Facebook's Audience Network: What It Means For Mobile Ads

Facebook, the social media giant that has already made a large dent in the mobile ad ecosystem, today showed it has no plans to stop the momentum: Welcome, Audience Network.

Before today, there were already several factors working in Facebook’s favor: its reach among avid social users, its engaged and captive audience, and its trove of affinity data, which my colleague Nate Elliott talks more about in his blog post here.

After its Audience Network announcement today, Facebook is breaking the application of its tools and its data out of its own silo, and this could benefit several players:

  • Other developers and publishers could make more money by offering Facebook data-infused mobile ads.
  • Advertisers can dip into Facebook’s rich affinity data to target their ads across other mobile properties.
  • And of course, Facebook itself just extended its potential revenue base and faces a new competitive set with the likes of Google AdMob and MIllennialMedia.
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Facebook Begins Building The Database Of Affinity

It’s been clear for a while now that the greatest value of social media to marketers won’t come from placing ads on social sites — it’ll come from using social data to improve the ads marketers place everywhere else. We call this idea the database of affinity, and we believe it could be the Holy Grail for more-effective brand marketing. For nearly a year, Google has helped marketers use the database of affinity to improve the targeting of their online display ads. And today Facebook has finally started to build the database of affinity that has always been its birthright, launching a mobile ad network.

This move is fantastic, if long overdue, news for marketers. It has the potential to improve the performance of all mobile advertising. And if Facebook grows its ad targeting business into other channels and works to better analyze and utilize its data (something it’s lagged at in the past), it could revolutionize brand advertising.

For more analysis on what this means to the mobile ad ecosystem, read my colleague Jenny Wise' take here.

Instagram Is The King Of Social Engagement

Recently, Forrester studied more than 3 million user interactions with more than 2,500 brand posts on seven social networks and confirmed what marketers have long suspected: People don’t engage with branded social content very often.

On six of the seven social networks, the brands we studied achieved an engagement rate of less than 0.1%. For every 1 million Facebook fans those brands had collected, each of their posts received only about 700 likes, comments, and shares. On Twitter, the ratio was about 300 interactions per 1 million followers.

But one social network absolutely blew the others away when it came to delivering engagement: Instagram. Our study found that top brands’ Instagram posts generated a per-follower engagement rate of 4.21%. That means Instagram delivered these brands 58 times more engagement per follower than Facebook, and 120 times more engagement per follower than Twitter.

Instagram offers brands 58 times more engagement per follower than Facebook

What does this higher engagement rate look like in practice? Last month, Red Bull posted a video of a unique snowboarding half-pipe on both Facebook and Instagram. A few days later, we noted that the brand’s 43 million Facebook fans had liked the video just 2,600 times (a 0.006% likes-per-fan rate), while its 1.2 million Instagram followers had liked the video more than 36,000 times (a 3% likes-per-follower rate).

Red Bull's Facebook post           Red Bull's Instagram post

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Design A Best-In-Class Mobile Experience

A lot of people have been talking about Facebook’s new Nearby Friends feature for their mobile app, which gives users the ability to see which friends are nearby. But less discussed, and perhaps just as significant, is another change — to a more contextually-relevant Facebook profile.

In the past, when you checked out other users’ profiles, you would see the same static information including their profile photo and links to their friends and “about” pages. There were two problems with this. First, the information is rarely updated, so it becomes stale. Second, if you don’t know the person, it takes a bit of digging through their pages to find out if you know them or have anything in common.

The Facebook iPhone app’s recent update addresses these concerns by taking a contextual approach. Specifically, it presents more personalized and dynamic information, such as whether you and this person share any mutual friends, whether you happen to live in the same city, and what the friend has been up to recently. The app also prioritizes this information, so it’s one of the first things you see after you click on a user’s profile.

In fact, we’ve seen this trend in mobile apps — the best apps are moving away from static web-like experiences and are delivering more personal, relevant content, fast. In my report, "The Best And Worst Of Mobile User Experience," I found that leading mobile user experiences share common attributes that separate them from the pack. These leading experiences:

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Mobile & Social Are Two Sides Of The Same Coin

The vast majority of Facebook and Twitter usage is coming from mobile devices, and both companies generate a significant proportion of their revenues via mobile ads (53% for Facebook and more than 70% for Twitter end Q4 2013).

