Facebook Recognizes Threat to Ad Revenue from User Tracking Restrictions – What Does This Mean for Digital Marketing & Sales?
Today Facebook CFO David Wehner commented in Facebook’s earnings release that they expect year-over-year revenue growth to slow significantly through the end of the year. Facebook is attributing this to post-COVID normalization of digital ad spending, but also to changes that Apple implemented on user tracking in iOS apps.
“In the conference call Wehner said that even though Facebook has benefited from a strong digital ad market, advertisers have had difficulty adapting to the changes. Facebook is introducing new tools to help them do so, he said.”
So, what is the threat? For Facebook, it means they are likely able to collect less data from iPhone users, and so be less accurate in ad placements and targeting, which will likely increase Cost-Per-Click or Impression, and make Facebook and Instagram vulnerable to competitors for marketers’ digital ad spend. Facebook will need to get creative to keep this their digital advertising gravy train running.
But that’s Facebook’s problem.
We’re concerned about what this means for the ad buyers, the enterprises, small-to-medium businesses, the mom-and-pop shops, and the SaaS companies who rely on reasonable Cost-per-clicks and good lead generation from Facebook’s tools to complete sales. Is the party over for them?
“Clothing designer Alex Crane used to rely on precisely targeted online ads to get the word out to potential customers, but a giant snag emerged this year. Apple rolled out changes to its tracking technology, saying that would enhance users’ privacy.
Now, Crane says, it has become almost impossible to track the return on each dollar he spends on Facebook and Instagram–the two largest drivers of traffic to his site.”
We believe it’s not. And we believe we are entering the 2nd wave of digital marketing, and additional disruption on the behemoths of advertising.
Fundamentally what has changed is the way that data is collected, and how it is used. As micro-targeting of display ads becomes less accurate and so less valuable, we think we will see 1) a (continued) increase in the value of opt-in and voluntary communities and influencer marketing, and 2) the emergence of a new marketplace that connects suppliers and consumers based on aggregate behaviors in a cookie-less world.
I don’t know much about (1) influencer marketing. So let’s talk about (2) for a moment. Here’s what this could look like: a company that has the ability to identify online behaviors and leverage that not to serve up an ad, but to make a direct connection between the consumer and the supplier’s sales process with an omnichannel contact strategy. We’re talking human interaction here.
This would be valuable for enterprises or other companies whose products and services require more than a simple transaction. Think of your enterprise or business SaaS products, your complex cable & telecom, your business insurance.
These are all multi-touch sales with a high lifetime value. Here, influencer marketing is less effective, since the solution is about fit. Here, a lead (or a sale!) is worth a lot, and the potential drying up of digital targeting is a big risk.
In these industries – FinTech, Cable & Telecom, SaaS and Business Services – marketing teams spend big money on identifying and qualifying prospects, selling, and finally closing and onboarding prospects. They often engage sales partners to help at various stages.
But a company like we describe in (2) has a unique ability to deliver closed deals to suppliers, because they own relationships with prospects, and have the skill and relationships to match the prospect and supplier with very little effort from the supplier.
Enter Revenue-as-a-Service. Enter RaaSIQTM by S&P Data Digital.
RaaSIQTM is your way to grow your revenue in a post-tracking world while investing only in deals that close.
RaaSIQTM scales to your needs, and delivers revenue at a cost that aligns with your unique customer Lifetime Value.
We may not know what the ultimate impact of tracking opt-outs will be. But we can help you navigate the post-tracking digital sales landscape, while adding a completely additive sales channel.
Learn more about RaaSIQTM here