Facebook: Cross-Device Tracking and Mobile Ad Domination
Published: August 25, 2014
Author: Molly Shotwell
Facebook has recently announced that it would eliminate a major obstacle discouraging advertisers from transitioning to mobile devices: cross-device tracking. Advertisers will now be able to see what devices people use to view their ads, along with what device they used to take action as a result of viewing the ad.
This addresses a major concern from advertisers who were frustrated with the fact that they had no way to accurately calculate conversions from those who viewed ads on mobile devices and then took action on a different device.
This cross-device conversion method requires Facebook trackers that can trail whatever conversions the advertisers want and trace these conversions back to check whether the customer viewed a relevant ad from Facebook. This doesn’t track those who opt for offline conversions like purchases over the phone, something Facebook already does with Datalogix. Facebook’s goal is to allow marketers to see that even though customers tend to make fewer purchases through their smartphones, smartphone ads can lead to conversions on other devices.
It’s no surprise that Facebook is trying to make mobile ads more lucrative, as 62% of their ad revenue in Q2 came from mobile. They also control over a third of the mobile display advertising market – over twice the amount of its nearest competitor, Google. Facebook stands poised to reap most of the initial benefits of this new development, but now that US adults spend 40 minutes a day more on mobile devices than on desktops and laptops, other companies will hope to follow in their footsteps.
A study by On Device Research showed that 70 percent of users view mobile ads on smartphones as personal invitations rather than personal invasions. Of that 70 percent, over half of them click on ads in order to see a page showing a whole range of similar products from the same company.
What makes mobile ads more effective than ads on desktop? Email and text message have been among many marketer’s tools for improving relationships with previous customers, but are less successful at acquiring new ones. That’s where smartphones come in. Smartphones ads are strong in that they make users feel like they’re in a position of power; they can easily opt out of or disable display ads and push notification ads if they so desire.
The popularity of smartphones is not only changing how advertisers are analyzing their data, but also the ads themselves. Native ads, or advertisements that are designed to blend in with the rest of the webpage in order to be contextually relevant, are taking over. Banner ads have been in decline since 2010, when the excess of advertising inventory pushed down prices while CPMs remained stagnant. Eventually, people discovered banners were performing so badly that even banner ad pioneer Yahoo announced it would phase out the use of its invention by the end of 2014 and replace them with native ads.
Why? Mobile banner ads tend to see low click-through rates and even lower engagement. Smartphone users tend to click on banner ads by accident due to the nature of small touchscreens, and consumers find them intrusive. Considering how many people own mobile devices and the amount of time they spend on them, advertisements have to be tailored to this growing audience.