eMarketer_Search_and_Social_Platforms-How_Facebook_and_Others_Can_Steal_Dollars_from_Search1. SEARCH
AND SOCIAL
PLATFORMSHow Facebook and Others Can
Steal Dollars from Search
SEPTEMBER 2016
Debra Aho Williamson
Contributors: Lauren Fisher, Corey McNair, Maria Minsker,Yory Wurmser
Read this on
eMarketer for iPad
2. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 2
SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN
STEAL DOLLARS FROM SEARCH
Everyone’s heard the one about social going afterTV ad dollars. But the social platforms—led by Facebook—are
aiming for paid search dollars as well. Can social can be as good as search for some ad objectives? And can it gain a
share of search budgets?
■■ Smart advertisers already use search and social
together, but new social ad products and changing
usage trends are creating fresh opportunities.
■■ Facebook isn’t just for branding; it offers ad products
for all stages of the purchase funnel and is publicly
comparing the return on investment (ROI) of some of
those products, such as Dynamic Ads, to that of search.
■■ Paid search has always been considered highly
effective, but in some surveys, marketers rate social
advertising even higher.
■■ Attribution in social is improving, helping marketers
know whether an ad placed on Facebook resulted in an
action or a purchase.The better this gets, the less likely
marketers will be to give sole credit to the last click
(which often takes place on a search engine).
■■ Budgets aren’t yet shifting from search to social, but
emerging trends in search-heavy industries such
as retail, travel and automotive are worth paying
attention to.
■■ Facebook will eventually start selling search advertising,
and clues about what that might look like are starting
to appear.
WHAT’S IN THIS REPORT? Facebook’s new ad products are
aimed squarely at search marketers.This report assesses
the growing competition between social media and paid
search and discusses what might make ad budgets shift.
% of respondents
Search Channels Used by US Digital Shoppers During
the Purchase Process, by Stage, April 2016
Discovery
71%
64%
20%
Consideration/purchase
74%
65%
14%
Post-purchase engagement
51%
45%
13%
Search engines
Search on
retailer sites
Social search
Note: n=999 ages 18+
Source: Catalyst, "Why Search + Social = Success For Brands" conducted
by Forrester Consulting, May 3, 2016
211116 www.eMarketer.com
KEY STAT: Search engines and search on retailer websites
are by far the most common channels used by US digital
shoppers. But social search is also being employed, at
every stage of the purchase process.
CONTENTS
2 Search and Social Platforms: How Facebook and Others
Can Steal Dollars from Search
3 The Growing Competition Between Search and Social
8 Social Ad Effectiveness Is Improving
10 At Facebook, Attribution Is a Priority
12 Paid Search Isn’t Feeling the Pinch (Yet)
17 Priming the Market for Paid Search on Facebook
18 eMarketer Interviews
20 Related eMarketer Reports
20 Related Links
20 Editorial and Production Contributors
3. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 3
THE GROWING COMPETITION
BETWEEN SEARCH AND SOCIAL
In many respects, social media and paid search
are ideal partners. One facilitates branding and
engagement, while the other helps seal the deal by
driving traffic, leads and sales.
This cozy pairing doesn’t end there. When Facebook
began selling advertising, it did so through an
auction-based ad marketplace that used interest- and
demographic-based targeting, which was purposely
analogous to the keyword-driven auction marketplace
that Google and other search engines offer.That similarity
helped Facebook build an enormous advertising business
by making it easy for companies to streamline the
mechanics of social ad buying.
But the close partnership of search and social (at least in
advertisers’ minds—Google and Facebook, the primary
companies in each of those channels, have never been
friends) is about to be tested.
In the past year, Google and Facebook have introduced
ad products that borrow from each other’s playbook,
and both are making mobile the centerpiece of their ad
business. In another corner, Pinterest is targeting search
advertisers in a bid to expand its revenue base beyond
social media budgets.
And on the usage side, there is mounting evidence that
consumers are using social platforms for research and
discovery. While this activity by no means takes the place
of search, it represents a new wrinkle for marketers
to consider.
“Search and social are much more similar than they’ve
ever been in the past,” said Chris Haleua, senior product
marketing manager for the Adobe Media Optimizer
platform. “Many of the tactics you use in one can be
applied to the other.”
The changing scenario means that using search and
social together is more important than ever. And there’s
a new pitch marketers must consider: whether social can
replace search for some objectives.
FACEBOOKAND GOOGLEAD
PRODUCTS CONVERGENCE
As recently as a few years ago, most marketers believed
Facebook was good for branding and engagement—and
not much more. In fact, some marketers still believe that’s
the case.
But the company has added ad products for all stages of
the consumer purchase journey. And the more Facebook
digs into these lower-funnel objectives, the more options
there are for search marketers.
Ad executives interviewed by eMarketer uniformly agree
that this has been one of the biggest recent changes
at Facebook.
“Social can work across the entire funnel,” said Sanjay
Teckchandani, director of paid social at search marketing
agency Elite SEM. “While search can be that last touch
to get you that conversion, with social you have the
opportunity to do everything from driving awareness
to moving people down the funnel to conversion.
Facebook has moved very, very fast to meet the needs
of clients who are looking for direct response and
conversion metrics.”
“Facebook has come out with much more compelling
and interactive ad types that help marketers drive down
to direct response,” saidTiffany Miller, product strategy
lead for social advertising at ad tech firm Kenshoo. “Say
I’m a Banana Republic shopper. I might see a video ad
about their summer collection; that’s the awareness. I
might engage with that video, and then I’ll be put into
an audience.Then they will show me an ad that has a
special offer and drives me to their website to purchase
something. So, they’ve taken me through the entire
funnel through social.”
Four relatively recent ad products form the basis of
Facebook’s lower-funnel product set:
Custom Audiences.This feature lets advertisers use
a list of people, such as website visitors, app users or
email subscribers, to target ads on Facebook. Because
Facebook has email addresses for its users, it can match
(in a hashed, privacy-protected way) its information with
the advertiser’s information.
4. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 4
Advertisers have used Custom Audiences to retarget
website visitors by placing a Facebook pixel on their
website (such as on a product page) and then delivering
an ad to someone who visited that page the next time
they log on to Facebook.
“Let’s say we’re running a campaign in paid search and
the conversion doesn’t happen for us,” said Vanessa
Cooper, search director at performance marketing agency
Merkle. “We can remarket to those same people on
Facebook using custom URLs to build pools of search
traffic and leverage email lists to get back in front of those
people—and the conversion happens on Facebook.”
AutoTrader.com uses retargeting within social media
to reach consumers who may have started a search for
a particular vehicle and then left to visit Facebook or
another property.
“We still rely on search as the biggest traffic-driving
initiative. But we are looking at social to help amplify that
and shed light on new opportunities for us to build out
those campaigns,” said Greta Crowley, senior director of
consumer marketing at AutoTrader.com.
Lookalike Audiences.This feature is a prospecting tool
that lets advertisers target new potential customers who
are similar to ones they already know, such as their email
subscribers or fans of their Facebook page.The idea is
that these people may be more likely to be interested in
a marketer’s products and thus further down the funnel
than others would be.
