Facebook's David Marcus told us how Messenger will threaten advertising on the open web (FB)

david marcus

LONDON — Last night's Facebook earnings call focused so heavily on monetization inside Messenger that CEO Mark Zuckerberg had to remind analysts he thought video will be a much bigger driver of revenues in the near future than Messenger: "So many of the questions here today have been about Messenger, and I want to make sure on these calls that we do an accurate and a full job of conveying what we're actually thinking about," Zuckerberg said.

"[Video] is going to be a much bigger driver of the business over the next two to three years likely even than the trajectory of what we're doing on Messenger."

Perhaps one of the reasons analysts were so interested in Messenger is because David Marcus, Facebook's VP/head of Messenger, believes the app has the potential to move a lot of online ad dollars currently devoted to "retargeting" over to Messenger. Conversations between users and companies inside Messenger have a 30% better return on investment than retargeting ads on the web, he told Business Insider recently.

That poses a clear competitive threat to the open web, or the mobile web, which Marcus sees as a less than ideal medium for reaching consumers.

We spoke to Marcus a few weeks ago when he visited London to talk to clients. He told us that "most brands I've been talking to at least in the last two weeks in Europe are all actively building for the platform." Facebook has about 100,000 bots available for automated responses inside Messenger, and "out of the 70 million [Facebook] Pages-slash-businesses that are active on Facebook nearly 20 million of them are responding to messages actively on a monthly basis."

The next step is to monetize those conversations. Marcus frames the difference between web ads and Messenger like this:

"Let's say you're waiting at the dentist for an appointment and you see an ad for something you like, you click on that ad, you open a web page, a mobile web page, and then your name is called. You go in for your appointment, you come out, you forgot you did that, and you're already onto another mindset." 

Then you leave the dentist's office. "You open a browser and close the tab and then that brand needs to retarget you like 10 times [with ads elsewhere on the web] to get you to reconsider that thing you were interested in, in the first place," he says.

That takes a long time, and is obviously inefficient.

On Messenger, it will be different, he says. "If you open a thread when you use Messenger to communicate with your friends and family again, you'll see that thread you opened when you saw that ad in the first place, and you can complete that action and basically resume where you left off. So conversion rate is actually much higher."

A conversation with a branded bot or a company customer-service rep inside Messenger then becomes a permanent reminder inside the app to any user, each time they open it.


We put it to Marcus that this strategy sounds like it would take some activity on the open web by third-party adtech retargeters and move it inside Messenger?

"That's correct," he said.

Facebook has done this before.

Back in 2012, Facebook began overtly comparing itself to television to make advertisers compare the amount of money they spent on TV, and the ROI they got, with what they spent on Facebook, which has a far larger audience. Facebook doesn't have much of a choice about this: It is forced to go after ad budgets that are currently being spent on other media. Facebook notches $10 billion (£7.6 billion) per quarter in ad revenue. To get that to grow meaningfully, it needs to target existing sources of ad revenue that are already in the billions.

Advertising on the open web — including those "retargeting" ads that follow you from site to site once a company has figured out you were shopping for shoes online — is a business of that size.

We put this to Marcus, and he didn't exactly deny it:

"What we do is we're trying to help businesses get to their business objective, so if we have platforms that drive higher conversion rates then that's where they will go. That's why we believe that opening conversations, if you have the right experience, drive higher conversions."

He also overtly compared the ROI of being on Messenger to a typical mobile web ad campaign. Companies on Messenger have "been able to increase conversion rates be redirecting people to Messenger instead of redirecting them to a mobile web page by over 30%," he said.

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Contributer : Tech Insider http://ift.tt/2u1iPpF
Facebook's David Marcus told us how Messenger will threaten advertising on the open web (FB) Facebook's David Marcus told us how Messenger will threaten advertising on the open web (FB) Reviewed by mimisabreena on Thursday, July 27, 2017 Rating: 5

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