  • Facebook is splitting into a collection of apps (Instagram, WhatsApp, Messenger, Paper, etc…) and likely to announce a mobile ad network at its F8 developer conference in San Francisco in a couple of days. While failing brand marketers, according to my colleague Nate Elliott, Facebook is increasingly powerful at driving app installs for gaming companies and performance-based marketers who have a clear mobile app business model.
  • That’s why Twitter introduced mobile app install ads a couple of days ago and leveraged its MoPub acquisition by integrating ad-buying capabilities. Twitter is less and less about micro-blogging and more and more about traditional media – the place to be for real-time information consumption.
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Facebook Announces Nearby Friends Feature

Facebook today announced a new optional feature– the ability to see which friends, or friends within a created group, are nearby. The social network is smartly looking to better serve its members who have made the mobile mind shift, expecting to get what they want in their immediate context and moment of need. In this case – knowing when a friend is nearby.

Prviacy will be a concern with this feature, but users are protected by opt-in’s and by only mentioning how close someone is, not their specific location. Connecting directly in person requires a number of steps including messaging and permission. A few thoughts:

1) This isn’t original, but Facebook has a better shot at success than the original services. 

About 10 years ago, Sam Altman started a company called Loopt that he sold about two years ago to Green Dot for $43.4M. It started out as friends connecting, but eventually needed to make money. Mobile advertising wasn’t a big market 10 years ago – in fact, it is still somewhat small today. But Facebook has two key advantages now: first, they have more than one billion users so they don’t have to recruit (and many of my friends will already have the app on their phone). Second, they don’t have pressure to make money near term. Facebook will win if even 5% or 10% of their members adopt. 

2) It’s a smart mobile app development strategy.

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Facebook Shatters Into Apps — And It's The Only Way Forward

Fixed diptych

Farhad Manjoo says "The Future of Facebook May Not Say ‘Facebook’" in the New York Times. Read the article, because it clearly points the direction for the future of Facebook (and of nearly everything else). From the article:

“What we’re doing with Creative Labs is basically unbundling the big blue app,” Mr. Zuckerberg said in a recent interview at the firm’s headquarters in Menlo Park, Calif.
 
In the past, he said, Facebook was one big thing, a website or mobile app that let you indulge all of your online social needs. Now, on mobile phones especially, Facebook will begin to splinter into many smaller, more narrowly focused services, some of which won’t even carry Facebook’s branding, and may not require a Facebook account to use.

In retrospect, this was inevitable. Here are two reasons why.

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Your Voice Will Control The Future

Google acquired Nest for billions, and then Facebook spent several more billion on Oculus VR. We’re only a few months into 2014, and already billions have been spent by some of the world’s largest digital players, with each of these companies eager to own the next big thing. Mobile is right here, right now, but everyone knows that very soon, there will be something else. But what else?

In the battle to find and claim the next device that everyone will want, these companies will soon realize that next big thing is not a thing at all: It’s your voice.

Voice control suffers from the same things plaguing augmented reality or virtual reality: It has been around for so long that we think we know what it is. Any fan of Star Trek: The Next Generation knows that voice control involves invoking an invisible computer with a command, “Computer,” followed by a query, “How many Klingons does it take to screw in a light bulb?” Maybe that’s a question you don’t want the answer to, but the computer — as voiced by Majel Barrett in the TV series — would know it.

It’s possibly a long history of popular depictions of voice control that made us collectively show so much enthusiasm for Siri when Apple first debuted it in 2011. It’s also partly to blame for why we quickly turned on Siri, declaring her soothing semi-robotic tones to be merely amusing at best or irrelevant at worst.

When Microsoft recently announced its long-rumored Cortana voice service for Windows Phone 8.1 as a catch-up to both Siri and Google Now’s own voice interface, the interest was modest, perhaps because if Siri hasn’t changed the way millions of Apple users use millions of Apple devices, how can Microsoft initiate a wave of behavior change when it has so few Windows Phone users?

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Do People Complain More On Twitter Or On Facebook?

In researching our recent report on Google Plus, I asked social listening and intelligence provider Converseon for some help. They agreed to review more than 2,500 direct user interactions with 20 leading brands on Facebook, Twitter, and Google Plus. (They tracked only direct user interactions, meaning posts directly onto brands' Facebook or Google Plus pages, comments on brands' Facebook or Google Plus posts, and @mentions of brands on Twitter. The brands were selected from among Interbrand's list of top global brands.) The goal? To determine whether those user interactions were mostly positive or mostly negative and to see whether the sentiment of user interactions varied by site.

In the end, that research didn't make it into the final report — but I thought you might like to see the data anyway, and the folks at Converseon agreed to let me share the results.

We expected there might be big differences in the tone of users' interactions with brands on each site. But it turns out about one-half of user interaction on each site was positive. And as for the question in the title of this blog post ("Do people complain more on Twitter or on Facebook?") — exactly one-fifth of user interaction on both Facebook and Twitter was negative.

Sentiment of user interactions with brands on Facebook, Google Plus, and Twitter

Thanks again to Converseon for pulling this data and allowing us to share it here.