One of search and social agency Wpromote’s clients,
a specialty shoe company, could use search to acquire
potential customers searching for “running shoes,” said
Mike Mothner, founder and CEO of Wpromote. But not
all of those searchers are the right fit for this client’s
particular type of shoe. By uploading a customer list to
Facebook, matching to lookalike users and layering on
additional targeting, “we can throw spears vs. nets and
find ideal customers that are not yet in-market,” he said.
After watching Facebook’s success, Google introduced
its own version of Custom Audiences in September
2015. Customer Match lets advertisers upload their email
lists and then target ads to signed-in users in search as
well as on Gmail andYouTube. An add-on feature called
Similar Audiences mimics the features of Facebook’s
Lookalike Audiences.
Dynamic Ads (formerly Dynamic Product Ads).These
ads, aimed at retail and travel companies, allow marketers
to upload their entire product catalog to Facebook (or in
the case of travel companies, a list of hotel properties)
and then target ads to people who have browsed or
shopped for those products on the retailer’s or travel
provider’s website.
With these ads, “Facebook can perform some of the
remarketing and conversion functions that might lag with
search,” said Sean O’Neal, president of media-buying
technology firm Adaptly.
Facebook is aggressively promoting Dynamic Ads to
search advertisers. During the company’s Q2 2016
earnings conference call in July 2016, COO Sheryl
Sandberg specifically called them out, saying they offer
marketers “search-like ROI.”
Dynamic Ads resemble Google’s Product Listing Ads
(PLAs), which have been available to all advertisers since
2010 and have proven extremely popular with ecommerce
advertisers. In a study conducted in Q2 2014, AdGooroo
found that the top 20 paid search advertisers (nearly all
were retailers) spent 63% of their desktop paid search
budgets on PLAs, with 37% going toward basic text ads.
More recently, in Q2 2016, Merkle’s US clients increased
spending on PLAs by 43% over the prior year, while clicks
increased 73%. Metrics for basic text ads were not nearly
as positive.
among campaigns analyzed by Merkle
US Paid Search Ad Benchmarks: Ad Spending, Clicks
and CPC YoY Growth, by Search Engine and Format,
Q2 2016
Ad spending Clicks CPC
Google 22% 34% -9%
—Google Shopping (PLAs) 43% 73% -17%
—Google text ads 10% 16% -5%
Bing and Yahoo Gemini -17% -19% 2%
—Bing product ads -6% 2% -8%
—Bing and Yahoo Gemini text ads -19% -21% 3%
Total 15% 23% -6%
Note: represents activity on the Merkle platform, broader industry metrics
may vary
Source: Merkle, "Digital Marketing Report Q2 2016," July 26, 2016
213946 www.eMarketer.com
Although the ads have somewhat different functionality
(Facebook’s Dynamic Ads are retargeting ads, while on
Google the ads are triggered by a search), both enable
retailers to show specific products to users and drive
purchasing behavior.
5. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 5
Retargeting ads on Facebook “work well and perform
very similarly to paid search,” said Jeff Campbell,
co-founder and managing director of search and social
agency Resolution Media.
Lead Ads.These ads help businesses connect with
consumers who want to sign up to learn more about
products or services. Search marketers can capture live
leads without asking prospects to leave Facebook.
Google doesn’t have a directly comparable ad product,
although it has been testing a format called Home Service
Ads in San Francisco.Those ads allow users who search
for providers such as housecleaners or maintenance
professionals to use buttons within an ad to send a
request to a provider.
With such similar ad formats, it’s now much more
difficult to put Facebook in one box and Google in
another box when it comes to fulfilling marketing
objectives. Marketers must consider how well each
platform works at each stage of the purchase journey—
not just the beginning, where Facebook has historically
played, or the end, where Google has been (and
continues to be) strong.
“Marketers and brands struggle to get their search and
social mix right,” said Chris Humber, head of the search
practice at Catalyst, a search and social marketing agency.
“We know that the consumer journey is no longer
a straight path; there are endless choices, platforms
and outlets, and it’s important that we help marketers
understand how to choose the right channels to drive the
right results.”
PINTERESTAND SNAPCHAT MAKE MOVES
IN SEARCH
Pinterest has for several years attempted to straddle the
line between search and social, but until recently the
company had never actively targeted search advertisers.
That’s changing, and in June 2016 the company began its
first explicit outreach for search ad dollars.
Meanwhile, Snapchat in August 2016 was reported to
have acquired search app startup Vurb, which helps users
find and discover things to do and then make plans with
friends. While Snapchat hasn’t said how it might integrate
Vurb, it’s possible that Vurb could help the company build
a deeper content offering around local search. Another
angle could be aroundTV and movie discovery, since
Snapchat has advertising and content partnerships in
both realms.
Pinterest is similarly interested in helping users to find
and discover things. “People use this platform in a very
different way than they use other platforms that are
considered ‘social,’” said Jon Kaplan, head of global sales
at Pinterest. “What Google did for information retrieval
we’re trying to do for discovery of new ideas.”
His goal is to position Pinterest, which has over 2 billion
searches per month, as a performance advertising
platform with a strong focus not only on search but also
on audience-based buying and programmatic advertising.
A search ad will look similar to other ads on the platform,
but Kaplan said the company plans to add keyword
targeting and may also launch its own version of
Google’s PLAs.
Executives interviewed by eMarketer were generally
positive about Pinterest’s prospects.
“Pinterest in a lot of ways represents the face of the new
search engine. Are they social? Are they search? It’s an
intersection of both,” said Adaptly’s O’Neal.
The company is “doing some pretty amazing things with
image-based search,” where a user can home in on a pair
of shoes or a piece of clothing in a photo and see results
that match that item, said Humber of Catalyst. “I think
that is pretty impressive, and even a step beyond what
Google is currently doing with image search.”
The challenge Pinterest will face is that it tends to be
used primarily when consumers have a major life event
(such as a wedding or the birth of a baby) or are planning
something (such as a trip or a party). Users visit often
during those times, but their usage often drops off once
the event has passed.
6. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 6
In addition, Pinterest is more of a planning tool than
something used to fill an immediate need (except
perhaps in categories such as food, where users can
find recipes for dishes they can make on the spot). For
advertisers, that means quick conversions may be less
likely than on typical search engines.
Pins have a longer shelf life, “so you could see
conversions happening even 30 and 60 days out,” said
Teckchandani. “When we measure success, we’re not
looking at a shorter time window; we’re looking at a
longer timeframe.”
SOCIAL’S ROLE IN
ANSWERING QUESTIONS
There is no question that search is a powerful signal of
intent, and typical social media interactions provide far
fewer of these signals.
But there are signs that social is playing a somewhat
larger role in product research and information-gathering
than before.
For example, research has found that younger internet
users are more likely than older generations to turn to
social media interactions with brands when researching
a product before purchase. According to a May 2016
survey of US internet users by Salesforce, millennial
respondents were five times more likely to tap into their
brand connections than were baby boomers (25% vs.
