Facebook is among the largest social media platforms today, so it’s no surprise that it brings in a massive amount of revenue from ads. While Google is currently the largest digital ad platform in the USA, Facebook is a close second in terms of the advertisers and revenue it attracts.
There are, however, changes in Apple’s privacy policies that could affect Facebook advertising in the future. Advertisers seem to be catching on though, which is good news for Facebook as well.
Let’s talk about Facebook’s advertising statistics and trends in more detail below!
Marketing Trends for Facebook in 2022
Things don’t seem to be going great for Facebook this year considering the fact that advertisers are looking to diversify their ad mediums. After all, they know they can reach only a limited audience on Facebook as compared to Google. Likewise, it doesn’t help that Instagram is eating into a significant portion of Facebook’s user base.
Advertisers are citing insufficient ad reach as a major reason to look for alternatives to Facebook. However, there’s no saying whether they’ll find viable replacements because even if its reach is shrinking, Facebook still has nearly 3 billion active users. This is thrice the amount of Instagram’s active users, which is one of Facebook’s closest social media competitors.
Aside from that, Facebook caters to a different demographic than that of other social media platforms like Instagram. The majority of Facebook users are 25 and above. Instagram, on the other hand, has a younger audience mostly aged 34 and below.
So, for advertisers catering to an audience above 25, they may find it beneficial to use Facebook over other social media platforms. This is especially true if their products and services are aimed toward a more mature audience.
In this case, it’s easy to see why every marketer’s wish to diversify their reach shouldn’t affect Facebook in the near future. Besides, the general decline in ad performance over the past 2 years may not be due to Facebook’s shrinking influence.
After all, supply chain disruptions and several other unforeseen factors affected retailers during the pandemic. If not for these disruptions, it’s likely that Facebook could have achieved better results for its advertisers.
Also, with the introduction of Facebook stories, advertisers can enlist the help of content creators to boost their CTR (click-through rate). The stories are on-trend and appeal to audiences of all ages. So, it’s possible that the introduction of new features like stories will rope in larger Facebook audiences than advertisers had anticipated.
The Impact of Apple’s New Privacy Policies
Apple’s iOS 14.5 update changed the game for advertisers all over the world. It effectively squashed one of advertisers’ most cherished tools to win audiences: personalization. The new policy limits an advertiser’s ability to keep tabs on user activity across the web.
In the past, advertisers could access this information without restraint. It allowed them to target users based on their web activity and app usage. Unsurprisingly, this helped them hone their targeting strategies and boost conversion rates in no time.
However, this is not possible anymore. Advertisers now require explicit permission from users before they track their information. As regard, it’s easy to imagine that not every user would be willing to share such private information with advertisers.
Apple device users would need to agree to IDFA (Identifier for Advertisers) if they wish to allow advertisers to view their online activities. So, in effect, Facebook can no longer receive this information unless a user consents to it.
As a result, it lost one of the main features that attracted advertisers to use its platform in the first place.
Since the update was introduced only a few months ago, it’s difficult to determine the extent of the damage it caused to Facebook’s ad revenue this year. However, it seems pretty clear that with limited access to user data, Facebook’s ad targeting won’t be nearly as good as it was before.
The Future of Facebook Advertising
There’s good reason to believe that advertisers will continue to rely on Facebook’s reach to win audiences over. Even if it’s only for the sake of channel diversification, advertisers are unlikely to abandon Facebook anytime soon.
Here are two short-term strategies advertisers are considering:
- Using their own data to improve ad targeting via Facebook
- Using data collected by Facebook with user consent
After all, Facebook has a treasure trove of data on user engagement that can be put to good use.
Advertisers are also considering using content creation to appeal to certain sections of their audiences. They believe that targeting groups of audiences instead of individuals will prove to be effective in the long run.
However, these are long-term strategies. In the short run, it seems as though Facebook will be facing a significant decline in ad growth over the next year. There is likely to be a 15% increase in Facebook ad spend this year compared to 2021.
While things may not look great for Facebook next year, there are signs that it’ll bounce back in due time. The social media platform has too many active users for advertisers to ignore altogether.
It’s also making efforts to stay on trend by introducing new features every now and again. If advertisers learn to capitalize on first-hand user data they collect themselves, it’s more than likely that they’ll continue to favor Facebook.