Facebook. 65% of social media users say they use it to learn more about brands, products and services. Learn about how to find more about customers' attitudes, preferences and buying habits from what they say on social media channels.
The Multiplier Effect of Integrating Search & Social Advertising
Latest research reveals 68% higher revenue per conversion for marketers who integrate their search & social advertising. In addition to the research results, this whitepaper also outlines 5 strategies and 15 tactics you can use to better integrate your search and social campaigns.
September 17, 2014
September 23, 2014
September 30, 2014
1:00pm ET/10:00am PT