So you want to learn what are Meta Ads? I get asked this question all the time by people I meet. It seems everyone and their mother is advertising online these days. But where do Meta ads fit into this whole online marketing thing anyway?
I’ll be straight with you, when you’re trying to market your business online it’s easy to feel overwhelmed. Google ads, SEO, Meta ads–the list goes on and on. This is especially true in the world of digital marketing, where everything changes faster than you can say “algorithm update”.
With more businesses moving online, what are Meta Ads, and how do they stack up against other advertising solutions? In this article we’re taking a no-fluff, data-driven approach to explore the world of Meta advertising.
The World of Meta Advertising
Meta Ads – essentially, these are advertisements served to users on Facebook, Instagram, Messenger, and even within apps and websites outside of the Meta family. Sounds pretty simple when you put it like that right? And while many small to medium-sized business owners choose to ignore Facebook in particular in this age of ever-more targeted and algorithm-driven advertising solutions, a close look at the data reveals some interesting details about the reach and effectiveness of these Meta platforms.
First of all, did you know that Facebook advertising is a $114 Billion market as of 2021? That kind of staggering financial success speaks for itself. But let’s take a closer look at where all that money is coming from. As an eCommerce entrepreneur, one of the most useful and important data points for me when considering an advertising solution is this; cost-per-click, or how much will this solution end up costing me in order to get people to click through to my website?
Why Are Meta Ads so Popular With Advertisers?
Remember I mentioned how Meta ads also work across different platforms? Well one of those platforms, Facebook in particular, offers the second-cheapest average cost per click compared to the other social networks out there. Considering Facebook continues to be the number one social network with over 2.9 Billion active monthly users (Datareportal.com), you’d be forgiven for wondering if maybe those billions of people had moved on to different platforms to satisfy their online marketing and product discovery needs?
According to Insider Intelligence, although the landscape is changing and marketers are exploring more advanced techniques like journey-based advertising, Meta ads on social media platforms such as Facebook and Instagram still accounted for 75% of advertising spend by U.S.-based marketers.
Clearly, what are Meta ads is still an open question for many eCommerce businesses, and an opportunity to drive significant revenue.
Meta Advertising: A Short History
You might be surprised to find out that what are Meta ads and the platforms these advertisements appear on, are a relatively old concept when compared with some of the relative newcomers such as TikTok.
Believe it or not, what are Meta Ads can actually be traced all the way back to 2004, when in a bid to bolster much-needed funds to get the social media platform off the ground, Facebook founder Mark Zuckerburg offered companies ad space in the form of what were essentially digital “flyers”, in exchange for payment. Talk about humble beginnings.
Fast forward a few short years to 2007, and the official “Facebook Ads” platform was born. What are Meta ads looked like back then? They consisted mostly of individual profiles for companies to promote products or services. These digital ads were also some of the first to cleverly combine what were known back then as “social actions” from friends lists such as positive reviews or recent purchases, as a kind of endorsement of the companies or products advertised. Pretty clever huh?
In typical Zuckerburg fashion, what are Meta Ads became in their present, revenue-generating, data-driven incarnation over a period of several years and included some notable innovations and acquisitions.
But how Do Meta Ads Work Exactly?
In a nutshell, what are Meta ads function based on data relating to online behavior gathered from billions of user profiles and the information those users interact with on a daily basis.
To the casual observer, that may sound like Meta advertising is little more than basic demographics working to serve up relevant products or services to interested users at the right moment, much in the same way that targeted television advertising does.
However, under the hood what are Meta ads and the ways in which those ads work, tell a much different story of a data-collection machine almost unparalleled in human history.
How Meta Ads Collect and Use Data
When it comes to marketing my products or services, what are Meta ads doing differently than traditional marketing solutions like newspapers, radio or even television?
Remember all that personal information you input when you created your Facebook profile what feels like a lifetime ago? Everything from the city you were born, relationship status, favorite movies, even places you’ve worked at or traveled to all neatly organized into a profile just begging to be targeted with…well, targeted advertising.
But it’s not merely personal details harvested from Facebook (and later, Instagram) profiles that made the platform and the advertising opportunities so lucrative. In the beginning at least, one of the most useful pieces of tech at Zuckerburg’s disposal was a tiny snippet of code called a ‘cookie’. You know all those pop-up windows telling you to click “Agree” on various websites asking you to accept cookies on your browser? Well those are a little different now from what Meta was using back in 2004.
Back in the good old days (or should we say the “wild west” of the early internet) there existed a now defunct method for advertisers to exploit called a “third party cookie” which meant whenever a user clicked on a website that had agreed to allow these so-called cookies to gather information from web browser activity, those tiny bits of code would log literally every website visit, every click, and more alarmingly any credit card information or personal data that got input onto website forms.
It wasn’t long before companies began realizing how much money there was to be made by shamelessly exploiting users through the unethical (and often illegal) use of cookies and the personal data they collected.
Scandal, Regulations, and a Shift Away from Cookies
You didn’t think Meta (then known as Facebook of course) was able to gather information this personal and this damaging without consequences did you? Public trust is hard enough to earn and maintain. But add in the ethical implications of using this kind of technology to ruthlessly exploit individuals for profit? Now you’ve got a recipe for disaster.
The first serious cracks in Meta’s armor appeared in the form of several public scandals alleging serious ethical breaches including one of the first cases of election manipulation. In 2018 it was revealed by several whistleblowers that a data-mining company by the name of Cambridge Analytica had used data illegally harvested from millions of users on Facebook, and subsequently used that information to help sway public opinion on elections all over the world, with even one Donald Trump being accused of leveraging this technology to his advantage to secure a shock presidential victory.
