skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Straight Talk Media & Entertainment

Ovum view

Advertising comprised more than 97% of Facebook's revenue in 2016, at $26.9bn, so it's no surprise that the company is investing heavily in developing new features – such as the recently announced Collection – and comprehensive analytics capabilities. Collection is a mobile-optimized ad format that enables brands to combine a video, slideshow, or banner image with product images. It fits neatly within the four key themes that Facebook outlined during its recent Industry Analyst Day in New York for enabling businesses to not only advertise but also drive sales across all of Facebook's relevant properties: Facebook, Facebook Messenger, and Instagram. The four key themes are shoppable mobile experiences, vertical solutions, harnessing data and machine learning, and addressing scale (including SMEs).

The rise of video is a key driver for Collection

Collection is the latest addition to Facebook's mobile-first rich media advertising inventory, sitting alongside Carousel and Canvas. While Carousel and Canvas enable brands to create ads that use images, videos, texts, and web links (for shopping), Collection also allows brands to partner a hero image or video with a collection of product images within a newsfeed-like layout. Brands can choose which initial four products are shown, and if users tap on the ad they will see a catalog of up to 50 other products, which are selected by Facebook's ad-targeting platform. Selecting a product will take the user to the brand's website to complete the transaction.

According to Maz Sharafi, Facebook's director of monetization, Collection fits into Facebook's strategy of seeking to provide its users with an engaging shopping experience that recommends relevant products while being fast and immersive. The growing popularity of video among consumers and brands helped catalyze the development of Collection, but Facebook was also cognizant of the need to ensure a fast loading experience. Sharafi notes that users will leave a mobile website that takes too long to load.

Within the framework of the four themes it will focus on in 2017, Facebook plans to invest in enhancing its customer acquisition solution for brands and build other products that will help brands to stimulate online, offline, and multichannel sales. Facebook's efforts in this area are centered on mobile app ads and lead ads. These will help brands generate customer lifetime value by targeting an audience that Facebook can predict – with a high level of certainty – will install a brand's app and use it to make purchases or fulfil a call to action (e.g. book a test drive).

To help brands boost online sales, Facebook plans to focus on making Facebook Pixel more accessible to SMEs by partnering with companies such as Shopify. It is engaging with a number of partners in different areas to address the SME market more effectively. Another such partner is mobile payments vendor Square. Facebook has also updated its Dynamic Ads engine to include cross-device retargeting (for capabilities such as product recommendations) and to enable brands to offer features such as strike-through pricing. In addition, Facebook has launched its first vertical-specific ad product on Dynamic Ads – Dynamic Ads for Travel – which is a dedicated advertising capability for the travel industry which allows strike-through pricing and customer reviews to be included within the ad itself. (The company has been testing Dynamic Ads for Retail as well.)

For offline and multichannel sales – that is, connecting mobile advertising and commerce to offline (in-store) purchases – Facebook will focus on three areas: store visits, offline conversions, and retailer solutions. For the former, Facebook will use the location data of opted-in mobile users to show retailers who has visited their stores. It will also use consumers' online activity to predict who will visit stores in the future, showing relevant ads to prospective customers. Meanwhile, Facebook also intends to integrate its Offers capability into all of its ad formats, which will further drive offline conversions for brands.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

Recommended Articles

  • Service Provider Markets, Consumer & Entertainment Services,...

    MWC 2018 Highlights

    By Ronan De Renesse 27 Feb 2018

    Over 20 of our senior Ovum analysts and consultants attended this year’s Mobile World Congress in Barcelona at the end of February. In between meetings, briefings and presentations, our analyst team were blogging and tweeting about key developments, trends and rumors. Have a look through our daily MWC 2018 Highlights to find out what happened.

    Topics 5G AI IoT Cloud Payments SDN/NFV Smart home

  • Internet of Things

    IoT Viewpoints 2018

    IoT Viewpoints explore the IoT opportunity in 2018 and beyond. Download our latest e-book to get our newest collection of thought leadership articles on the emerging IoT trends, technologies and opportunities.

    Topics IoT

  • Consumer & Entertainment Services

    US pay TV: Is it facing an existential threat?

    By Adam Thomas 28 Mar 2018

    With US pay TV having endured the worst year in its history, thoughts have inevitably turned to the future. The likelihood remains that the immediate future will remain highly uncomfortable for everyone except the scaled multinational digital platforms.

;

Have any questions? Speak to a Specialist

Europe, Middle East & Africa team - +44 (0) 207 017 7700


Asia-Pacific team - +61 (0)3 960 16700

US team - +1 646 957 8878

Email us at ClientServices@ovum.com

You can also contact your named/allocated Client Services Executive using their direct dial.
PR enquiries - Call us at +44 788 597 5160 or email us at pr@ovum.com

Contact marketing - 
marketingdepartment@ovum.com

Already an Ovum client? Login to the Knowledge Center now