The UK’s online advertising spend increased 10% to nearly £2bn in the first half of 2010 according to the IAB. For the first time the survey estimated spend on social networks, at 3% of total online spend.
Though that’s a rough-and-ready figure, it probably represents around £40-50m in the first 6 months of 2010. There’s no doubt in my mind that a lot of that social spend is going on Facebook and we’ll see that increase considerably through 2011.
The reason? Facebook is building a powerful performance marketing channel that takes advantage of the enormous amount of user data they have. Precisely targeted ads, priced by advertisers through an auction system can be shown to any of Facebook’s 500m active users.
If that ad platform sounds familiar, don’t be surprised – a company called Google has being operating a similar system for the last few years and is doing pretty well from it.
Performance marketing, in its proper sense, is on the up. And it’s changed. Gone are the old ‘throw enough (cheap) mud’ techniques of the very first ad networks. In their place are online ad campaigns that cross the paid media platforms of search, display and social; proper customer attribution analysis, online and offline; measurement based on financial metrics not eyeballs; and predictive and analysis technologies that help marketers plan their budgets based on the best, or combination of the best, performance platforms.
Of course, this kind of marketing has been borne out of the technologies originally associated with search, and so search specialists are leading the way, integrating display and social advertising into their search campaigns.
Automated bidding platforms, predictive modelling techniques and sophisticated analytics have all made it possible to understand the customer path across online platforms from first search to purchase and target based on specific customer data, rather than buying generic space on a single site.
For the right price, Facebook ads can offer great value at the moment. Of course, getting the targeting right, and bidding the right amount based on that targeting, is critical, as it is with search or other display ads. But the biggest change coming is in the way advertisers can work across these platforms. It’s possible now to manage a display, Facebook and search campaign in one place, which means you can adjust the campaign, shift budget from one to the other, and improve performance across all three.
In the new world of performance marketing, the whole really is greater than the sum of its parts.