News

POV: Facebook Bandwidth Targeting

Mindshare Point of View: Facebook’s new bandwidth targeting mobile ad technology is intended to increase revenue in emerging markets, strengthen its commitment to advertisers around the visibility of ads and create a best in class example of adaptive marketing.

Details

The new feature accesses your Internet connection (when you open the Facebook Mobile App) before deciding whether to serve you heavy format ads (like video). This allows Facebook to serve you a heavy format ad only if it is sure it will download and play quickly. This optimizes ad impressions for Facebook and provides a guarantee for advertisers that their ad played easily.

There will be value for Facebook in the core markets of North America and Europe (where it currently generates 72% of its revenue), however the biggest opportunity is in developing countries where Internet connections can be inconsistent and feature phones (not as good at streaming) are more popular.

Implications

It’s an immediate win-win for both advertisers and Facebook, and one in which advertisers aren’t required to create any new ad units. Of course this doesn’t mean that Facebook video advertising is the right option for your advertising, but it increases the value of this ad format.

A little more broadly this also highlights the benefits for Facebook of owning both the publishing platform and the advertising network. This end-to-end view of its advertising ecosystem has enabled Facebook to gain first-mover advantage.

For advertisers it provides better ad visibility and verification. This helps in the ongoing battle for viewability with Facebook and the wider industry working to ensure that ads served are actually being seen. Facebook’s new feature will mean the ads will not only be seen, but be seen without buffering, which typically is a deterrent for consumers to engage with video advertising. This is particularly big news in the less than mature mobile video marketplace.

Much more broadly it is a smart example of Adaptive Marketing, which is all about watching the data and reapplying learnings to improve. Facebook has taken a data point that surfaces in one part of its business (app stability and user experience) and applied it to another part of its business (ad sales & delivery) to improve an existing product.

Mindshare POV

There will not be many times when Facebook will roll-out a new advertising product which will not cause an uproar amongst users and will increase revenue immediately, but it has succeeded this time.

The application of Adaptive Marketing principles is an example of smart business practice in this increasingly rich data world.