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Facebook’s messaging shift could have an ‘enormous’ impact on advertisers, and could trigger a shift towards bots and Stories

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Facebook’s messaging shift could have an ‘enormous’ impact on advertisers, and could trigger a shift towards bots and Stories

Mark Zuckerberg just announced in a blog post that Facebook would shift its focus from public posts to private, ephemeral communication on its messaging apps.

The 3,200-word post mainly talks about protecting people’s privacy when they use Facebook properties, after the company has come under fire for permitting the misuse of users’ data. But it also has potential big implications for its lifeblood, advertising, and the marketers that use the social network to reach its 2 billion users.

Read more: Instagram is already running out of room for ads, and that’s a threat to Facebook as it looks for new avenues to keep revenue growing

The move could have an “enormous” impact on Facebook’s advertising business, said Debra Aho Williamson, principal analyst at eMarketer.

“Facebook so far has not gained much traction with advertising in Messenger, and advertising in WhatsApp still hasn’t emerged,” she said. “That creates huge unknowns about how Facebook will generate significant ad revenue while users are engaged in private communications.”

Facebook’s evolving to keep up with how people are using its products

Given the criticism that’s rained down on Facebook, the initial response by some in the ad community was to welcome the idea that Facebook is trying to restore users’ confidence in a platform that’s become core to marketers’ ability to reach consumers.

“This move towards a privacy-focused platform should help regain consumer trust in the platform and ultimately encourage sustained usage of the platform,” said Grace Lin, head of client services at the agency We Are Social. “Advertising has and will always be critical to Facebook’s business, so we’re confident that once this trust is established, Facebook will be able to provide new formats of advertising or new business models that lean into consumers’ behaviors and preferences.”

Zuckerberg didn’t directly address advertising in his post, leaving people to read between the lines. As he said in part:

“We plan to build this the way we’ve developed WhatsApp: focus on the most fundamental and private use case — messaging — make it as secure as possible, and then build more ways for people to interact on top of that, including calls, video chats, groups, stories, businesses, payments, commerce, and ultimately a platform for many other kinds of private services.”

Facebook’s message shows that it’s evolving to keep up with how people are shifting from the public feed to one-to-one communications, and marketers should think about how they can tailor their communications strategies accordingly, said Nick Cicero, VP of strategy for Conviva, an online video analytics company.

“Right now, marketers can get up messenger bots, and what they should start doing today is think of the touchpoints of personalization that can occur after someone consumes some content on Instagram,” he said.

Cicero said that questions for marketers to ask are: “How can we interact with customers in a more one-to-one or small-group way? How can they make it inspire more conversation instead of just consumption? How do we create content that sparks a dialogue?”

Facebook watchers see opportunity in Stories ads and chat bots

Two ways marketers have dipped a toe into messaging apps are with utility-based messaging bots and Stories, Facebook’s two-year-old ad format that runs across its properties and which Facebook has been pushing hard as its news feed reaches its saturation point with ads.

“Stories ads have just started to blossom, and you’ll see more shift to that format. Strategies will have to evolve,” Cicero said.

Anita Walsh, VP, social strategy & marketplace buying at Horizon Media, said this is a good time for marketers to double down on Stories and messenger bots, which some brands have mastered for utility-based transactions like doing returns and making reservations.

“If people are moving to and get more used to using bots, it creates a way to move past utility and more into informational ones,” she said. “It’s not right for every brand; it costs to create and maintain a bot.”

Walsh also took Zuckerberg’s mention of making commerce and payments part of messenger apps as another positive for advertisers. It means that Facebook is trying to figure out how to make those apps stickier with, and trusted by, users, which in turn will make those apps good places for advertisers to reach potential customers.

The shift in focus could also create more data

As for whether advertisers should worry about the future of data targeting on Facebook, Facebook watchers weren’t concerned. The social network is still spending heavily on features like its Watch video section to keep people using its public social feed, and that usage throws off a lot of user consumption data that advertisers depend on, Walsh said.

“Facebook is investing heavily in content partnerships, so that level of consumption seems to be also on the roadmap, and that will help with any concerns about rich targeting,” she said.

In another possible plus for advertisers, Facebook’s move towards encryption could open up new data opportunities for marketers in SMS data, said Rosenblatt Securities analyst Mark Zgutowicz. In theory, Facebook wants its messenger apps to integrate with SMS data from phone messages.

“The benefit of connecting all these messaging devices is more data linkage across devices,” Zgutowicz said. “If you’re able to connect WhatsApp as well as Messenger communication with somebody who’s communicating with them on Instagram, you can potentially link what those two individuals have in common. As you connect more messaging together, you’re theoretically creating a bigger data graph with information that you can then sell to advertisers.”

To be sure, there are still plenty of unanswered questions raised by the post, which makes the advertising implications hard to evaluate.

Media Kitchen CEO Barry Lowenthal wondered if Facebook would still collect data on people while they’re using messaging apps and if that could be used for advertising purposes.

And as Facebook makes its messenger apps more utility-based, will it open up ways for it to make money from transactions, making advertising less important to its business?

In any case, it’s clear Facebook had to make big changes to its business.

“They realize Facebook can’t keep going down the same path with fake news and trust. Unless they’re willing to blow up the business model to solve for that, they’ll go away,” Lowenthal said.

Lauren Johnson contributed to this story.

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