5%). However, only 14% of total respondents said they
used social media as a research source, so this is not a
major shift in behavior.
% of respondents in each group
Sources Used to Research a Product/Brand Before
Purchase According to US Internet Users,
by Generation, May 2016
Online product reviews
Retailer's website
In-store/in-person
Brand website
Word-of-mouth
News articles on the
brand/product
Email interactions with brand
Social media interactions
with brand
Other
Never research prior to buying
Millennials
(18-34)
78%
57%
51%
55%
50%
21%
15%
25%
4%
2%
Gen X
(35-54)
72%
55%
52%
53%
52%
19%
19%
16%
3%
4%
Baby boomers
(55+)
62%
54%
57%
49%
33%
22%
12%
5%
4%
5%
Total
69%
55%
54%
52%
40%
21%
15%
14%
4%
4%
Note: among those who purchased consumer goods in the past 12 months
Source: Salesforce, "2016 Connected Consumer Goods Report," June 13,
2016
211956 www.eMarketer.com
There is also some evidence that social is being used
across the purchase journey, not just at the beginning or
middle stages.
An April 2016 survey conducted by Forrester Consulting
for Catalyst found that search engines and search on
retailer websites were used by a significant majority of
US digital shoppers, but social search also played a role.
One in five respondents said they used social search at
the discovery stage, 14% did so at the consideration or
purchase stage, and 13% turned to social search after
they made a purchase.
% of respondents
Search Channels Used by US Digital Shoppers During
the Purchase Process, by Stage, April 2016
Discovery
71%
64%
20%
Consideration/purchase
74%
65%
14%
Post-purchase engagement
51%
45%
13%
Search engines
Search on
retailer sites
Social search
Note: n=999 ages 18+
Source: Catalyst, "Why Search + Social = Success For Brands" conducted
by Forrester Consulting, May 3, 2016
211116 www.eMarketer.com
7. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 7
The impact of this type of search behavior may be small,
but marketers are starting to take notice. “People are
going to social to ask their friends and families and
others for information on vehicles,” said AutoTrader.com’s
Crowley. “They’re also looking for information on local
dealerships, such as who had a good experience at what
dealer. I think social media is having a bigger impact than
ever before on car shopping and car purchasing behavior.”
Social is also playing a larger role in the discovery of
news and information. A May 2016 poll of internet users
across 11 countries by HubSpot showed that 79% of
respondents turned to search engines when they wanted
to catch up on articles, but 76% clicked on things they
saw in their Facebook feed.
% of respondents
Digital Sources Currently Used by Internet Users
Worldwide to Read Business, Lifestyle & News
Stories, May 2016
Search for relevant content via search engines
79%
Read my Facebook feed and click on interesting articles/videos
76%
Go directly to a publication's website
55%
Through mobile notifications
48%
Read my Twitter feed and click on interesting articles/videos
41%
Go to specific blogs
37%
Read my LinkedIn feed and click on interesting articles/videos
36%
Through notifications via Slack or other messaging platforms
26%
Find content on Medium
22%
Find content through an RSS feed
21%
Through Flipbook, feedly or another reader app
17%
Note: ages 18+
Source: HubSpot, "The Future of Content Marketing: How People Are
Changing the Way They Read, Interact, and Engage With Content," June 25,
2016
213786 www.eMarketer.com
Consumers aren’t abandoning search engines in any of
these scenarios. But social, because of its wide usage
and breadth of content, is becoming a venue for people
to obtain information that complements what they find
in search.
A NEW OPPORTUNITY FOR MARKETERS
With the growing number of lower-funnel ad products on
Facebook, as well as the launch of Pinterest’s paid search
product, there are more ways than ever for marketers to
not only use search and social together, but compare the
effectiveness of each.
“We love these overlaps and options,” said Wpromote’s
Mothner. “To have multiple platforms for product feeds,
dynamic retargeting and customer or CRM [customer
relationship management] matching just gives us that
many additional levers to pull and optimize within and
across platforms.”
Facebook is making sure ad clients know exactly how
well it plays with search. For instance, its December 2015
report found that mobile ads on Facebook drove a 6.3%
lift in unique search traffic for US brands.
Lift in Unique Search Traffic due to Exposure* to
Facebook Ads and Among US Brands, by Device,
July-Sep 2015
Lift in unique search traffic
—Mobile 6.3%
—Desktop 0.9%
Primary device used for search
—Desktop 63%
—Mobile 37%
Primary device on which Facebook ads were delivered
—Mobile 70%
—Desktop 18%
—Both 10%
Average number of ads delivered
—Mobile 5.5
—Desktop 5.1
Note: among 23 campaigns analyzed; read as brands saw a 6.3% lift in
mobile search traffic after exposure to Facebook ads on any device;
numbers may not add up to 100% due to rounding; *on any device
Source: Facebook, "Cross-Channel Planning: Making Search Work Harder,"
Dec 9, 2015
202574 www.eMarketer.com
“Whenever we run social ads for a product, we see
a spike in related searches,” said Steve Carbone,
managing director and chief digital and analytics officer at
MediaCom. “Social creates interest, then consumers use
search to learn more and connect with the advertiser.”
Adobe and other companies have developed technology
to help advertisers automate the process of running paid
search ads and social ads.
8. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 8
“If they’re running Product Listing Ads on Google search,
companies are exploring how can they potentially take
those ads and convert them to Facebook [Dynamic]
Product Ads,” said Monica Lay, senior product marketing
manager for Adobe’s Adobe Media Optimizer.
The agency world is adapting as well. Companies that
have traditionally focused on the paid search realm are
ramping up their services for social media buying.
For example, 12-year-old search marketing company
Elite SEM last fall brought inTeckchandani, a former
social media executive at Razorfish, to run its new paid
social arm.
“More and more clients are asking for social,”
Teckchandani said. “They’ve done search for a long time.
But now they’re understanding that they need to expand
their horizons and find other touchpoints, too.”
Search’s maturity is a positive to many marketers,
because it’s reliable and efficient. But that maturity is also
a liability. “If you think about search, competition is really
high. Costs are high. Keywords are very expensive,” said
Miller of Kenshoo.
The social platforms also have a leg up on the mobile
side, because they don’t have a legacy desktop business
that they need to protect, as Google and other search
providers do.
As companies such as Facebook and Pinterest get
serious about targeting search advertisers and proving the
effectiveness of their advertising, billions of dollars are
potentially at stake.
SOCIAL AD EFFECTIVENESS
IS IMPROVING
Paid search is still considered one of the most
effective forms of advertising, but social is gaining. In
interviews conducted by eMarketer, it is evident that
the work Facebook has done to upgrade advertising
measurement is resonating with marketers. Surveys
also show improving opinion about the effectiveness
of social media advertising relative to search.
“Five years ago, it was very difficult to tie tangible
business results to Facebook,” said Adobe’s Lay. “Now,
the way you measure Facebook [advertising] is very much
in line with [how] you measure ROI across any other
channel, whether that’s search or display.”
