M80 CEO Predicts Brands Will Boost Facebook Ad Spend

Facebook has aggressively promoted a stream of ad product related changes since the firm’s IPO flopped, heightening worries that it won’t generate the amount of ad revenue the market expects. The moves have spurred mixed responses from investors, but the CEO of WPP-owned social marketing firm M80 thinks they’ll result in a rise in overall brand spending on Facebook.

In a recent post on the WPP Reading Room site, M80 CEO Todd Steinman discussed recent Facebook ad innovations and their potential impact on digital marketers.

He predicted brands will spend more on Facebook as a result of additional self-serve ad options. “Until now, Newsfeed inventory had been available at premium rates through Facebook’s sales reps. Unlike buying media through an insertion order, auction-based pricing doesn’t allow for reach guarantees. While some brands will have a problem with the lack of guaranteed reach, we anticipate overall spend per brand to increase, especially among brands familiar with SEM and other auction style pricing.”

He suggested self-serve ad options will require additional ad management by brands, and indicated that Facebook’s mobile focus could lead to inventory problems.

“It is important to target specifically for mobile through social as mobile audiences have different behaviors, usage patterns and needs. Geo-targeted offers and mobile apps are two types of objects that will likely use this segment exclusively,” wrote Steinman.

While he seemed to agree Facebook’s new mobile focus is necessary, Steinman had two concerns:

1. Since Facebook’s mobile ads only exist in the Newsfeed, there is a possibility Facebook will increase supply and run the risk of cluttering the user experience. 2. If Facebook limits supply, mobile Newsfeed ads could become costly to advertisers.

Steinman also laid out ad offerings on Facebook that are not available through ad sales reps or the site’s main self-serve ad platform. “Instead of one-size-fits-all, now almost every slice of Facebook’s media inventory will be decoupled and offered à la carte through self-serve auction. For advertisers, this creates new targeting efficiencies and should improve ROI results across the board,” wrote Steinman.

He suggested that additional ad targeting capabilities will require new strategies for marketers. “Brands will need help developing and understanding each different segment for these categories: Fans, Rest of Network, Right-hand Side, Mobile, Friends of Fans, Newsfeed and Desktop.”