Facebook Inc's Fastest-Growing Group of Advertisers Might Surprise You

Source: Facebookbrand.com

It’s no secret that Facebook (NASDAQ:FB) has quickly turned itself into a digital — and particularly mobile — advertising juggernaut. The company’s second quarter ad revenue was up 43% year-over-year. What’s more, its share of the overall digital advertising market is expected to grow from 10.6% last year to more than 16% by 2017, per eMarketer.

It has been able to do that by leveraging its huge user base of nearly 1.5 billion people and all the information they provide as they share experiences, photographs, and opinions, to target the right ads at the most likely prospective customers.

But those advertisers seeking to sell clothes, cars, and concert tickets to eager consumers are only part of Facebook’s advertising base. The other group of advertisers, businesses courting other businesses, is actually the company’s faster area of growth — and not by a small margin.

But before we get into the numbers, let’s take a quick step back.

B2B is twice overall growth
Based on research from AdRoll that surveyed 1,000 marketers, it seems the area of advertising that most interests these businesses on Facebook is retargeting (and it’s important to note that retargeting is AdRoll’s bread and butter). You’ve all seen these ads — turn to Google to find something you’re looking for, visit some sites that sell related products, and then later find yourself on a different site looking at ads promoting that earlier business or the products you browsed. Sometimes, it seems a bit creepy, but it also can be very effective.

Overall, spending on retargeting ads on Facebook was up 31% year-over-year, according to AdRoll. But growth in spending by companies dealing in business-to-business, or B2B, sales was up by nearly twice that at 61% over the prior year.

This increased spending is no coincidence. In late 2013, Facebook rolled out a platform it calls “Custom Audiences” that enables businesses to effectively retarget potential customers and reach them across different devices. While the company doesn’t generally address B2B specifically, it’s an important segment of the market.

Tapping a big market
B2B companies will spend about $77 billion on digital advertising and marketing this year. Facebook, with annual revenue of about $12 billion, will surely want to continue growing its share of that market.

AdRoll President Adam Berke talked with AdWeek’s Inside Facebook about the growth of B2B retargeting on the platform and why it’s a big area of growth: “[I]t’s very hard to find B2B decision makers and CIO types and people who are making those types of buying decisions for their companies,” he noted.

Unlike the store that’s trying to sell you new shoes, the B2B companies are using Facebook not to make direct sales but to appeal in other ways. Using analytics, the businesses look to tailor what they offer the prospective client. For example, one who had been searching for information might be offered a white paper or other material. Another who had gone deeper into the buying process might be offered a free trial.

One step in a longer sales effort
The actual conversion to a sale typically takes place outside the Facebook platform, but because Facebook had proved so valuable in reaching the customer, the B2B companies are willing to pay to keep them in the loop.

By adding Facebook ads, businesses were able to nearly double the reach of their ad impressions, AdRoll reported. What’s more, the advertisers found they were spending about one-third less in click costs for each acquisition they made, a sign that the ads were proving more effective.

It’s no Oculus Rift but …
The growth in B2B advertising is a further sign of why Facebook’s platform has been able to build such a commanding position in the digital and mobile ad markets. It’s become a place where people spend a greater part of their lives each passing year. That’s no longer limited to leisure time — it includes time at work, and it includes those people who are in positions of making purchasing decisions for the companies they work for — or own.

The B2B market won’t generate a lot of buzz around earnings. It just isn’t that sexy for a company with so many headline-worthy projects in the works, but it does provide Facebook with a significant avenue of revenue growth.

The next billion-dollar iSecret
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John-Erik Koslosky owns shares of Facebook and Google (A shares). The Motley Fool owns and recommends Facebook, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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Facebook Inc"s Fastest-Growing Group of Advertisers Might Surprise You

A message for email: Your days might be numbered - LA Times

Everyone hates email. It wastes our time, too much of it is spam. It’s ugly, it’s slow, it’s unreliable. And did I mention the spam?

Perhaps the worst thing about email is the way it makes us unlikable. I’m a reasonably nice person, but when I start sending emails, watch out. What I think is a perfectly ordinary, level-headed email often comes across to other people as demanding or insensitive.