Historical data shows how far the social channels
have come. When Experian Marketing Services asked
marketers worldwide in December 2013 to rank the
most effective marketing channel, 45% cited search
marketing as their top choice. Only 5% chose social
display advertising.
Fast forward to February 2016. An Econsultancy survey
of senior advertisers in North America found that
people-based advertising (a way of delivering advertising,
championed by Facebook, in which ads are targeted to
real people rather than using cookies) was considered
to perform better than most other types of advertising.
In the study, 65% of respondents rated it better than
standard display, 64% said it was better than email
marketing and 59% said it was better than paid search.
9. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 9
% of respondents
Performance of People-Based Advertising* vs. Select
Formats According to Senior Advertisers in North
America, Feb 2016
Email marketing
28% 36% 31% 5%
Paid search marketing
20% 39% 34% 7%
SMS marketing
19% 38% 40%4%
Much better
Somewhat better
About the same
Somewhat worse
Note: n=184; numbers may not add up to 100% due to rounding; *a
strategic discipline that targets ads at real people rather than cookies
across devices and channels
Source: Econsultancy, "People-Based Advertising: Evaluating the Impact
and Future of Addressable Media" in partnership with Signal, April 12, 2016
208452 www.eMarketer.com
Standard display advertising
17% 48% 33% 2%
A June 2016 survey of US marketers by the Direct
Marketing Association (DMA) and Demand Metric found
the median ROI of social media advertising (28%) to be
slightly higher than paid search (25%), though both trailed
email advertising by a wide margin.
Median ROI for Select Channels/Formats According to
US Marketers, June 2016
Email 122%
Social media 28%
Direct mail 27%
Paid search 25%
Online display*18%
Note: *return on ad spending
Source: Direct Marketing Association (DMA) and Demand Metric, "2016
Response Rate Report," July 28, 2016
214049 www.eMarketer.com
Studies that looked at smaller segments of the marketer
universe also show generally positive attitudes toward
social media advertising in comparison to search.
■■ An August 2015 survey of UK content marketers by
Content Marketing Institute (CMI) and Lionbridge
showed that 56% of those polled found search engine
marketing effective for promoting their content, only
slightly higher than the 50% who considered social
ads effective.
■■ In a February 2016 survey by Street Fight of US
“national-to-local” advertisers—referring to large
national brands that focus on local marketing—22%
of respondents said social media advertising was their
most effective marketing channel, tied with national
TV and ahead of search engine optimization (chosen by
15%) and paid search, cited by just 10%.
“We are seeing customer acquisition ROI in social, which
used to lag way behind search, showing ROI similar to
search for lots of advertisers,” said Wpromote’s Mothner.
In some cases, social ROI is better than search, he
added, such as when new brands use social to introduce
themselves to potential users.
10. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 10
AT FACEBOOK, ATTRIBUTION IS
A PRIORITY
One thing that will help social to build business
with search advertisers is improved attribution—
the practice of assigning credit to any
advertising- or marketing-driven interaction or
other brand-imposed touchpoint.
Facebook is very heavily focused on attritbution.The
better the company gets at helping marketers know
whether an ad resulted in an action or a purchase, the
less marketers will need to rely on last-click attribution—
which overwhelmingly favors search engines.
In the past, “search was getting a ton of credit,” said
Sarah Baehr, executive vice president and managing
partner for digital investment at Horizon Media. “What
we have found through various attribution studies is that it
was totally getting over-credited.”
Attribution is a top concern for marketers. Mixpo
found in an April 2016 study that 69% of US digital
ad professionals polled were either extremely or very
concerned about it.
When the DMA and Winterberry Group surveyed US
marketing professionals in April 2016, 81.4% said they
were extremely or somewhat likely to prioritize marketing
measurement/attribution in the coming year.
% of respondents
Likelihood of Prioritizing Marketing
Measurement/Attribution According to US Marketing
Professionals, April 2016
Extremely likely
42.1%
Somewhat likely
39.3%
Neither likely
nor unlikely
10.3%
Not very likely
6.2%
Not at all likely
0.7%
Unsure
1.4%
Note: in the coming year
Source: Direct Marketing Association (DMA) and Winterberry Group,
"Quarterly Business Review Q1 2016," June 13, 2016
211831 www.eMarketer.com
“It’s very difficult to tease out what one piece of the
funnel is doing or what one tactic is doing, vs. the
myriad other tactics that are also going on,” said Ed Gold,
advertising director at State Farm Insurance. For example,
a consumer might have been exposed to State Farm
TV ads, radio ads and display ads before doing a search.
“From an attribution standpoint, it’s very difficult to tease
out what is the true driver” of that search action, he said.
The increasing importance of mobile makes attribution
even more challenging. A March 2016 survey of client-side
advertisers and agencies worldwide by ClickZ Intelligence
and Search Optics showed that about three in 10
respondents in both groups said attribution was a barrier
for putting mobile at the center of integrated marketing.
% of respondents
Most Significant Challenges of Putting Mobile at the
Center of Integrated Marketing According to
Client-Side Advertisers vs. Agencies Worldwide,
March 2016
Client-side
advertisers
Agencies
Lack of resources/lack of budget 53% 50%
Disparate data sources 33% 26%
Meaningful marketing attribution 30% 29%
Channels treated separately 30% 21%
Lack of marketing knowledge 26% 41%
Poor marketing technology 25% 31%
Agency ownership of activities 13% 16%
Other 1% 4%
None of these 9% 6%
Source: ClickZ Intelligence and Search Optics, "The State of Mobile
Advertising," April 12, 2016
208526 www.eMarketer.com
Cross-device measurement is a key feature of Facebook’s
attribution work. Because of the way Facebook is
designed, it can track a user’s ad exposures and
interactions on mobile and desktop. Attribution models
that rely on cookies have a hard time following users
between desktop and mobile.
Facebook’s other work in attribution includes:
Chain-length modeling.The company has researched
ways to line up all the advertising touchpoints leading
up to an action. Instead of focusing on a chain length of
one (which simply looks at the last touchpoint before
an action), Facebook has focused on accurately building
longer chain lengths.
“No matter what model you use, if you can get the
chain length accurate, you’re way better off,” said David
Jakubowski, head of ad tech at Facebook.
11. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 11
Self-service tools. Facebook has introduced a set of
self-service tools based around attribution models
including last-touch, three-back, even credit and time
decay, according to Jakubowski. Advertisers can choose
which tool they want to use and compare them against
each other, as well as compare chains derived from
cookie-based measurement to those derived from
people-based chains.
Conversion lift measurement.Tools introduced in 2015
help marketers compare the conversions that happen
when someone sees a Facebook ad vs. someone who
does not see a Facebook ad, as well as the relative
conversion among several different Facebook ads.
Facebook considers lift measurement a key part of the
attribution puzzle.
Offline conversion measurement. In June 2016,
Facebook introduced tools including the Offline
Conversion API that enable retailers to measure store
visits and in-store sales stemming from a Facebook
ad campaign.
Executives interviewed by eMarketer were generally
positive about Facebook’s work.
