Facebook fuels advertising ambitions as it buys Atlas ad platform
The acquisition shows that Facebook sees its focus on competing with Google and growing its advertising business, and the ability to gain far greater measurement data will help it do that.
Facebook will be able to start tracking the ads that people see and how they then link to purchases. Its main challenge will be how quickly it can integrate the technology.
Atlas was part of Microsoft’s $6.3bn acquisition of digital ad agency aQuantive in 2007, which has largely proved a failure, leading to a $6.2bn write off last year.
Facebook hopes that the deal will help it answer some of the questions that advertisers have about using its platform for advertising. General Motors famously ceased advertising on Facebook around the time of the social network’s IPO and others have their doubts.
Sir Martin Sorrell said at Cannes last year that he was unconvinced that Facebook was a good advertising medium for clients. He reiterated this comment in an interview this week.
Brian Boland, Facebook’s product marketing director, said that advertisers had been asking for better measurement and that the acquisition of Atlas took it further down the road towards that.
He said that the complex nature of the marketing environment meant that if marketers and agencies could “get a holistic view of campaign performance”, they would be able to do a much better job of making sure the right messages got in front of the right people at the right time.
He ruled out the development of any wider ad network beyond Facebook itself. However, this is the direction that analysts believe it is heading if it wants to significantly increase revenues.
“We plan to improve Atlas’ capabilities by investing in scaling its back-end measurement systems and enhancing its current suite of advertiser tools on desktop and mobile. We will also work to improve the user interface and functionality with the goal of making Atlas the most effective, intuitive, and powerful ad serving, management and measurement platform in the industry. Ultimately, Atlas’s powerful platform, combined with Nielsen and Datalogix, will help advertisers close the loop and compare their Facebook campaigns to the rest of their ad spend across the web on desktop and mobile,” Boland said.
Nate Elliott, an analyst with Forrester, said: “The question now is how quickly and successfully Facebook can integrate its data with Atlas’s tools, and whether they can avoid a privacy backlash as they do so. History suggests they’ll struggle on both counts.”
Facebook currently trails far behind Google atop the US display advertising market, although both companies are seeing their share of revenues grow.
Google earned more US revenues than any other company last year, topping the overall $14.9bn US display ad market with a 15.4% share, according to eMarketer.
Facebook took home a slightly lower share in 2012, with 14.4% – despite seeing its share grow from 14.1% in 2011.
This year, eMarketer estimates, that Facebook’s share of display revenues in the US is expected to grow to 15.2%, while Google’s share will increase to 18%.