POV: Facebook Boosts Its Third-Party App Ads

Mindshare Point of View:

Last week, Facebook announced that it will be extending its autoplay video ads, carousel ads, full-screen-click-to play ads, and dynamic product ads to third-party apps which sell advertising space through its mobile ad network, Audience Network.

Details and Implications
The additional ad formats will be available to all advertisers and developers who have subscribed to Facebook’s Audience Network (launched in 2014) and will impact upon the thousands of third-party apps which are affiliated with the network. The video ads will be compatible with both iOS and Android. It is also important to note, that advertisers are not permitted to buy ads per se on the mobile network. Instead Facebook leverages ads which already run on its own mobile site, and assigns them to apps within the network based upon the targeting parameters previously dictated by advertisers.

For brands and advertisers, the ability to extend their reach across an array of apps with a number of ad formats should be viewed as an exciting development. Autoplay and full-screen-click-to-play ads have been a success thus far for advertisers on Facebook’s mobile site, and are now a familiar concept to users. Furthermore, the addition of carrousel or slide show ads to third-party apps will also permit advertisers and brands to display several aspects of the product via sequential storytelling to a wider audience.

By far the most poignant development is the extension of dynamic product ads to third-party apps. Dynamic product ads are used by retailers to serve ads to individuals who have previously browsed on their e-commerce sites. In addition to this extension, Facebook is now permitting advertisers to target those individuals who have actually purchased items from their site. Thus individuals most likely to make a purchase are prioritized, and can even be retargeted with products which are complementary to their previous purchases.

This move certainly sees Facebook expanding its digital advertising offering, and is hardly surprising given the revenue Facebook has generated from its autoplay ads. Facebook is also acting in the interest of its own users, by selling more ads to marketers without bombarding its own users with surplus ads on their newsfeeds. Third-party apps should also see a greater return with a more dynamic range of ad formats on offer.

Summary/ POV
At the end of the last quarter, Facebook’s mobile advertising accounted for 76% of its overall advertising revenue – up from 62% in 2014. However, Facebook’s total market share of mobile advertising in 2014 was 17% to Google’s 38%. It therefore seems a natural progression for Facebook to leverage its most successful ad formats and extend them to third-party apps. In addition, Facebook is also diversifying its ad offering on Instagram, recently launching spherical and embedded videos. For brands and advertisers, not only will this development result in extended reach and improved retargeting ability, but also an increase in contextually relevant moments available to connect with their audience.