“Facebook is evolving its capabilities a lot and they’re
moving very, very fast,” saidTeckchandani. “They are
aware of the attribution issue and are trying to not just
make sense of it, but to actively solve for it.”
And as Facebook gets closer to figuring out attribution,
that will help marketers better understand where to place
their ads.
“As ad strategies across those two channels increasingly
converge, it’s becoming more and more important to get
measurement and attribution together, so we can give
deserved credit to those channels and optimize budgets
accordingly,” said Lay.
But there are still roadblocks for Facebook to overcome,
chief among them the complexity of attribution.The sheer
number of channels, data sources and systems required
to feed attribution models can make implementation of
any attribution model frustrating.
“It’s hard for brands and for agencies to understand how
[social] plays together with other marketing channels
like search or display,” saidTerrence Lai, group director
of analytics at Deep Focus. [Editor’s Note: Lai has since
joined Coach as director of global customer intelligence
and data science.] “So for social specifically, yes, I think
attribution has improved, but it hasn’t gotten to the point
yet where we can look at it across the full marketing mix.”
That’s partially because Facebook’s tools don’t play
well with other well-known analytics services. “Some
clients live and die by Google Analytics, and some of
the conversions that are happening from social channels
are not being tracked accurately, or they’re not being
attributed accurately to Facebook,” saidTeckchandani.
And Facebook faces competition from several corners,
including major measurement players such as Nielsen
and comScore Inc.; probabilistic playersTapad and
Drawbridge, which can approximate identities using
publicly available data; and Google itself.
In summary, attribution remains a difficult problem, and
Facebook is working hard to try to solve it. Advertisers
feel positively about this work, but there is still a long way
to go before truly reliable attribution models are common.
Learning when and how much to credit social media will
give advertisers a better understanding of how well their
campaigns are working vs. search, and will play a role in
future budget decisions.
For more on attribution, see eMarketer’s July 2016 report,
“Cracking Cross-Device Attribution in 2016: Data Quality,
Blended Models and Merging Online-Offline Data.”
12. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 12
PAID SEARCH ISN’T FEELING THE
PINCH (YET)
Despite the developments highlighted above,
search budgets have yet to shift to social. Search ad
spending is still rising (as is Google’s revenue), and
most executives interviewed by eMarketer said that
while their social spending is growing more quickly,
it’s not at the expense of search.
“We are not shifting away any of our budgeting from paid
search,” said Beth Monda, vice president of ecommerce
atTeleflora. “We are expanding our budget to test new
ideas or expand our reach in paid social, but not at the
expense of paid search. It still performs well for us.”
“I would say budgets are shifting [toward social], but I
wouldn’t say that they’re necessarily shifting from search,”
said Humber. “I would say that budgets are shifting from
other channels—in some instances, display.”
However, it takes a while for budget shifts to become
apparent. Consider how long the industry has been
speculating about social’s impact onTV spending. Reading
the tea leaves from three perspectives sheds light on
what might happen in the future:
■■ Forecasts for ad spending on search, social, Google and
Facebook from eMarketer and others do not yet show
any shifts in budget, but they do show that social and
Facebook will grow faster than search and Google.
■■ Quarterly analyses from ad industry companies
Kenshoo, Merkle and IgnitionOne show year-over-year
declines in the growth of search ad spending among
clients. However, these three firms attributed it to
marketers shifting spending from desktop to mobile,
where costs per click (CPCs) tend to be lower. Social ad
products such as Dynamic Ads are gaining traction, but
they are not yet pulling money from search spending.
■■ Spending trends for retail, travel and automotive
companies may provide the best insight into whether
ad budgets may shift. Industry data and interviews
indicate dollars are moving from search to social
on a case-by-case basis.These trends will bear
further watching.
AD SPENDINGTRENDS
As a mature business, search advertising is forecast to
grow at a slower pace than social in the next few years.
ZenithOptimedia, in a June 2016 report, said it expects
social ad spending worldwide to grow 24% per year
on average between 2015 and 2018, compared with an
annual average growth rate of 13% for paid search.
Search ad spending is still substantially larger than social
spending. According to ZenithOptimedia, search ad
spending will reach $102.2 billion worldwide in 2018, vs.
$38.4 billion for social.
While the spending gap between search and social has
narrowed over the years—mainly thanks to Facebook’s
rapid growth—it is still substantial. ZenithOptimedia
expects social media advertising in the US to increase
27% in 2016 to $10.4 billion, while paid search will grow
12% to about $20.8 billion.
At least one company, investment bank Nomura
Securities, believes social ad spending will get much
closer to search expenditures within a few years. In a
report issued in March 2016, Nomura estimated that the
gap between search and social ad spending in the US
will be roughly $3 billion by 2020, down from nearly
$18 billion in 2014.
Google Search Revenues
Google’s search business was looking somewhat
shaky until Q2 2016, when parent company Alphabet
surprised most by reporting better-than-expected results.
Advertising revenues increased 19% year over year to
$19.1 billion and paid clicks on Google websites (including
AdWords on Google.com as well as revenues from
YouTube, Gmail, Finance, Maps and Google Play) grew
37%. Alphabet attributed the results to its focus on
mobile and on video.
Meanwhile, CPCs in Q2 2016 continued to trend lower,
due mainly to advertisers’ greater use of mobile search.
13. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 13
among campaigns analyzed by Google
Google Ad Benchmarks Worldwide: Paid Click and
CPC YoY Growth, by Site Type, Q2 2015-Q2 2016
2015 2016
Paid clicks
—Google websites*
—Google network members' websites**
Total
CPC
—Google network members' websites**
—Google websites*
Total
Q2
30%
-9%
18%
-3%
-16%
-11%
Q3
35%
-5%
23%
-4%
-16%
-11%
Q4
40%
2%
31%
-8%
-16%
-13%
Q1
38%
2%
29%
-8%
-12%
-9%
Q2
37%
0%
29%
-8%
-9%
-7%
Note: represents activity on the Google platform, broader industry metrics
may vary; *includes AdWords, Google Preferred,YouTube ads (e.g.,
TrueView) and other owned and operated properties such as Google
Finance, Gmail, Google Maps and Google Play; **includes non-Google
properties participating in AdSense for content and search, AdExchange,
AdMob, all DoubleClick-related revenues and other network products
Source: Alphabet, "Second Quarter 2016 Results," July 28, 2016
214012 www.eMarketer.com
With that strong result, eMarketer expects Google’s net
ad revenues worldwide will hit $63.11 billion in 2016, up
19.0% from last year.
billions and % change
Google Net Ad Revenues Worldwide, 2015-2018
Google net ad revenues
—% change
Google net mobile
internet ad revenues
—% change
2015
$53.05
15.0%
$24.31
49.4%
2016
$63.11
19.0%
$37.57
54.5%
2017
$72.69
15.2%
$49.72
32.3%
2018
$82.58
13.6%
$61.26
23.2%
Note: net ad revenues after company pays traffic acquisition costs (TAC)
and content aquisition costs (CAC) to partner sites; excludes SMS, MMS
and P2P messaging-based advertising; includes ad spending on tablets
Source: company reports; eMarketer, Sep 2016
215582 www.eMarketer.com
Google’s US search revenue growth is expected to slow
this year, but not substantially. eMarketer anticipates
Google’s search ad revenues to reach $24.77 billion in
2016, up 21.0% year on year.That’s down from 25.8%
growth and $20.47 billion in 2015.
