Facebook Marketing Trends 2016

Kalle Tiihonen Feb 18 2016 8 AM | 5 min read

 Advertisers are spending more money than ever before on Facebook. Facebook will be the best option for brand and direct response advertisers in 2016 if you understand it deeply enough, spend time on optimization and stay updated on the latest features. New and continuously evolving ad formats and targeting options give you more options but at the same time make it more challenging to find the best performing combinations. Instagram video ads, Lead ads, dynamic cross-sell and upsell, video ads and canvas ads require continuous A/B testing since Facebook is developing new features forward on an almost daily basis.

Competition Is Heating Up

There are now 1.59 billion users and advertisers spent $17.08 billion on Facebook in 2015. The competition and bid prices on the ad auction are rising as the number of advertisers keeps growing - especially on mobile. Google is still the biggest online advertising platform by revenue but Facebook’s ad revenue grew faster (+48.6 %) than Google’s (+13.0 %) in 2015. In other words, advertising budgets moved towards Facebook and it seems to be a winner in online advertising world with measurable results. I am pretty confident that this trend will continue since $17.08 billion is only 3 % of total global ad spend ($569.65 billion in 2015), and Facebook is able to challenge both brand and direct response advertising. Huge TV advertising budgets continue to move towards Facebook and Instagram due to reach and frequency buying, Target Rating Point buying, new video and brand awareness ad options.

Mobile Will Be the King

The number of mobile-only Facebook users is growing and Google has started to penalizenon-mobile friendly websites. Did you know that all of Facebook’s new ad formats are primarily optimized for mobile? For example, Instagram Ads work only on mobile and Lead ads were first released only for mobile users. If your website looks or works badly on mobile after a user clicks your ad on Instagram, the conversion rates will drop dramatically. According to eMarketer, mobile ad spend worldwide will be bigger than desktop for the first time in 2016.

How to Stand out From the Crowd in 2016

Facebook is releasing new features for advertisers on an almost daily basis and to gain a competitive advantage, you must be among the first to use the new ad formats such as Instagram video ads, Lead ads, DPA carousel ads, local awareness ads, Audience Network for mobile web, Canvas ads and placement optimization.

Using the latest targeting options -- such as dynamic retargeting with cross-sell and upsell -- before your competitors do will help you achieve great results with more relevant advertising. In addition, an ad tool with automatic A/B testing and optimization features can help you to find the best performing variations quickly.

Facebook’s updated tracking pixel with customized events enables more flexible conversion and user tracking that’s also easier to set up, and many other new targeting options. We recommend implementing it to your website as soon as possible, even if you don’t advertise on Facebook, yet.

Cross-Selling and Upselling for E-Commerce and Travel

Cross-selling is an especially useful way to increase the lifetime value of a customer. When someone purchases an item from a specific product set you can automatically cross-sell related items from another product set. They may be out of the handbag market immediately after making a purchase, but could still be interested in shoes from the same or related business. For example, you can choose to suggest Michael Kors bags to people who have recently purchased Tory Burch shoes.

Advertisers can upsell a product within the same category as the one a person viewed to increase profitability. For example, if a customer viewed a two star hotel room, an advertiser could instead show three star hotels from the same city that have higher profit margins. Upselling is used to encourage a customer to move from considering one item within a product category to another that would have higher profitability (eg. higher margin, higher price point or higher conversion rate).

When you cross-sell or upsell with Dynamic Product Ads, Facebook will intelligently and automatically select relevant items from the product set you choose to show in ads. Facebook decides which product to show using a variety of techniques such as co-purchasing and co-browsing behavior. For example, if people on your website or mobile app frequently purchase baseball bats and baseball gloves together, Facebook will learn to cross-sell gloves whenever a bat is sold.

Automation and Deep Understanding

Automatic optimization is a big trend in both financial services and advertising. Early adopters are already using robo-advisors to automate personal finance management. The auction logic on Facebook and in the investing world is very similar. However, automation in the online advertising world is already mainstream.

One way to minimize manual optimization work is to use a Facebook Marketing Partner. Each partner has their own proprietary automation algorithms built on top of Facebook. An optimal partner supports your advertising team, offers a stable tool with optimization features and has the access to the latest features provided by Facebook’s Marketing API. Test different partners regularly to find the best option for you.

Another option is to use Facebook’s own tools: Ads Manager is aimed for beginners andPower Editor for more advanced advertisers. Some of the best sources for learning Facebook’s own tools are Jon Loomer’s blog, our blog and Facebook Blueprint. Outsourcing advertising to an advanced digital marketing agency is also a great option if you don’t have resources to educate your own team.

What’s your strategy to stand out from the crowd in 2016?

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Kalle Tiihonen

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