This week, we're reviewing three upcoming social media advertising opportunities:
1) Facebook
As reported this week by MediaPost, Facebook has debuted a new ad format called Product Ads. These ads will allow business to showcase their products on the social network through single- or multi-product ad units, with a focus on direct response. Targeting can be done manually by product or automatically optimized, all while being customized for use through the purchase funnel from discovery to awareness to checkout.
Analysts on Tuesday said the new initiative makes good business sense. "Facebook has clearly learned from Google's product listing ads by including automatic product feeds so that retailers can keep ads aligned with real-time inventory," said Yory Wurmser, retail and ecommerce analyst at eMarketer. "With the wide-scale introduction of product ads, Facebook is creating a full menu of direct response advertising for retailers."
After beta testing with partners such as Target and Shutterfly, the product is now available in the API through Marketing Partners, and Facebook plans to roll it out in the Power Editor in the coming weeks. Target reported that the Product Ads resulted in a 20% increase in conversion for their products when compared to other Facebook ads. MediaPost notes that Facebook has steadily been making inroads into ecommerce, most recently introducing a "Buy" button on the platform, and the new offering could challenge Pinterest and traditional ecommerce leaders if successful.
2) Pinterest
Speaking of Pinterest and Buy buttons, re/code reports that the social scrapbooking service is laying the groundwork for their own ecommerce offering which could launch later this year. This feature would allow Pinners to order and pay for some of the products they find on Pinterest without leaving the company's website or app.
The company has focused its near-term strategy on advertising, introducing Promoted Pins in May with a handful of big brands, and also recently introduced an “Install” button that lets users download iPhone and iPad apps from within Pinterest. But a big part of what has excited some marketers about Pinterest is its potential to become a spectacular e-commerce platform. For example, it’s logical to assume people are signaling some interest — if not clear purchase intent — in a product when they Pin an image. By adding a Buy button, Pinterest is aiming to shrink the time between wanting something and buying it.
Pinterest may be teaming up with Stripe, a young payments company which is already connected to Facebook and Twitter, to handle their payment processing. Will Pinterest offer a unique advertising format to promote products which include the buy button? That is unclear, but not out of the realm of possibility, especially with other social networks taking a closer look at direct response and ecommerce. While Pinterest would have competition in this area, re/code notes that they have an advantage over other social networks because their users are already coming to their website to find new products.
3) Twitter
Stepping away from ecommerce, Twitter announced an ad syndication initiative last week which aims to make money from people who aren't using the social service but rather come across tweets from other websites. Their plan is to sell their Promoted Tweet ad unit on websites that aggregate tweets. The early response, reported by the WSJ, is underwhelming.
While there is a large market with 185 billion tweet impressions outside of Twitter in Q3 2014, Twitter has only announced two partners for this initiative: Flipboard and Yahoo Japan. These are not the type of heavyweight publishers one might expect to top this announcement.
Twitter executives mentioned ESPN as a hypothetical partner when they pitched the concept at the Consumer Electronic Show last month. So far ESPN has decided not to participate, in part because the company believes its robust ad sales team can monetize the inventory in question, according to a person familiar with the matter. Twitter and ESPN are still discussing a range of potential partnerships, the person said. Many big-name publishers who would seem prime candidates for this type of deal, such as NBCUniversal, say they haven’t been contacted yet by Twitter.
In addition to selling ads on websites which host tweets, the Wall Street Journal reports that Twitter is separately building up businesses as a middleman for publishers who want to sell mobile app inventory - regardless of whether it has anything to do with Twitter. While Twitter's revenue is growing from the social network directly as well as their mobile ad exchange, their user growth is slowing. This means that generating revenue from sources outside of Twitter could become more important as time passes.