Meanwhile, few of the largest US search advertisers
have decreased their search spending in recent years.
Between 2014 and 2015, only one company among the
top 10 tracked by AdGooroo—InterActiveCorp—reduced
paid search spending. Most increased search ad spending
by double digits.
millions and % change
Top 10 US Paid Search Advertisers, Ranked by
Measured Search Ad Spending, 2014 & 2015
% change
1. Amazon 12.2%
2. InterActiveCorp -32.3%
3. Expedia 30.9%
4. Priceline.com 34.7%
5. AT&T 7.8%
6. Wal-Mart 3.4%
7. Blucora 90.4%
8. Target 27.3%
9. Comcast 2.1%
10. Sears 15.6%
Total (billions)
2014
$323.2
$342.6
$127.4
$93.7
$108.7
$106.2
$57.1
$77.7
$92.5
$76.9
$16.49
2015
$362.7
$232.1
$166.7
$126.2
$117.2
$109.9
$108.7
$98.9
$94.4
$88.9
$18.27 10.8%
Source: AdGooroo as cited by Ad Age Datacenter, July 1, 2016
213641 www.eMarketer.com
FacebookAd Revenues
Facebook still trails Google in ad revenues, but the gap is
narrowing. It had a strong Q2 2016 as well, reporting
$6.2 billion in ad revenues, up 63% from the same
quarter last year. Mobile represented 84% of the total.
eMarketer expects Facebook’s worldwide ad revenues
will reach $25.94 billion this year, up 51.9% from
$17.08 billion in 2015. US ad revenues will grow 48.6%
to $11.93 billion.
In 2015, Facebook had about one-third of Google’s ad
revenue worldwide. But by 2018, the gap will close
considerably: Facebook will take in about half as much ad
revenue as Google, according to eMarketer.
QUARTERLYANALYSES
Companies that track trends in their clients’ use of paid
search and social advertising provide an additional level
of insight about budgeting.Two such companies, Merkle
and Kenshoo, reported slowing growth in paid search
spending, while IgnitionOne recorded actual declines in
search spending in recent quarters.
At the same time, Merkle and Kenshoo reported strong
increases in social ad spending among clients. But they
didn’t go as far as to say that social’s growth was causing
search spending growth to slow. Instead, they cited
marketers’ shift to mobile. Mobile search advertising
tends to be less expensive than desktop, and marketers
have been steadily increasing their usage of it.
14. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 14
Merkle reported in its Q2 2016 client spending study that
US paid search spending growth was at a four-quarter
low, although still up 15% year over year. Spending on
Google search ads climbed 22% year over year, down
from 25% growth in Q1 2016.
Meanwhile, Merkle clients in North America increased
spending on Facebook by 121% year over year in Q2
2016.The company attributed the growth to increased
brand ad investment as well as newer products such as
Dynamic Ads.
At Kenshoo, the trend was similar, albeit with lower
growth rates for search and social. Spending worldwide
on paid search increased 10% year over year in Q2 2016,
driven by increases in mobile search spending and use of
shopping ads (aka Product Listing Ads). Social spending
grew 47% in the quarter.
At IgnitionOne, clients’ US paid search spending fell 1%
in Q2 2016, shrinking for the second quarter in a row.
Spending fell 5% in Q1 2016, the first drop in six years,
according to the company.
The data from these companies doesn’t yet offer any
proof of budgetary shifts, but this is an area that will be
worth monitoring as these and other companies issue
additional quarterly analyses in 2016 and beyond.
THREE CATEGORIESTOWATCH:RETAIL,
TRAVELANDAUTO
Although the previous two types of data don’t show
social gaining from search, a closer look at ad spending
within three industries—retail, travel and automotive—
provides more clarity. Industry data and anecdotal
interviews indicate that some money is moving from
search to social on a case-by-case basis.
The retail and travel industries are heavily weighted
toward search advertising over display, according to
eMarketer. It is no coincidence that they are the sectors
Facebook has focused its attention on with Dynamic Ads.
The auto industry is more evenly divided between search
and display, but given its focus on generating leads,
promoting dealership foot traffic and (ultimately) selling
vehicles, search is an important component.
billions
US Digital Ad Spending, by Industry and by Format,
2016
Display*
—Video
Search
Other**
Total
Display*
—Video
Search
Other**
Total
$3.92
$1.37
$3.93
$0.86
$8.71
$2.00
$0.72
$1.70
$0.35
$4.05
$2.44
$0.67
$2.35
$0.42
$5.21
$6.46
$1.95
$7.22
$1.42
$15.09
$4.06
$1.05
$1.56
$0.35
$5.97
$3.70
$1.08
$3.23
$0.62
$7.55
$2.31
$0.76
$0.84
$0.14
$3.29
$1.95
$0.61
$3.12
$0.62
$5.69
$3.68
$0.95
$3.96
$0.73
$8.37
$1.57
$0.46
$1.22
$0.17
$2.96
$0.92
$0.21
$0.84
$0.16
$1.93
$32.99
$9.84
$29.99
$5.84
$68.82
Note: includes advertising that appears on desktop and laptop computers
as well as mobile phones, tablets and other internet-connected devices on
all formats mentioned; numbers may not add up to total due to rounding;
*includes banners, rich media, sponsorships, video and ads such as
Facebook's News Feed Ads and Twitter's Promoted Tweets; **includes
classifieds and directories, email, lead generation and mobile messaging
Source: eMarketer, April 2016
207075 www.eMarketer.com
Automotive
Entertainment
Financial services
Healthcare & pharma
Retail8
Media7
Telecom9
Travel10
Other11
Total12
1
Computing products &
consumer electronics
2
CPG & consumer products3
4
5
6
1 2 3 4 5 6
87 9 10 11 12
Retail
eMarketer forecasts US retail advertisers will put 47.8%
of their $15.09 billion in digital ad spending toward search
this year, while 42.8% will go toward display.
Among ecommerce clients of advertising automation
firm Nanigans, Facebook’s Dynamic Ads “continue to see
roaring adoption,” according to the company’s Q2 2016
Facebook ad spending report. Spending was up 14% in
the quarter compared with Q1 2016.
When it comes to customer acquisition marketing, social
media marketing is more likely to be used than search
and display ads, according to Campaigner’s June 2016
survey of digital retail marketers in North America.
15. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 15
% of respondents
Leading Areas in Which Digital Retail Marketers in
North America Plan to Focus Their Customer
Acquisition Marketing, June 2016
Email marketing 61%
Social media 44%
Search and display ads 35%
Direct mail 13%
Event sponsorship7%
Note: respondents chose their top 2
Source: Campaigner, "Internet Retailer First Impressions Survey," June 28,
2016
212899 www.eMarketer.com
Another trend that may benefit social is that some
retailers are starting to assign one internal person or
group to oversee digital ad spending. Instead of having
separate groups for search and social, for example, they
would be under the same umbrella.
