Report: Marketplace Ads, Facebook Exchange Will Lead Rebound In Facebook Advertising

By David Cohen 

Add eMarketer to the growing list of companies that don’t believe Facebook advertising was doomed when General Motors pulled its $10 million account off the social network, as the researcher released a report Tuesday touting the benefits of Marketplace ads.

eMarketer pointed to Facebook’s announcement in May that advertisers will be able to purchase premium ad inventory via its power editor or ads application-programming interface, as well as to the social network’s upcoming launch of Facebook Exchange, as moves that will entice deeper-pocketed advertisers to use its automated features.

The researcher combed through data from more than one-dozen third-party research studies and spoke with industry executives, finding that 2012 started off slow in terms of ad buying on Facebook due to uncertainty about premium ads and advertisers choosing to buy as the year went along, rather than committing early.

eMarketer estimated that marketplace accounts for 60 percent of total ad revenue for the social network, meaning $1.89 billion in revenue in 2011 from marketplace, and $1.26 billion from premium ads.

The company’s advice to advertisers was:

  • Let the technology do the heavy lifting.
  • Test, learn, and change.
  • Place a high value on speed.
  • Combine premium and marketplace ads for the biggest impact.
  • Use the data gained from a campaign to improve the next one.
  • Use targeting technology to gain the right fans.
  • Look beyond click-through rate.

The researcher also offered three keys to success for Facebook itself:

  • Break down more walls between the two sides of its ad business.
  • Prove that adding social features to ads works.
  • Deliver a consistent message to advertisers.

Readers: Do you think Facebook can turn its ad business around?