Facebook will be cracking down on how many ads it includes in newsfeeds, which could impact some brands' ad performance. Instagram, however, is a promising bet to make if brands are thinking longer term about ads, who they'll reach and how they'll be seen.
Travelers see more Facebook and Instagram ads from hotels, destinations, cruises, and airlines than they did a year ago, ranging from Dynamic Ads with photos and links, to video ads such as Tourism Montreal’s campaign with William Shatner that launched last month.
But last week, Facebook told investors during the company’s fourth-quarter 2016 earnings call that Instagram, because of its faster user growth compared to Facebook, is the better platform for ad opportunities in 2017.
Speaking during the call on February 1, Facebook CFO David Wehner told investors and analysts that ad load — the ratio of ads to organic posts in newsfeeds — has more opportunities on Instagram because many Facebook newsfeeds have reached an ad saturation point.
“So there is an opportunity for us to continue to grow ad load on Instagram probably beyond – in a longer timeframe than there is on Facebook because of that disparity in terms of where they are today,” said Wehner.
In December, Instagram also began letting users save images or ads to revisit later and Facebook also lets users save newsfeed content which could help travelers with planning trips. Chute, a social media marketing company, found some 98.5 million travel-related photos were shared on Instagram in 2016.
Wehner first told investors about the Facebook platform’s likely ad load decrease in July. Last week, he said the company expects Facebook’s advertising growth rate to decrease this year as it manages ad load to prevent too many ads from crowding newsfeeds.
Facebook’s work with travel brands, however, has only increased during the past year.
Dynamic Ads for Travel, one of the first sector-specific Facebook Dynamic Ads products launched last year, have become commonplace in many travelers’ newsfeeds.
Expedia, for example, has used Dynamic Ads for Travel and Expedia CEO Dara Khosrowshahi told investors in October that the company plans to increase Facebook and other social advertising to “Google-like levels if we can.”
At Facebook, fourth quarter advertising revenue was up 53 percent to $8.6 billion from the fourth quarter 2015 and mobile ad revenue for the fourth quarter was $7.2 billion of total ad revenue (up 61% from last year). Wehner said efforts to limit the impact of ad blockers on desktops helped desktop ad revenue grow 22 percent year-on-year despite a decline in Facebook desktop users.
Facebook had 1.9 billion active users per month and 1.2 billion active users per day as of December 31, a 17 and 18 percent increase year-over-year, respectively.
Instagram had more than 600 million monthly active users as of December 31 and recently passed 400 million daily active users. Instagram Stories — live videos users post to their profiles — has reached 150 million daily active users since it launched in August.
Facebook is increasingly a factor in many travel brands advertising strategies but the company also has eyes on other technologies. Below are five takeaways from last week’s earnings call on Facebook’s advertising, video, messaging, artificial intelligence and virtual reality products and strategy in 2017 and on.
Facebook COO Sheryl Sandberg said last month Facebook announced that advertisers can reach more than one billion people a month on its Audience Network.
Sandberg also said last month Facebook introduced Dynamic Ads for broad audiences to help businesses reach new customers based on their interests on Facebook and other online behavior.
For Facebook video ads, Sandberg said brands should optimize their video ads for Facebook. “A 30-second ad that works really well on other platforms and more traditional platforms can work on ours, but the ones that are optimized and use our targeting really perform better,” she said. “And we’re working hard with advertisers to help them see that.”
Mark Zuckerberg, Facebook CEO, said that video search is a priority for the company.
Facebook added a video tab to the Facebook mobile app in the U.S. last year. “I’ve said before that I see video as a megatrend on the same order as mobile,” he said. “That’s why we’re going to keep putting video first across our family of apps and making it easier for people to capture and share video in new ways.”
The company is focused on short-form video to start, said Zuckerberg. “We want people to think of Facebook as a place for interesting and relevant video content from professional creators as well as their friends,” he said. “Last year we started to invest in more original video content to help seed the ecosystem, and we’re planning to do more in 2017.”
Zuckerberg also said the company is experimenting with live 360-degree video, live audio-only content and live face masks and more camera effects.
On Artificial Intelligence
Zuckerberg said Facebook is working on two artificial intelligence systems for visual content and language.
“On artificial intelligence, we developed a new technique called style transfer that uses AI to study a painting and then can take your photos and videos and draw them in that style in real time on your phone,” he said.
“And if you post on Facebook looking for a place to eat or suggestions for where to go, we can now use AI to understand the text of your post and understand what you’re asking and surface recommendations from the comments.”
As more travel brands determine how to connect with consumers on messaging platforms, Zuckerberg said Facebook Messenger and WhatsApp have distinct user experiences.
Some 400 million people also use Facebook Messenger’s voice and video chat each month, Zuckerberg said. “So Messenger is much more focused on being an expressive and rich environment that has lots of different types of content,” he said. “…whereas WhatsApp I think is a much more utilitarian experience with a much more stark UI where there’s just not as much emphasis on having a lot of different ways to engage.”
Sandberg said about a billion messages per month are exchanged between people and businesses across Facebook Messenger and WhatsApp, “and we think that’s very promising for our ability for people to use this platform to make those connections that will ultimately drive business opportunities,” she said.
On Virtual Reality
Facebook is still early in its 10-year plans for virtual reality but has made good progress, Zuckerberg said.
“In December, we shipped our Touch controllers, and the community response has been very positive,” he said. “Samsung announced that they’ve now shipped more than five million Gear VRs.”
“And we’re bringing more social experiences to VR with apps like Oculus Rooms for Gear VR. We’re going to keep making big investments in VR content, and I’m excited about what’s coming in 2017, from new games to more immersive educational experiences.”
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Photo Credit: Facebook co-founder and CEO Mark Zuckerberg detailed the company's ambitions last week during Facebook's fourth-quarter 2016 earnings call. Pictured is Zuckerberg speaking at Mobile World Congress in Barcelona last year. Mobile World Congress
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