In the past, “you had the ecommerce group on one side
of the building and then the brand awareness marketing
side and the traditional media group on the other side,”
said Campbell of Resolution Media. “Now this world
of biddable or programmatic is coming together, so it’s
a single person that’s managing search and social and
display and saying, ‘Based on my goals, I want to fluidly
move this budget from here to there.’”
If Facebook can solve the attribution puzzle,Teleflora, a
heavy search advertiser, would feel more comfortable
shifting budget, according to Monda.
“We will put money behind the efforts that can help us
gain customers and drive orders at a cost that’s effective
for us,” she said. “If we can understand exactly who that
consumer is in a consistent way—maybe they started
looking 18 days ago and they’ve jumped between devices
and they’re eventually going to close somewhere—we
could see a lot of growth for social.”
Travel
Travel industry spending is also ripe territory for Facebook,
at least potentially. eMarketer forecasts that 54.9% of the
$5.69 billion spent on US digital travel advertising this year
will go toward search, while 34.3% will go toward display.
One factor working in social’s favor is its pricing.
Kenshoo found that between Q1 2015 and Q1 2016,
CPCs for travel ads in social were about half of those for
search advertising.
among ads tracked by Kenshoo
Paid Search Travel Ad Benchmarks Worldwide: CTR
and CPC, Q1 2015-Q1 2016
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
CTR 3.7% 3.4% 3.7% 4.5% 4.5%
CPC $0.57 $0.65 $0.58 $0.54 $0.56
Note: represents activity on Kenshoo's platform, broader industry metrics
may vary
Source: Kenshoo, "Digital Travel Transformation: ImprovingYour Marketing
in Today's Changing Travel Landscape," June 15, 2016
213694 www.eMarketer.com
The CPC for travel advertisers in search was 56 cents
in Q1 2016, while the CPC for travel ads in social was
27 cents.
among ads tracked by Kenshoo
Social Travel Ad Benchmarks Worldwide: CPM and
CPC, Q1 2015-Q1 2016
Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016
CPM $2.84 $2.37 $2.94 $2.50 $2.47
CPC $0.28 $0.28 $0.35 $0.30 $0.27
Note: represents activity on Kenshoo's platform, broader industry metrics
may vary
Source: Kenshoo, "Digital Travel Transformation: ImprovingYour Marketing
in Today's Changing Travel Landscape," June 15, 2016
213695 www.eMarketer.com
Facebook’s newly introduced Dynamic Ads for travel are
a key innovation to watch. Deutsche Bank, in a July 2016
research note, asserted that “nearly all major [online
travel agencies] and hotel chains are up and running on
travel-customized” Dynamic Ads on Facebook, which it
considered a strong sign of success, given that the ads
had only become widely available to travel advertisers in
Q1 2016.
Expedia, the top paid search advertiser in Q1 2016
according to AdGooroo, was a launch partner for
Facebook’s Dynamic Ads for travel. When Expedia
president and CEO Dara Khosrowshahi was asked
about those ads during Expedia’s Q2 2016 earnings
conference call in July 2016, he said: “As far as Facebook,
the Dynamic Ads go, we’re experimenting and really
starting to scale up with Facebook across our brands
on a global basis. ... All of the brands are experimenting
with Facebook and finding veins—traffic and conversion
veins—that are awfully interesting. So our spend is
up significantly.”
16. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 16
Auto
US automotive advertisers are split evenly between
search and display advertising, with about 45% of
industry spending going to each category this year,
according to eMarketer. Auto advertisers will spend
$3.93 billion on paid search and $3.92 billion on display in
2016, with display climbing nearly 25% and paid search
rising 18%.
There is anecdotal evidence from eMarketer interviews
and elsewhere that indicates auto companies are looking
closely at results from search and social campaigns and
making case-by-case adjustments.
According to a July 2016 article in Automotive News, auto
dealer groups are among those that have started to shift
ad budgets to Facebook after Google earlier this year
changed the way ads were displayed on desktop search
results pages. (Among other things, Google removed
most text ads from the right sides of pages and added an
ad to the top of organic results. It also reduced the total
number of ads that can appear on a search results page
to a maximum of seven.)
Todd Cahan, managing partner of a Chicago-area
dealership group, told Automotive News that it is taking
more ad dollars on Google to get the same visibility
for his two stores. “Google probably has far greater
exposure to a greater number of people,” he said in the
article. “But Facebook is probably going to start closing
the value of that gap with the quality of people they’re
communicating with.”
AutoTrader.com’s social ad budget has grown upward of
50% in the past couple of years, according to Crowley.
And while the company still relies on search to drive
traffic, “we are looking at social to help amplify that and
shed new light on new opportunities for us to build out
those campaigns,” she said, adding that retargeting is a
key part of that.
At least one auto marketer has found better success
with social than with search for some objectives, and
has shifted budgets. When Chevrolet was looking to
increase market share from competitors, which it calls its
“conquest” strategy, it learned that social worked better
than search, according to Doug Peeples, digital media
manager for the General Motors brand.
“We were heavily invested in conquest within search,”
he said. “We saw that social was a better play, so we
shifted from search into social. We try to actively look at
our channels to make sure that we keep our finger on
the pulse of what’s performing and optimize accordingly.
And that’s definitely one of those instances where we’ve
done this.”
It’s too early to call these examples a trend, but it is
definitely not too early to at least pay attention to what
companies like Chevrolet are doing—and if their budget
shifts become more frequent.
17. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 17
PRIMING THE MARKET FOR PAID
SEARCH ON FACEBOOK
What is notable in all of this is that Facebook has
been able to start targeting search advertisers
without even having a paid search ad product.These
efforts will pave the way for marketers to feel more
comfortable using Facebook when it eventually starts
selling paid search.
During Facebook’s Q2 2016 earnings conference call,
chairman and CEO Mark Zuckerberg explicitly called out
statistics about the company’s search usage, saying users
were conducting 2 billion searches per day.
And in response to a question about search advertising on
Facebook, Zuckerberg said the company is in the second
of three phases on a path toward monetization. First
comes building a consumer use case, he said, followed
by the development of tools for consumers to engage
organically with businesses.
“Once there’s a large volume of people interacting
with businesses, [we] give businesses tools to reach
more people and pay, and that’s ultimately the business
opportunity,” said Zuckerberg. “I’d say we’re around the
second phase of that in search now.”
Facebook experimented with a search ad product a few
years ago but killed it shortly afterward. Now, as the
company looks more seriously toward a future launch of
paid search, a few details of its game plan are starting
to emerge.
WHAT PAID SEARCH MIGHT LOOK LIKE
It may not look all that different from other types of
search advertising. “The business model for search is
pretty well understood,” saidTom Stocky, vice president
of search at Facebook. “I don’t think there’s any reason
for us to think of some new way to monetize search.”
