Sheryl Sandberg’s top concern as she prepares for New York’s largest annual gathering of advertising and media executives this week has nothing to do with ad-blocking software or click fraud. Sandberg, Facebook’s chief operating officer, can brag to Advertising Week attendees about how the world’s largest social network is largely immune to forces that have sent Internet and publishing companies into a panic. But Sandberg is losing her voice, so her pitch will need to be succinct.
Between sips of strawberry water at the company’s Menlo Park, Calif., headquarters, Sandberg explains how Facebook has avoided controversies around online advertising with its emphasis on a single account tied to a user’s real-world identity and subtle ads that can be easily scrolled past if the user isn’t interested. What advertisers want, according to a raspy-voiced Sandberg, is “to reach people in a way that feels good, that’s not intrusive.” The argument ignores that Facebook trackers are just about everywhere on the Internet. But because most of Facebook’s 1.49 billion users routinely access the service through an app, the ads cannot be hidden using one of the many blocker tools now topping the download charts on Apple’s App Store.
Madison Avenue has a lot to worry about these days, but those longing for simpler times will soon get some relief. Advertisers accustomed to television will feel more at home on Facebook, thanks to a new feature for purchasing online video ads similar to the way they buy commercials on TV. Facebook is also experimenting with letting brands poll smartphone users for feedback. These may sound like steps into the past, but Sandberg says it’s necessary in order to help agencies adapt.
Facebook has become a friendly face in the ad industry. Part of what’s shielded the company from the problems plaguing other online ad giants, such as Google and Yahoo!, is quality control from users, says Brian Blau, an analyst at research firm Gartner. But maintaining a high bar will be difficult as Facebook takes steps to expand its empire to other apps and websites, which could open it up to more of the kind of fake traffic that will cost advertisers $6.3 billion this year. “They’re definitely going to be more susceptible to general abuse and click fraudsters,” Blau says. “The bigger they get, the harder it gets to rely on users to tell them something is bad.”
Around this time last year, Facebook made an important change to how it tracks user behavior across devices, a move designed to improve ad targeting. Now the company is developing more sophisticated tools to measure the effectiveness of ads. Facebook will take into account how long users linger on a particular post instead of relying on users to tap “like” or “hide.” That may sound kind of creepy, but it’s for the greater good, says Sandberg. “The biggest question we get—literally, by far—is, ‘Why aren’t ads more relevant?’”
Eventually, Facebook aims to make ads appearing on every phone running its app more personalized, says Carolyn Everson, Facebook’s head of revenue. It’s starting with Instagram. Companies that advertise on the photo-sharing app will be able to target users based on Facebook demographic data. LiveRail, the Facebook-owned video ad network used by more than 200 companies including Major League Baseball and CBS, is now using age and gender data from the social network.
Personalization is at the center of Everson’s pitch to Facebook advertisers, now totaling about 2.5 million. In some meetings, she asks attendees whether anyone has bought a car recently. That person, she says, should no longer be getting car ads. Instead, they should start seeing suggestions from the automaker about how to use the features in their new car. “Otherwise it’s just a waste,” she says. One topic Everson won’t dwell on during the meetings this week is what’s happening elsewhere in the mobile ad market: “I never focus on any other companies.”