It’s not just me — I’ve seen people get enraged at each other over a seemingly innocuous intra-office email thread that suddenly escalates like an international border incident. But when those people get together face to face, the anger and the tension dissipate in minutes. The problem in these situations is clear: It’s the way email enforces a kind of formality, combined with lack of nuance. The combination can be toxic.

No wonder people are fleeing to messaging apps including WhatsApp, Facebook Messenger, Snapchat and Kik. And on the enterprise side, no wonder Slack’s business is booming: If you can get your internal company communications off email and onto a fun platform that encourages productivity, shareability and searchability — while supporting GIFs and emoji — it’s a win for everyone.

Yes, there’s no doubt about it: Email is an unholy hack, a broken mess, an ever-growing floating island of garbage and dead fish swirling around in some forgotten part of the ocean. It needs to die, and the sooner the better.

And yet.

Let’s just imagine a future without email — maybe just a few years hence, when these messaging apps are widespread enough that you could legitimately say “I’m deleting my email account” and not be seen as strange or experimental. And, more important, when you could do that and still be confident that the right people could reach you, whether that’s by Twitter DM or Facebook or Slack.

First of all, none of the messaging apps has anywhere near the market penetration and reach of email, which reaches 2.5 billion people today, according to the Radicati Group. So you’ll probably need to keep a few messaging apps: Facebook Messenger for your friends using that, Snapchat for your other group of friends, Slack for work and so on.

Second, these messaging apps all have their own ways of doing things, so each has its own rules and its own interface. Lest you think that’s a small problem, just look at how often people mistakenly send private direct messages to all their Twitter followers. Even the CFO of Twitter made that mistake, and who can blame him? It’s ridiculously easy to do this. So you need to use extra caution with Twitter, WhatsApp, Snapchat and whichever apps you’re using, to ensure that you are using each one the right way, and not committing some horribly embarrassing (or business-threatening) mistake.

Third, they’re not interoperable. Each messaging app has its own separate platform, its own notifications on my mobile devices, its own list of my friends. You can’t send a message from Messenger to your friend on KakaoTalk, and you never will be able to. There’s no incentive for these companies to open up their message platforms to all comers.

Fourth, these platforms often lack fundamental features that are actually quite useful. Slack, for instance, still doesn’t have threaded messages. If you don’t reply to someone’s post super quick, you might as well forget about it, because someone else is going to start another conversation and then no one will know what you’re replying to. (I know there is a workaround, but it’s kludgey.) Or how about filters and folders? It’s often quite useful to filter messages from a certain person — your boss, for example — into a special high-priority folder, where you can give it special attention, or save it along with all the other messages that person sent.

Fifth: Spam. You may not have noticed it, but if you’re a Gmail user, outright spam is getting rarer and rarer in your inbox, thanks to ever more sophisticated spam filtering. Google has spent more than a decade honing its spam algorithms, and the result works pretty darn well. Twitter, by contrast: If you missed the old days of X10 camera spam and offers for green card lawyers, just turn on the setting that lets anyone send you a direct message even if you’re not following them. Google’s spam mechanism has the equivalent of a PhD, while Twitter’s is still in kindergarten.

Finally, there’s one more angle to consider: Email, from a marketer’s point of view, actually works, with a return on investment of 38 to 1, according to DBS data. There’s a reason that Twitter and Slack, despite being their own messaging platforms, still send daily emails to people. For many Internet users, email is still the way they’d prefer to be contacted, and companies are happy to oblige, because engagement levels are so much higher than in other media.

And email marketing companies are thriving — Campaign Monitor, to name one example, raised $250 million last year.

Now, you could argue that this is exactly the problem: Too much email marketing is making email useful only for marketing. But I think the reason email marketing works so effectively is because, at the end of the day, people are still very attached to their inboxes.

We may complain about email. We may suffer from crappy email clients and all-company email threads that never end. Our inboxes may never get close to zero.

But if the current crop of messaging apps really did succeed in killing off email, I think we would all start to miss it pretty soon.

Dylan Tweney is a content strategist and journalist. His weekly column, Dylan’s Desk appears on Venture Beat.

dylan@venturebeat.com

Twitter: @dylan20

Web: Tweney.com

Copyright © 2015, Los Angeles Times

A message for email: Your days might be numbered - LA Times