While reporting its quarterly results earlier this year, Facebook had stated to its shareholders that its News Feed is already maxed out with ads and as a result, revenue should slow down meaningfully this year as Facebook figures out where to move next. In a bid to determine what platform could see success at the level of its News Feed, Facebook is seemingly going to be trying ads everywhere.
A new report from Recode claims that Facebook is planning to go stories-mode on ads. That is, just as the social media giant implemented Snapchat’s stories in every single one of its shared family of apps (Facebook, Messenger, Instagram and Whatsapp), it is either currently testing or plans to be testing ads in several of its properties as well. It has already started testing video ads that can be triggered either once or multiple times in the middle of a video and has started ads in Instagram stories. And only recently, it announced a roll out of ads in Messenger platform between chats occupying a fairly large section of the screen.
Perhaps one of the most lucrative platforms for advertising would be Whatsapp with its 1.2 billion user base though with the privacy issues around that app being more sensitive, Facebook has been so far unable to get it working. Its Instagram has been growing rapidly and has added every subsequent 100 million users far quickly than the previous. It now sits at 700 million users with stories at 200 million with a revenue of around $2 billion (2016 figures).
One more place where Facebook could potentially put ads is in Groups or Communities. The ads there could cater to the type of community and its purpose and with Facebook CEO Mark Zuckererg recently making a push for communities at its Chicago event, its not hard to see a scenario where this could play out. Facebook recently announced the 2 billion user milestone and with it being blocked in India and maxing out in the US, there’s only so many more users it can add.
Facebook is following its traditional approach here of moving fast and breaking things and trying all sorts of stuff to see what works and stick to it. It will be interesting to see what emerges as its next cash cow.