Industry Impressions Of Facebook Display Advertising

Two weeks ago, media outlets reported new comScore data showing Facebook’s continued growth resulting in the delivery of nearly 28% of U.S. display advertising impressions – far outpacing others such as Yahoo! and Google, according to comScore.

In the past, AdExchanger has reviewed the difference between a social display and “regular” display impression in the past. But given Facebook’s increasing scale, if not dominance, AdExchanger reached out to several executives in the advertising ecosystem and asked about Facebook display’s “first place finish,” specifically.

The question:

“Recently it was reported that on an owned-and-operated, impression basis, Facebook controlled the largest amount of all display advertising impressions. What’s your take on this stat?”

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John Montgomery, COO, GroupM Interaction, North America (WPP Group)

“One can understand why this claim, based on these numbers will be used liberally at this time. ‘Display Impressions’ are a currency that the investment community understands – and if you lead in impressions, a logical conclusion may be that you will earn the most revenue from advertising. Of course, it isn’t as simple as that. For the bulk of their display impressions, Facebook has relatively low yield compared to premium publishers like Yahoo, Turner, New York Times. So their performance would be less impressive if one examines yield, revenue per user and other value based measures.

In terms of revenue potential, Facebook hasn’t scratched the surface yet. The real promise almost certainly does not just lie with display revenue on the desktop.

What Facebook has is 840MM people who engage with the platform enthusiastically and often, and that is where the real promise lies. Facebook does not yet monetize its mobile platform, yet a massive 400MM+ users access Facebook remotely, a huge revenue opportunity in itself. In addition, there are non-advertising revenue sources to capitalize on across the huge user base, like a payment platform (which is still nascent) and revenue shares from games and applications.

If Facebook is overwhelmed by the insatiable demands from the investment machine and are forced to grow at the cost of the user experience (privacy being just one concern) there is little doubt that Mark Zuckerberg will have to face hundreds of millions of irate customers who will feel that the company has sold out to the man. But, if they can stay true to the ideal of ‘making money so we can make a better product’ and grow at a manageable rate, the potential for Facebook to be a Google, rivaling the 800 pound digital media Gorilla, are promising.”

Kurt Unkel, EVP, General Manager, VivaKi Nerve Center (Publicis Groupe)

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“Facebook creates a ton of ad impressions and is undoubtedly the biggest Display source around at the moment. Much like AOL in the late 90s, Yahoo! in the early part of 2000 or Google (GCN & Search) in the mid 00’s, Facebook has been garnering a great deal of buzz about where the company will go from here. The details may be different but the theme is the same: to be open or not to be open. Each one of these properties went through a phase in which they were not open and did not feel the need to operate like everyone else. Their audiences, insights and operations were pitched as ‘superior’ to the norm and if you wanted to work with them, you had to adhere to their standard vs. the industry’s standard. Some of this thinking was justifiable as, in many cases, these companies had created something altogether new to the industry and true standards did not yet exist to support them. And it was likely fear for the unknown that led to these players to not implement industry standards quickly. However, once the standards were implemented, these properties were able to finally grow to their true potential. As we know, history repeats itself, so we have a pretty good idea about where this is going. Remember ‘rainman’ inventory on AOL? Or no 3rd party ad-serving on GCN (Google’s Content Network)?

What I’m most curious about is whether or not Facebook can take a lesson from the past and embrace standards sooner so they can ‘jump the curve’ vs. fall victim to it.”

Michael Brunick, VP, Strategic Strategic Solutions, MAP (Mediabrands Audience Platform – IPG)

“The news of Facebook’s position as the largest source of display advertising impressions comes at a pivotal time for Facebook, and for display advertising in general. As display – and as programmatic buying across all channels, including video, mobile and social – becomes a larger component of most advertisers’ marketing activity, the value that is generated by that activity becomes increasingly crucial to help driving the desired business outcomes for our clients.

A key component to generating that positive impact will depend on the quality of the audience you can deliver through those impressions. Scale – as sheer volume – is only one variable in the equation; quality is another, as is environment. However, the combination of multiple attributes together: quality audience, at scale, delivered in a relevant way and in an engaging environment – that is the recipe for success.

In discussing this with my colleague Clay McDaniel, who runs our social marketing platform Spring Creek Group, he said, ‘We already knew that Facebook had become one of the most powerful platforms for brands to provide interactive applications and marketing content to customers, and now they have become one of the most important paid media networks as well.’ And that seems to be the key here – as Facebook has proven to have that valuable, engaged audience, it is now clear that we have the ability to harness that audience in truly meaningful ways for our clients.”

By John Ebbert

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