It may focus on content search behavior, rather than
product search behavior. “One of the big growing
use cases that we’re investing a lot in is [searching for]
content in the ecosystem,” Zuckerberg said during the
Q2 2016 earnings call. “There’s a reasonable amount of
behavior in there, which is looking for things that, over
time, could be monetizable or [show] commercial intent.”
Video search could be one of the first paid
opportunities. “Facebook has been very explicit that
they see the future of Facebook being a list of videos.
So as that continues happening, that’s when Facebook
search gets more interesting,” said Victor Pineiro, vice
president of social media integration at agency Big
Spaceship. “Now, most of the video you’re served is in
the context of who you follow, and I’m hoping that there’s
going to be more in terms of searching for videos.” Ad
industry executives say they would like to see better ways
to promote videos to users who are looking for them.
Social media already serves as a strong discovery engine
for video. In a March 2016 survey of US digital video
viewers conducted by the Interactive Advertising Bureau
and GfK, 41% of respondents said they discovered
original digital videos on social media sites, double the
percentage who found such videos in search (20%).
% of respondents
Ways in Which US Digital Video Viewers Discover
Original Digital Videos*, March 2016
Friends/relatives/word-of-mouth
54%
Social media sites (Facebook, Twitter, etc.)
41%
Ads
29%
Clicking on links that I stumble upon
28%
Recommendations on websites/apps offering original digital
video
22%
Search results
20%
The news/I read about it
19%
Note: n=407; ages 18+; among those who watch original digital video at
least monthly; *professionally produced video for ad-supported online
distribution and viewing only (not TV); excludes original digital video that is
not ad-supported (e.g., Netflix original series)
Source: Interactive Advertising Bureau (IAB), "2016 Original Digital Video
Study" conducted in partnership with GfK, May 11, 2016
210253 www.eMarketer.com
There won’t be search ads until Facebook can
quantitatively show intent.The main drawback industry
executives see when it comes to comparing Facebook
to paid search is that Facebook users don’t show intent
the way they do in search. But there’s no reason to think
Facebook won’t use its enormous database and analytical
prowess to figure this out.
18. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 18
Facebook’s head of search basically said as much: “I
think as soon as you can target intent within Facebook
search, that’s something that’s going to be of interest,”
said Stocky.
Proving that Facebook users show intent will give
advertisers more reason to consider paid search
advertising there.
“I could imagine a scenario where somebody has posted
to their own Facebook feed some beautiful flowers that
they have received and they’re super excited about it,”
saidTeleflora’s Monda. “And then somebody that they
know is searching [on Facebook] and they realize that oh,
Susie received great flowers fromTeleflora, I should look
them up. So I could see a really nice marriage for us in
social and search when that starts happening.”
EMARKETER INTERVIEWS
As Lines Between Branding and Direct Response Blur,
Social and Search Advertising Cross Paths
Greta Crowley
Senior Director, Consumer Marketing
AutoTrader.com
Interview conducted on July 12, 2016
For GoDaddy, Social Media Marketing Expands
Search Reach
Renee’ Dornan
Director, Digital Advertising
GoDaddy
Stacie Hull
Senior Director, Marketing
GoDaddy
Interview conducted on July 14, 2016
When It Comes to Advertising, Search and Social
Complement Each Other
Ed Gold
Advertising Director
State Farm Insurance
KellyThul
Digital Director
State Farm Insurance
Interview conducted on July 8, 2016
Social’s Next Evolution? Pinterest Begins to Monetize
Users’ Searches
Jon Kaplan
Head of Global Sales
Pinterest
Interview conducted on June 28, 2016
Social AdvertisingWorks for Impulse Buys,
Teleflora Says
Beth Monda
Vice President, Ecommerce
Teleflora
Interview conducted on July 19, 2016
19. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 19
How Chevrolet Allocates Its Budget Across Search
and Social Advertising
Doug Peeples
Digital Media Manager
Chevrolet
Interview conducted on June 30, 2016
Sarah Baehr
Executive Vice President and Managing Partner,
Digital Investment
Horizon Media
Interview conducted on June 21, 2016
Jeff Campbell
Co-Founder and Managing Director
Resolution Media
Interview conducted on July 20, 2016
Steve Carbone
Managing Director and
Chief Digital and Analytics Officer
MediaCom
Interview conducted on June 27, 2016
Vanessa Cooper
Search Director
Merkle
Interview conducted on July 1, 2016
Chris Haleua
Senior Product Marketing Manager,
Adobe Media Optimizer
Adobe
Interview conducted on June 30, 2016
Chris Humber
Head of Practice, Search
Catalyst
Interview conducted on July 1, 2016
David Jakubowski
Head of AdTech
Facebook
Interview conducted on July 8, 2016
Terrence Lai
Group Director, Analytics
Deep Focus
Interview conducted on June 23, 2016
Monica Lay
Senior Product Marketing Manager,
Adobe Media Optimizer
Adobe
Interview conducted on June 30, 2016
Noah Mallin
Head of Social, North America
MEC
Interview conducted on June 22, 2016
Tiffany Miller
Product Strategy Leader, Social Advertising
Kenshoo
Interview conducted on June 30, 2016
Mike Mothner
Founder and CEO
Wpromote
Interview conducted on July 17, 2016
Rory O’Flaherty
Senior Director, Media Services
Merkle
Interview conducted on July 1, 2016
Sean O’Neal
President
Adaptly
Interview conducted on June 22, 2016
Victor Pineiro
Vice President, Social Media Integration
Big Spaceship
Interview conducted on June 23, 2016
Tom Stocky
Vice President, Search
Facebook
Interview conducted on July 11, 2016
SanjayTeckchandani
Director, Paid Social
Elite SEM
Interview conducted on June 27, 2016
20. SEARCH AND SOCIAL PLATFORMS: HOW FACEBOOK AND OTHERS CAN STEAL DOLLARS FROM SEARCH ©2016 EMARKETER INC. ALL RIGHTS RESERVED 20
RELATED EMARKETER REPORTS
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Data
The US Auto Industry 2016: Digital Ad Spending
Forecast andTrends
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RELATED LINKS
AdGooroo
Alphabet
Campaigner
Catalyst
ClickZ Intelligence
Content Marketing Institute (CMI)
Demand Metric
Deutsche Bank
Direct Marketing Association (DMA)
Econsultancy
Experian Marketing Services
Facebook
Forrester Consulting
GfK
HubSpot
IgnitionOne
Interactive Advertising Bureau
Kenshoo
Lionbridge
Merkle
Mixpo
Nanigans
Nomura Securities
Salesforce
Search Optics
Street Fight
Winterberry Group
ZenithOptimedia
EDITORIAL AND
PRODUCTION CONTRIBUTORS
Cliff Annicelli Managing Editor, Reports
Michael Balletti Copy Editor
Joanne DiCamillo Senior Production Artist
Dana Hill Director of Production
Stephanie Meyer Senior Production Artist
Kris Oser Deputy Editorial Director
Heather Price Senior Copy Editor
John Rambow Executive Editor, Reports
Allie Smith Director of Charts
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