Facebook's Direct Pivot Will Fuel 56% Revenue Increase

Share this article:

Its new emphasis on direct response campaigns will pay off immediately, predicts eMarketer, while its value as a medium for social engagement will diminish.

Demandbase adds social networks to B2B funnels.
Facebook seeks a direct route to top of ad sales list.

Facebook will grow ad revenues by more than 56% this year to nearly $11 billion and give the social network a two-point bump in share of digital ad spending, to 7.8%, according to an analysis released by eMarketer.

Fueling this surge, says eMarketer, is Facebook's recent strategic shift to serve as a platform for direct response advertising rather than as a medium for brands to drive social interaction and consumer engagement. The majority of Facebook's most recent ad initiatives are aimed at marketers with performance goals, the researcher reports.

“Companies still see Facebook as a platform for social brand interactions, but that's no longer the way Facebook is presenting itself,” says Debra Aho Williamson, principal analyst of social media at eMarketer. “Facebook has moved on, but many brands are still marketing the same way they did two years ago.”

In the past five years U.S. advertisers have upped direct efforts at a compound annual rate of 16%, according to eMarketer's “2014 Digital Ad Spending Benchmarks” report issued last month. Over that time, marketers increased spending on direct response campaigns by $4.74 billion as compared to a $2.79 billion rise in brand campaigns. Nearly 60% of ad budgets are now devoted to direct methods, led by retailers (70%), financial services (62%), and automotive (60%).

Despite the sizeable one-year boom it envisions for Facebook, eMarketer is more conservative as to how soon marketers will master its capabilities for direct marketing. “There will be a learning curve,” Williamson says. “Facebook's targeting is getting very sophisticated and advertisers can segment audiences into smaller and smaller buckets, but many brand advertisers are more accustomed to buying ads aimed at mass audiences.”


Share this article:
You must be a registered member of Direct Marketing News to post a comment.
close

Next Article in Social Media

Follow us on Twitter @dmnews

Latest Jobs:

Featured Listings

MediaWhiz

MediaWhiz is an online performance marketing agency that helps clients acquire customers more ...

More in Social Media

A 2014 Snapshot of Social Media Marketing

A 2014 Snapshot of Social Media Marketing

This year, marketers doubled down on social media—and digital plans for 2015 will likely be even more robust.

The Untapped Power of the Superfan

The Untapped Power of the Superfan

Consumers have unprecedented control in the age of social. None more so than the fervent superfan.

The Era of Free Social Media Is at an End, says IPG Social Chief

The Era of Free Social Media Is at ...

Boosting earned media with paid media has become a requirement, Eric Weaver tells a group of beverage industry marketers.