It looks like Google AdWords will finally have some serious competition. Facebook is testing its search ads in Newsfeed and Marketplace search results.
Facebook’s Sponsored Results
This isn’t the first time that Facebook has done ad testing. The tech giant launched Sponsored Results in 2012, but it was shut down in 2013, despite high click-through rates reported by advertisers at first.
Game development, software development, retail, and other kinds of companies use Sponsored Results. This allowed them to inject ad links into their Facebook apps, posts, and pages. Ads could also appear in the search autosuggest results.
The strategy allowed advertisers to target specific brands, Facebook pages, and companies. It effectively gave an advertiser the ability to steal traffic from a competitor. Just imagine the battle that went on with competitors.
Facebook’s search ads
Facebook is now launching search ads. Only this time, the search ads are for retail, e-commerce, and automotive advertisers in the US and Canada.
This small set of advertisers can only extend their News Feed ads to the new placement, which is “Search.” This is done through the Facebook Ad Manager. It is practically the same with how the Instagram or Facebook Audience Network works.
Facebook search ads are still at its testing phase. Here are some things you need to know about them:
- No video ads: Video ads aren’t allowed, at least not during the testing period. This could (and should) change, especially since more people turn to videos, and marketers are quick to include videos in their strategies.
- Mobile only: Search ads won’t be appearing on desktops; it is currently for mobile only. Marketplace search ads appear on both iOS and Android while Facebook search ads are only on Android at this time.
The dominance of mobile marketing means creating mobile-first content. Did you know that 57% of Facebook advertising budgets dedicated to mobile? Globally, mobile advertising revenue represented approximately 91% of the revenue in the first quarter of 2018. pic.twitter.com/dQaECeZFwQ
— Momentive Media (@MomentiveMedia) February 25, 2019
- Ads will be tagged as Sponsored: Similar to “Sponsored Results,” search ads will bear the Sponsored tag to let users know that these are paid ads.
- Transparency controls: Search ads transparency controls is the same as those of “Why Am I Seeing This?”
- No opt-out: Users won’t be able to disable search ads. They can hide search ads the same way they hide News Feed ads—by clicking on the drop-down arrow beside the ads. However, this action won’t affect the visibility of other search ads.
- Looks like News Feed ads: Search ads will contain a headline, an image, text, and a link that can lead users to other websites.
- No negative keywords: At this moment, advertisers can’t choose keywords to advertise against. Their ads will probably appear in search terms that are related to auto or retail discussions. However, the ad’s location or placement will work great in driving advertisers down the conversion funnel since ads can reach potential clients who already have the intent to buy.
These are the basic things you have to know about Facebook’s search ads. Once testing is done, Facebook will evaluate and decide whether to roll out search ads to more countries and more industries.
Why is Facebook reintroducing search ads?
Sponsored Results was mainly developed to gain more revenue after a mishandled IPO issue in 2012. The search ads that Facebook is testing now are no different. This is one of Facebook’s attempts to generate more profit as revenue is declining for the following reasons:
- News Feed ad space is running out.
- Facebook has hit saturation in developed countries.
- Users numbers dropped for the first time ever in 2018.
- Advertisers are still trying to figure out how to use Stories.
Among its revenue streams, Facebook is banking on search ads to generate a much-needed boost in income. Although revenue growth was at 33% year-over-year in Q3 2018, this is 49% lower than the year-on-year gain in 2017 and 59% lower than in 2016.
The decline in revenue and poor projections in income have caused Facebook’s share price to go down. This scenario puts a lot of pressure on Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg. That’s why Facebook is looking for ways to increase the pace. Not to mention the privacy and security issues that have bombarded Facebook left and right.
Still, 33% revenue growth is impressive, especially with Facebook’s decade-long presence. It shows that Facebook is far from becoming irrelevant and ineffective.
Digital #Advertising Revenue is getting more intelligent and fractured, pressuring #google and #facebook. And check out #Amazon! Lots of room for innovation and opportunity for "Others". pic.twitter.com/7SmmTdNbW5
— Eric Leiserson (@EricLeiserson) February 27, 2019
Other challenges with search ads
Apart from addressing declining revenues, there are two challenges Facebook faces in deploying search ads. One, how Facebook would change the way people use Facebook search. Two, how users will react to seeing ads in their search results.
Users normally use the search function to look for names of people they want to get in touch with―friends, high school classmates, former teachers, long-lost relatives. Once Facebook gets past this initial hurdle, search ads will prove to be a high revenue stream since people are already used to seeing search ads on Google.
What do search ads mean to users?
While search ads mean higher revenue for Facebook, they obviously mean more ads; something users can’t opt out of and barely tolerate.
Are you surprised? According to research by @salesforce, over half of ad spend is allocated to @facebook or search marketing Including @Google search. Link >> https://t.co/LdPzfsO4ft via @SmartInsights ht @antgrasso; #martech #seo #sem; cc @psb_dc @ahier @mclynd @akwyz @leimer pic.twitter.com/uzoua0D7Zp
— Wipro Digital (@WiproDigital) February 23, 2019
Facebook already knows so much about its users. It collects information about behavior, interests, preferences, and more. This data ise used to make ad targeting more accurate and more effective.
The relaunch of search ads will certainly push Facebook and other data brokers to gather more information about us. Even what we buy offline, what we’ll look like ten years from now, and practically who we are.
Search ads vs. News Feed ads
Also, search ads work differently from News Feed ads as the latter is more effective in creating demand. Normally, users browse the News Feed to discover content rather than search for something specific.
However, search ads are targeted to those people who already have the intention to buy but still haven’t decided where to buy. Search ads can help them decide, making it beneficial to both advertisers and consumers.