10 Ways Facebook Is Telling Businesses To Confront Changing Ad Market

By Paresh Dave
Los Angeles Times.

The soaring usage of Facebook on mobile devices has generated an expensive problem for the companies that advertise on the 1.3-billion-user social network.

Facebook shows fewer ads on its mobile properties than on its traditional website, meaning companies are finding themselves placing higher bids to win those few coveted placements.

About 30% of Facebook’s regular users solely visit from smartphones and tablets, up from 19% a year ago. And the gap between heavy users of Facebook in general and heavy users of Facebook mobile has narrowed since last year to 21%, from 33%.

In its earning call last month, Facebook laid out how that’s changed advertising in the past year: 25% fewer ads displayed and a 123% increase in the effective price per ad.

The shift is adding to the frustration for companies that have already had to confront the fact that as Facebook adds users, posts that the companies don’t pay to promote are being seen by fewer of their fans.

Facebook officials are touring the country this summer, including Los Angeles on Thursday, to address concerns. They’re targeting small businesses because only about 1.5 million of the 30 million of those that have Facebook pages purchase ads.

“What we’re trying to do is give them a way when they’re spending their marketing dollar to be able to reach their exact, targeted audience so they’re spending most effectively,” Facebook’s Bess Yount said in an interview. “Once people get that concept, normally we see their success skyrocket.”

Facebook touts its importance by saying that 38% of respondents in a Vision Critical survey said they made a purchase after engaging with it on Facebook, compared to 29% on Pinterest and 22% on Twitter.

There’s also a validation factor, according to entrepreneurs. Businesses that have a large amount of followers on social media are taken more seriously.

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