Facebook chief executive officer Mark Zuckerberg recently announced in the third quarter earnings call that he would be spending $10 to $12 billion next year, a significant portion of which would go toward developing the company’s new advertising platform Atlas. In the third quarter earnings report, Facebook reported that it generated two-thirds of its $3 billion in advertising revenue from mobile, reported Forbes. The company has been increasingly working on ways to monetize its site. Advertising revenue has been the main focus over the last year.
Atlas will work with all apps to track purchase information
Atlas is meant to work in conjunction with all of Facebook’s apps – core apps as well as apps from acquisitions. Atlas will function horizontally with Newsfeed and Mobile as well as Messenger, Instagram and WhatsApp, reported ValueWalk.
Facebook competes with Google over advertising
Currently, Google dominates online advertising. Atlas is meant to compete with Google in conquering more advertising market share. Using data from Nielsen and Datalogix, Atlas will be able to track performance of Facebook ads and compare it to the effectiveness of ads on competitor sites. Currently, Facebook users may see an ad in their news feed, but go to the retailer’s website to complete the purchase. Atlas will monitor purchases after an ad is viewed in order to get credit for any sales that originated on its site. Analysts predict that next year advertising revenue for Facebook could be as much as $17 billion, up from $12 billion in 2014, reported Forbes.
Atlas is meant to show online merchants and retailers that Facebook’s placement of ads in news feeds does deliver results. Recently this year it has been debated whether advertising on social media really works. It seems that Facebook is trying to prove that it does and Atlas may provide the analytics and purchase tracking information necessary to make that evident. As e-commerce grows, the role of social media advertising has increased. Perhaps Atlas will settle the question once and for all, if social media advertising is effective in generating sales. It is interesting to see what other plans Facebook will implement in order to further monetize its site.Back To Blog