When Facebook enabled airlines and hotels to build booking functionality into their Facebook pages years ago, it was a total bust. But Instagram and Whatsapp seem to have an engagement level that was missing last time around, making these e-commerce moves appear to be a lot more feasible.
HotelTonight’s story, for example, featured one of its marketing managers, Jess K., who cited her favorite hotels to stay at when traveling for work, and noted that it’s easy to use various filters in the HotelTonight app to focus on what you’re looking for in a hotel.
“Swipe up to customize your search,” the HotelTonight story said, and if you did, you would have left Instagram and opened the HotelTonight app to start a hotel search.
Facebook officials disclosed that the social network now has two million Stories’ advertisers across its platforms, and this year the company will focus on making their advertisements more relevant and much more transactional.
[Update: A Facebook spokesperson said Thursday “that we didn’t announce anything new specific to travel or travel booking on our earnings call and we don’t have plans to integrate travel booking within the app at this time.” Users of Travel Ads can already encourage consumers to book on their websites or in their apps.]
Rest assured there will be a lot more travel and other advertisers primarily using Instagram, but also Facebook, Messenger, and WhatsApp stories this year, and there will be plenty of booking functionality, too.
“The big things that I think we want to make sure that we nail in Instagram especially are discovery,” founder and CEO Mark Zuckerberg told analysts Wednesday during Facebook’s fourth quarter and full-year earnings call. “People are already doing a lot of commerce activity and are really interested in following brands, and I think, making sure that works … is a big deal.”
But e-commerce and transactions will get a lot of attention.
“But I think there’s also a very big opportunity in basically enabling the transactions and making it so that the buying experience is good and that when you buy from someone from a seller, that you know that you can trust them, that you’re going to have a good experience in facilitating and making that go well,” Zuckerberg said.
Game-Changer in Travel? Could Be
That Facebook will encourage advertisers to get transactional in Stories across Instagram, Facebook, and messaging apps Facebook Messenger and WhatsApp, isn’t necessarily a game-changer — although it could be. After all, years ago travel brands built booking features into Facebook pages, but this functionality didn’t really get broad engagement from consumers, and many brands let booking features fade away.
But this time around, given the intense engagement on Instagram and WhatsApp —two platforms that Facebook acquired and didn’t build itself — the e-commerce potential feels much different. For December, Facebook said it accommodated 1.52 billion daily active users on average, and that was a 9 percent bump year over year.
One thing that Facebook already has done for advertisers, said chief operating officer Sheryl Sandberg, is launch and expand automatic placements, which “make it as easy as possible for marketers to get to the format of Stories and then deliver the ads where they’re going to get the best experience and the best ROI (return on investment). Now right now, one of the interesting things about Stories is there’s a benefit to being an early adopter so the pricing is really attractive.”
Revenue Growth Deceleration
The pricing for advertising in Stories is likely lower now than what it could be in the future, which is a benefit for advertisers, but a challenge for Facebook. Officials said a mix shift in advertising products toward Stories will contribute to a deceleration in the growth of Facebook’s revenue this year.
In the first quarter of 2019, Facebook expects its revenue to decelerate “by a mid-single-digit percentage compared with the fourth quarter of 2018. Facebook also expects its revenue growth to decelerate sequentially throughout the year.
In 2018, Facebook notched net income of $22.1 billion, a 38.7 percent increase, on revenue of $55.8 billion, a 38.7 percent leap.
On the advertising front, Sandberg said Facebook is investing in artificial intelligence (AI) “to make ads more relevant and effective.”
“In Q4, we developed new AI ranking models to have people see ads they’re more likely to be interested in,” Sandberg said. “We’re also using AI to identify and more quickly review ads that might violate our policies, which is particularly important during the U.S. midterm elections. Looking ahead, we see more opportunities to use AI to keep people safe on Facebook and help businesses grow.”
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Photo credit: Facebook sees a lot more e-commerce potential in Stories and in messaging apps. Pictured are Instagram Stories from United Airlines, Marriott International, and Hilton Hotels. Skift