For real estate brokers and agents who are charged with promoting multi-million dollar properties and developments, I’ve been promoting Facebook’s targeted advertising.
Where else can you put a beautiful picture or video of your finest listings right in the lap of people with more than $3M in liquid assets, annual incomes more than $500,000, in specific zip codes who are likely to move?
But, in the recent Facebook Q3 earnings call, “max ad load” was brought up several times by investors, just as it was in the Q2 call. It seems to be a big topic lately and for good reason.
First, in laymen’s terms, what is it?
Facebook’s maximum ad load is basically the point at which they can’t put any more ads in the newsfeed before it becomes uber-annoying and they start losing millions of users.
The big concern is that they’re nearing that tipping point where they can’t increase daily ad volume any more, or else your newsfeed will show an ad every other post and you’ll feel like you’re watching a cable show with 20 minutes of commercials and 10 minutes of real housewives screaming at each other. There are only so many businesses that can fight for advertising space with Facebook’s 1.79 billion monthly users so that point is definitely coming.
So if you’re reading articles, including ours, about how powerful ultra-targeted Facebook advertising is and you’re planning an exciting 2017 full of growth from your Facebook advertising campaigns then this might be a little alarming.
Why? Because we all know that Facebook needs to continue to make wall street happy and that means if they can’t sell more ads, they’ll have to increase the price per ad. So that $10 / day will start climbing to $20, $30 or $50 per day to get the same results.
Facebook CFO David Wehner said on last month’s call “we expect to see ad revenue growth rates come down meaningfully.”
And guess what… after the call, Facebook’s share price dropped by 7.6% in after-hours trading.
So the first thing I’d like you to take away from this article…
Do your ad testing now and really find out which demographics, interests and geographic areas work best so when the inevitable price increase happens, you’re not spending huge amounts of cash testing multiple ad campaigns.
Understand that testing is never really over, but because you are speaking to the same crowd, you can do the bulk of it now and save money down the road.
All that said, I’m not sold that it’s panic time either, for two reasons.
The higher the price goes, the less we’ll compete against spammers and dreamers for ad space. Your advertising will be more impactful simply because the quality of the advertising will improve.
Your message will no longer be just down the page from some super growth hacker promising six figure incomes in six months. Trust me, those guys will have moved on to the next super cheap or free advertising hack.
After listening to the earnings call myself, there were several mentions of “adding new ad units” and “improving current ad units”, read: new and improved ways to advertise on Facebook and Instagram.
Some industry experts believe that there will be expansion on Facebook’s platform with ad products similar to Google’s Display Network. So in other words, bailing on Facebook advertising would still be a ridiculous knee-jerk reaction. If any company has proven that they are built to withstand market pressures and continue to find ways to make their investors happy with new found revenue streams… it’s Facebook.
At some point promoting luxury real estate on Facebook will change. But I’m not sold that it’s going to get worse.
Clearview Elite creates custom, Multi-Brand Websites for real estate agents, brokers and developments. Multi-brand websites can be branded to any referral partner with a simple click. Referral partners can promote property websites as their own and listing agents can reach private high-net-worth databases as a result.
About Eric: Real Estate Sales & Marketing veteran and Founder of Clearview Elite. Driven to make life easier for real estate salespeople. A very lucky husband and Dad, slightly above average golfer, and food and wine fan. Lives in Boise, Idaho with wife Julie and kids Nicholas and Grace.
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