Everyone's heard the one about Facebook going after TV ad dollars. But during last week's quarterly earnings call, Facebook Chairman-CEO Mark Zuckerberg said the company will eventually start to target search dollars as well.
Can Facebook be as good as, or even replace, paid search for some ad objectives? It may sound crazy, but the answer is yes. And the twist is that Facebook doesn't need to have a full-fledged paid search business -- or even be a search engine -- to do it.
Before I go on, I want to be clear that I don't consider Facebook a search property in the way that advertisers think of paid search. Its users don't go there with intent to buy or do something, the way they do when they search on Google, and there's no reason to think that will change much in the future.
But Facebook has managed, through the creation of smart ad products that fulfill similar objectives that paid search does, to start gaining significant business from search advertisers. And there's likely more to come.
Ad products for all stages of the consumer purchase journey
One of the biggest changes in Facebook's ad business in recent years has been its introduction of innovative, lower-funnel ad products that complement ads designed to meet marketers' branding goals. The more Facebook digs into this area, the more options there are for search marketers that have long relied on Google, Bing, Yahoo and other properties.
In particular, Dynamic Ads (which let retailers upload their product catalog and then retarget shoppers on Facebook) have been a strong performer. In fact, on the July 27 earnings call, Facebook COO Sheryl Sandberg called them out, saying they offer marketers "search-like ROI."
Lead Ads, another relatively new ad product, help businesses connect with consumers who want to sign up to learn more about products or services. With this product, search marketers can capture live leads without asking prospects to leave Facebook.
Attribution -- the practice of assigning credit to any advertising- or marketing-driven interaction or other brand-imposed touchpoint -- is a major focus for Facebook.
While attribution is by no means perfect on Facebook, it's certainly getting better. And 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.
Toward this end, Facebook has introduced tools such as Conversion Lift and offline conversion measurement. With Conversion Lift, marketers can compare the lift in conversion when a test group sees a Facebook ad vs. a control group that does not see a Facebook ad. They can also measure the relative conversion among several different Facebook ads. The offline conversion tools enable retailers to measure store visits and in-store sales that result from a Facebook ad campaign.
Priming the market for search ads
With all of this, the big question is whether search ad budgets are moving to Facebook. So far, the answer is no. My conversations with search marketers and agency executives for an upcoming eMarketer report indicate that growth at Facebook is most likely coming from other budgets, such as offline or display. But there's no question that search marketers are increasingly using Facebook ads alongside what they do on search engines.
Facebook's ad business is growing at a faster rate than paid search is. In March 2016, eMarketer forecasted that Facebook's ad revenue would increase 31% this year. Based on the company's second quarter results, that forecast will likely be increased.
This year, eMarketer expects worldwide search ad spending to increase 15.4%, reaching $86.25 billion, with Google accounting for 55.2% of the total.
What's clear is that Facebook is laying groundwork with ad products that search marketers can use in tandem with what they already do on search engines. That way, when Facebook does start offering some form of paid search, marketers will already be primed and ready for it.