The revelation that Cambridge Analytica had exploited personal data gleaned from millions of users’ Facebook profiles caused outrage across the political and online world, prompting lawmakers in California to draft the California Consumer Privacy Act (CCPA). To date, what are Meta ads, and how those ads use user information to serve targeted marketing messages, are now governed by strict privacy regulations all over the world.
But if what are Meta ads and how they work is no longer primarily based around this cookie technology, how does this behemoth of online advertising keep the cash rolling in?
Meta’s Response? Double Down on Data Collection
By now many users were rightfully alarmed about Meta’s aggressive stance on gathering and selling private information for profit, even going as far as adjusting their privacy settings (some 54% of Facebook users) in an effort to safeguard against further breaches. But instead of admitting fault and backing down, Meta seemingly dug their heels in even further.
Although the writing was on the wall for the ethical use of third-party cookies, instead of discontinuing data collection practices, what are Meta ads relies heavily upon took on an even more pervasive form. The introduction of several in-house “solutions” like Facebook Pixel were designed to reassure advertisers that there were workarounds to circumvent the growing mistrust of users wary of online data breaches.
While on the surface, many users probably aren’t aware that Pixel even exists on the websites they interact with on a daily basis (can you say targeted advertising.). If you’re anything like me, when you scroll through an online retail store and maybe leave an item in your shopping cart you’ll undoubtedly have noticed advertising relating to that exact product or brand showing up later as you check your Facebook feed.
Pixel was one of the technologies instrumental in moving advertising away from relying exclusively on user profile data to display targeted advertising. By leveraging the power of server-side data (that’s nerd speak for anything a website collects during a user session), Meta ensured that it remained competitive against rivals Google and Apple.
Programmatic Meta Ads
Remember what we talked about with the rise in regulations and users increasingly reluctant to click through advertising? Well programmatic ads seem to offer a convenient and relatively hands-off approach to online advertising that many advertisers find irresistible.
Programmatic advertising uses artificial intelligence or AI to purchase ad space across networks, and automates the process for displaying the most effective advertisements based on criteria such as budget, reach and demographic targeting.
It may come as a surprise to learn then that a whopping 95% of advertising placed on Meta platforms (mainly on Facebook and Instagram) comes from automated solutions according to industry experts such as Media Radar, of the 17,400 companies that chose to run advertisements through Meta during April of 2021.
The Pros and Cons of Advertising Through Meta in 2024 and Beyond
Despite a bumpy ride these last few years navigating scandal, government intervention and the erosion of public trust when it comes to how user data gets collected and ultimately used for profit, what are Meta Ads continue to provide advertisers of all sizes (particularly smaller businesses without the big advertising budget of multinational companies). But the question remains, what are Meta Ads best used for and when is it worth exploring alternatives?Pros of Advertising on Meta:
Benefit | Description |
---|---|
Massive organic reach | Even without a marketing budget, billions of active monthly users across a wide demographic make for impressive reach compared to the competition. |
Sophisticated audience targeting | Meta gives advertisers control over parameters like age, gender, location, hobbies, purchase history, and even workplace. This means advertising campaigns get in front of potential customers faster. |
Relatively cheap CPC | Compared to advertising options through rival platform Google Ads, Facebook ads remain cheaper on average when it comes to cost-per-click, which remains the number one concern for small to medium sized eCommerce businesses today. |
Improved brand awareness and recognition | Even though less than half of users make changes to their privacy settings after repeated ethical scandals concerning Meta’s use of private data for profit, consumers report much higher rates of positive brand interactions with advertising served on Meta’s social networks such as Facebook and Instagram, than say banner advertising on less familiar third-party websites. |
Cons of Meta Advertising:
Disadvantage | Description |
---|---|
Declining engagement from Meta users | In recent years new apps such as Instagram competitor Threads has seen a 79% drop off in active users. Combine this with younger demographics opting for fresher alternatives such as TikTok, marketers would be smart to pay close attention to how relevant Facebook remains to younger audiences. |
Measuring accurate results is tricky | A/B Testing remains the gold standard when evaluating the success or failure of an advertising campaign on most platforms. Yet the way that Facebook in particular uses it’s advertising solutions (A/B testing on Facebook) has changed considerably with users and experts alike questioning the usefulness of some of these recent developments. |
Damaged reputation in the eyes of consumers | Repeated fines from the European Union, allegations of turning a blind eye to election interference and the questionable sale of private user data for profit means marketers would do well to measure consumer trust and proceed cautiously. |
Limited targeting because of third-party cookies being discontinued | Many seasoned digital marketers I speak to complain about a reduced efficacy when advertising through Facebook. This is primarily because Facebook and Instagram ads once relied heavily on information gleaned through the now infamous ‘Third Party Cookies’. |
For many eCommece companies, however, Facebook advertising continues to be the most effective way to advertise products because what are Meta Ads are constantly evolving with the help of ever more advanced technology. Facebook still accounts for the lion’s share of Meta’s annual revenue (nearly 55% in 2023), making Meta advertising practically indispensible for businesses serious about growth.
With such an enormous amount of active monthly users and powerful data collection technology at its disposal, the sheer volume of data now in Meta’s hands about users represents something truly unique and potentially dangerous if exploited recklessly.
One could argue that with this much insight into what people buy, and how they decide to purchase, that Meta (previously known as Facebook, remember) holds the keys to a level of persuasive influence we’ve seldom witnessed before in our lifetimes.
Conclusion
So, we come back to our initial question; what are Meta Ads in today’s ever-evolving world of marketing solutions? The short answer; a double-edged sword with massive power for driving engagement and ultimately, increased revenue, when utilized properly. What are Meta Ads are in the hands of savvy advertisers who understand the responsibility for protecting user privacy will no doubt continue to play a central role in digital marketing strategies across all demographics and industries for years to come.Want To Talk Strategy?
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