Facebook is expected to outline how its ever-increasing portfolio of advertising and marketing tools go together at its F8 powwow this week in San Francisco. The company could also roll out plans for a mobile exchange and demand side platform.
F8, Facebook's developer conference, will feature the usual complement of standalone product updates for Instagram and Whatsapp, Oculus demonstrations and talks about building apps, social graphs and data tools. But the developer tools and software that directly help the bottom line are Facebook's ad tools.
The social networking giant has been ramping video and now has more than 2 million advertisers, up from 1.5 million last July. The catch is that Facebook will need more mature tools as its advertising base scales. If large advertisers are going to hop from Google to Facebook, the social network will need better campaign management tools.
JMP Securities analyst Ronald Josey said in a research report Monday that Facebook is taking more marketing wallet share and part of the reason is its ad management offerings.
We believe a key driver of advertiser growth is that Facebook has made its ad products easier to use, and we expect to hear more about the ease of use at F8. In 2Q13, Facebook streamlined its ad offerings from 30+ ad products to six, and while we acknowledge that there are more tools today, we believe Facebook has intentionally minimized the complexity of its self-service products within its six core ad products.
Indeed, Facebook has been improving its ad tools, but there's more work to be done. Facebook's Power Editor, a tool designed to manage large campaigns, continues to suffer from performance issues. At F8, Facebook is likely to outline further improvements.
Josey rounded up the key marketing launches from Facebook in the first quarter.
Specifically, Josey sees Facebook developing its own ad technology stack that is likely to include platforms to manage both the demand and supply side of the ad market as well as address mobile via an exchange. The Information and Ad Age have reported that Facebook is developing a demand side platform and mobile exchange, respectively.
"Combined with Facebook's people-based targeting with Atlas, its first-party data, and 2+ million advertiser relationships, we believe Facebook's ad tech stack could ramp relatively quickly," said Josey.