28 October 2016
Facebook advertising is more expensive now compared to earlier, but the platform is more mature. Photo: Bloomberg
Facebook advertising is more expensive now compared to earlier, but the platform is more mature. Photo: Bloomberg

Four trends to watch out for in Facebook ads

Facebook is dominating the social networking market as it has built up a large Internet ecosystem, steering traffic from numerous external apps and websites, including news and information portals.

As we head into 2016, there are four trends emerging in relation to Facebook.

1. Facebook ad platform becomes more mature

Facebook will not offer free lunch for companies and brands forever. The natural landing rate of commercial-purpose posts has already been declining. Brands and companies will need to pay for the ads and posts.

Meanwhile, efforts have to be put in to create original content, rather than copy-pasting stuff from elsewhere.

Yes, the Facebook ads are more expensive now. But the product is also more mature and more efficient.

I think Facebook is likely to add “sentiment index” analysis into its advertising system to help advertisers track users’ sentiment and enable the firms to distribute ads more effectively.

2. Launch ad products on Instagram

It was a good move not to put ads on Instagram too soon.

Many small-business owners have now established a presence on Instagram. The ad platform on the media, meanwhile, is in the pilot stage. The model is similar to that of Facebook. But image is more important on Instagram, so the requirement for content (image) quality is also higher. In the long term, advertisers should set a process to produce suitable content.

As of now, I haven’t seen any outstanding Instagram ads in Hong Kong. What works for Facebook may not be favored on Instagram.

3. Native advertising

Local weekly 100 Most has made itself an icon among the youth and on Facebook. It indirectly established another advertising model. The company launched native advertising on its platform and achieved huge success. Many others tried to copy such model but failed.

The weekly released a short film website TVmost this year. It is noteworthy that almost all popular content on TVmost benefits from Facebook traffic. But advertisers and brands will likely have supporting roles in the native advertisements. It may not be a good thing for both sides.

As a publication, editors should focus on the content to attract more readers. It may not be a good long-term move to rely on income from native advertisements.

4. Next step for Facebook video

Popular webcast apps like Periscope and Meerkat have not yet landed in Hong Kong. But the new feature Facebook Mentions may be a leader in this field soon.

Before putting money on the webcast platforms, advertisers should give a thought as to whether people in a fast-paced city such as Hong Kong will have time to follow live TV, not to mention linear webcasts. 

Beside webcasts, Facebook is also exploring new video ad models, including vertical videos and 360 degrees virtual reality videos.

Although the new models may not become mainstream, video advertising wil continue to be a key for Facebook advertisers. Budgets will increasingly shift to online videos from the traditional TV commercials.

The video content will also be in forms that will be more acceptable to the audience, compared to what we have seen earlier.

This article appeared in the Hong Kong Economic Journal on Dec. 29.

Translation by Myssie You

[Chinese version中文版]

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member of the Alumni Association of HKUST's School of Business and Management.

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