Blog #5: Facebook and the quest for meaningful ad metrics

Facebook has built one of the largest technology companies by connecting people across the world, but more impressively they have monetized this customer base by selling ads. In 2017, Facebook had $39,942 million in advertising revenue. So what value is Facebook providing its advertisers that is worth almost $40 billion dollars? Part of the answer would be page views and hopefully some conversions, but arguably, the main source of value would be Facebook's data - ad metrics. However, advertisers struggle with deciphering ad metrics and to make matters worse Facebook's ad metrics has had issues.

Luckily, according to a recent TechCrunch article, Facebook is looking to update its ad metrics and provide advertisers more clarity on how to measure their spend. Facebook has acknowledged that its ad metrics has had issues in the past. Recently, a group of researchers found that Facebook's reported reach was greater than the US Census population in every state. The main update Facebook will implement is to update how ad metrics will be labelled- they will now explicitly point out estimates and figures that are in development. Facebook will also reduce the number of metrics particularly outdated or redundant fields.

So why are these changes important?  Ad data helps advertisers by:

• Context - they provide insights on where/how customers are viewing ads
• Behavior - they allow advertisers to direct ads to customers based on their interests and behaviors
• Personal Identity - they allow identification of various customer segments (i.e. demographics, psychographics, etc.)

Advertisers need data to help meet their goals and Facebook recognizes that.

Source: https://techcrunch.com/2018/02/22/facebook-ad-metrics/