How personal is too personal with out being “creepy”? Personalized advertisements on social media have already surpassed their prime time. Personally, remarking advertisements are so common on my social feeds that I tend to scroll right past them. How can social media adapt to remain a profitable platform for product advertisements? One answer is to enhance the user experience (UX) within the advertisement. No, I do not mean adding a first name before the text of the ad, (i.e. “Susie, this shirt would look great on you!”). In order for social media platforms to continue to grow as a profitable revenue source for brands, they must incorporate interactivity into the UX of the advertisements.
Facebook has not only caught on to the Augmented Reality (AR) trend, but it added a sense of value for brands. In this recent Mashable article, we learned that Facebook is testing AR ads in its newsfeed. Beginning with designer Michael Kors, Facebook has designed an “AR experience [that] allows users to try on a pair of glasses, change the product color, and make a purchase right inside the Facebook app” (Binder). The goal of AR advertisements is to shorten the purchase funnel by creating an enhanced UX and an instant purchase CTA for the consumer.
Although Facebook is not the first social media platform to explore AR features (SnapChat holds first to market), it is the first to be a source of revenue for its advertising clients. A SmartInsights article expresses that Facebook ads (like Google AdWords) have click through rates that can exceed 1%, drive more volume, often have higher intent and ultimately see higher conversion rates (Chaffey). Also, according to the 2018 Augmented and Virtual Reality Survey Report, “two-thirds of respondents expect the AR market to surpass VR in revenue. However, 51% now expect it to happen within three years, whereas only 18% selected that timeframe in 2016.” The expected revenue of AR in combination with the strong click through rates give brands a new opportunity for penetrating the market with their social advertisements.
Facebook plans to continue testing these ads with brands surrounding fashion accessories, cosmetics, furniture, gaming, and entertainment. With Facebook’s recent stock drop, this may be the necessary driving factor to rekindle its relationship with consumers and ultimately build back its stock.
The success of this, however, all depends on the consumer’s acceptance of the ads within their newsfeed. If all goes as planned, all parties will feel positively about the addition. Facebook and advertising brands will see an increase in revenue due to the enhanced UX within the advertisement, generating more purchasing consumers. However, the consumer may also reject the change and feel as if it is invasive to their privacy. If this is the case, Facebook will continue its downward spiral within the social media platform realm.
Binder, Matt. “Facebook Is Testing Augmented Reality Ads in the News Feed.” Mashable, Mashable, 10 July 2018, mashable.com/2018/07/10/facebook-augmented-reality-ar-ads-in-news-feed/?utm_cid=hp-h-2.
Chaffey, Dave. “Average Display Advertising Clickthrough Rates.” Smart Insights, Smart Insights, 14 May 2018, www.smartinsights.com/internet-advertising/internet-advertising-analytics/display-advertising-clickthrough-rates/.
Cherney, Max A. “Facebook Stock Drops Roughly 20%, Loses $120 Billion in Value after Warning That Revenue Growth Will Take a Hit.” MarketWatch, MarketWatch, 26 July 2018, www.marketwatch.com/story/facebook-stock-crushed-after-revenue-user-growth-miss-2018-07-25.
Coie, Perkins. “2018 Augmented Reality and Virtual Reality Survey Report.” 2018 Augmented Reality and Virtual Reality Survey Report, PerkinsCoie, 2018, www.perkinscoie.com/images/content/1/8/v2/187785/2018-VR-AR-Survey-Digital.pdf.
Matney, Lucas. “Third-Party AR Lenses Will Appear in Snapchat’s Main Carousel Soon.” TechCrunch, TechCrunch, 12 Mar. 2018, techcrunch.com/2018/03/12/first-third-party-ar-creations-from-snapchats-lens-studio-will-appear-in-app-carousel-soon/.