Will Facebook replace Adelaide Television Advertising?

Will Facebook replace Adelaide Television Advertising?

Adelaide Television Advertising vs Facebook

Our Adelaide advertising agency is asked this question many times and we don’t think it will. Will Facebook still be in it’s current form 10 years from now?  We do know that television keeps reinventing itself to be relevant to Adelaide Advertising Agencies and it’s audiences.

Facebook released it’s third-quarter results showing spectacular year-on-year revenue growth of 56%, arriving at $7 billion. Facebook’s third-quarter profits, meanwhile, grew almost 300% to hit $2.3 billion.

In 2016, 57% of Facebook’s revenue growth came from new users or from established users spending more time on the platform — more eyeballs looking at ads for longer. Another 32 % of that growth came from Facebook showing each of its users more ads.

Meanwhile, growth in the price Adelaide advertising agencies have to pay Facebook to feature each ad accounted for a measly 11% of the increase in revenue this year. In other words, 2016’s gangbusters revenue increase has largely been about jacking up the volume of ads, not the price advertisers are willing to pay for them.

There’s an obvious natural limit to this dynamic. Facebook can only cram so much Adelaide advertising into your Newsfeed before you get mad.

Facebook needs to transition its strategy from volume to price. The social network must start making more money by charging advertisers more to feature ads on the platform. By 2018, growth in the price Facebook charges per ad is projected to account for 40 % of revenue growth, while growth in ads per user will fall to just 8%

Going forward, instead of worrying about scaring off users with too much advertising, Facebook has to worry about scaring off Adelaide advertisers by charging too much. But the company has a plan: video!

Adelaide TV stations have traditionally been able to charge a premium for advertisements because of the value brands place on getting themselves in front of TV viewers across Adelaide. Particularly for appointment viewing that people must watch live (AFL Football) Adelaide advertising agencies are downright eager to for the chance to get a vanishingly rare shot at viewers’ undivided attention.

Reaching 1,000 people with prime time Adelaide television advertising cost advertisers approx.. $50 in 2015, while accomplishing the same thing on Facebook cost just approx. $5.

Now, the social network wants to make video on Facebook the new television. “We see a world that is video first, with video at the heart of all of our apps and services,” says Facebook CEO Mark Zuckerberg

The company has deployed Facebook Live, which allows users to shoot video on their mobile devices and stream it live on the social media platform. And Facebook is already dropping $50 million to encourage major media companies and public personalities to make use of the feature. They’re also building video capabilities into Facebook Messenger and WhatsApp.

The explosion of high-quality mobile devices with good video capability has made this possible, opening up video content to be both watched and created by anyone, pretty much anywhere, pretty much anytime. Adelaide advertising agencies specifically already make up 84% of Facebook’s overall revenue stream in South Australia. 93% Adelaide Facebook users sign on with mobile devices.

Of course, replicating your Adelaide television advertising on smartphones will be far easier said than done.

Facebook’s users are so fractured among so many niche subcultures it’s hard to see how the platform could deliver the same audiences at scale that brands can get from sporting events like the AFL, Cricket, Tennis & Soccer or the most popular Adelaide TV shows.

But Facebook clearly intends to try. The holy grail would be to combine the prestige of Adelaide television advertising with the kind of targeted data-heavy advertising Facebook and Google are perfecting, all offered up primarily through everyone’s smartphones; Facebook as a TV channel, not just for celebrities, major content producers, or big events, but for everyone.

And yet… advertising on mobile video specifically is still a small slice of the Adelaide advertising market. By 2018, they’re expected to hit roughly 10% of the mobile advertising market. And all by themselves, Facebook and Google account for 68% of all spending on Adelaide online advertisements. So Facebook along with Google — will largely be making up the world of Adelaide mobile video advertising as it goes along.

If you need a hand in developing your marketing plan or your editorial calendar then contact Philip at fabADS  philip@fabads.tv