Agencies, marketers, and research data all say the same thing about Facebook’s 2011 ad sales. The social giant left portals Yahoo, AOL, and MSN in the dust, as well as most major publishers.
“It’s definitely a challenge to [Yahoo, AOL, and MSN],” said Scott Symonds, head of media for digital agency AKQA. Symonds said Facebook’s marketing allure lies in not only its 800 million worldwide users, but also how it can offer advertisers routine follow-up pitches in terms of the likers/fans community they build on the social site.
“There’s the whole concept of earned media and talking to influencers around your brand,” he said. “We’ve seen that positive impact in surveys. We’ve seen it in data from Nielsen, etc. I think Yahoo, AOL, and MSN all have great content. They are all trying to find a way to make their content more sharable so they can compete with Facebook, which has a pretty good advantage right now. The portals are not even disputing that. They are trying to socialize their inventory.”
Digital shop Big Spaceship is experiencing the same trend. “Specific to our clients, I’ve seen larger and larger portions of our media agency partners’ display budgets allocated to Facebook,” said Victor Pineiro, a Big Spaceship strategist. “Especially since Facebook released Sponsored Stories, [which is] an ingenious way to leverage fans’ social graphs to propel ads socially and organically.”
Brian Yamada, executive director for Kansas City-based ad agency VML, offered up a more nuanced assessment. He echoed some industry analysts who have concluded that Facebook is nabbing more marketing dollars from traditional platforms like broadcast, print, and billboard than from other digital channels.
“I wouldn’t say an apple going to Facebook means an apple lost for portals,” Yamada said. “But I think the money is definitely following the eyeballs, and people are spending a lot of time on that particular platform now.”
Facebook’s Jump to No. 1 in Display
The anecdotal talk from agencies can be backed up with data from third-party researcher eMarketer. Facebook’s display ad revenues, according to the most recent eMarketer forecast, will total $3.8 billion this year – up 104 percent from 2010.
By comparison, Yahoo, AOL, and MSN’s display ad sales – not including search, to be clear – were modestly up year over year in what has turned out to be an uptick year for numerous display platforms. The fiscal quarters for the trio of aforementioned Facebook competitors, respectively, showed growth typically between 5 percent and 15 percent. In the meantime, according to eMarketer, Facebook has catapulted to No. 1 in display ads market share at 17.7 percent, beating Yahoo (13.1 percent), Google (9.3 percent), AOL (4.9 percent), and MSN (4.2 percent).
At this time last year, Facebook trailed Yahoo and Google. Five weeks ago, Yahoo, AOL, and MSN struck an unprecedented partnership for major display platform competitors, pooling together their unsold inventory in a deal aimed to increase their margins, secure higher prices for remnant ads, and augment the reach available to agencies and advertisers.
“Facebook has hurt publishers,” said Nichole Goodyear, a strategic adviser specializing in social media for marketing services company Extole. “They’ve hurt CNN, ESPN, and Yahoo – any of the big publishing or portal sites that we used to consume as the entry point of the Internet. They still have a lot of content on those sites. And they still have a lot of traffic on those sites. But what they call the ‘excess inventory’…They have a lot of excess inventory, which affects the price and supply curve. A large portion of that display advertising has shifted to Facebook engagement ads.”
Facebook vs. Google Battle Moves to Mobile
Bloomberg yesterday reported that Facebook would unveil mobile ads by the end of March. When it does introduce the commercial mobile feature, Facebook will likely find a burgeoning Google atop that emerging space. On Monday, IDC reported that Google was now leading mobile display in terms of market share, charting at 24 percent. According to IDC, a Boston-based research and consulting firm, ad network Millennial comes in second at 19 percent while Apple trails at 15 percent. Previously, IDC said, Apple had been in the No. 1 slot.
Whenever Facebook joins the mobile advertising fray, Pineiro from Big Spaceship said the move won’t come soon enough. “With more than 40 percent of Facebook users accessing the platform on mobile devices,” he said, “this [has been] an enormous missed opportunity.”
So because Palo Alto, CA-based Facebook has had a break-through year on the display ads front, a question begs: Can it make a similar impact in mobile advertising during 2012? Whatever the case, Symonds from AKQA predicted that social-centric platforms like Facebook and Twitter – as well as the more general digital powerhouse Google – would continue to disrupt the marketing world.
“As we build additional technologies around social media and refine our thinking to more socially focused rather than being reach or broadcast focused,” he said, “there is a potential for social media to not only shift the construct of digital marketing but marketing [as a whole].”
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