Meta rumored to develop ‘Basic Ads’ in response to recent privacy changes
The Basic ads may work for brand advertisers but not so well for any companies that need granular targeting and lead generation.
Meta Platforms’ Facebook is reportedly in the early stages of planning a Basic Ads product. Basic Ads would be aimed at advertisers who are looking to build awareness around their brands.
What are Basic Ads? A Basic Ads product would offer and report only the simplest metrics such as engagement and video views.
With the release of iOS14 in 2020, and the option for users to opt-out to having their data collected, Facebook advertisers are having a more difficult time reporting on performance.
The initial response. Since Meta hasn’t officially announced the new product, little has been said about it in the advertising community. But Facebook veteran Curt Maly of Black Box Social Media, who is aware of Meta’s plans, said it’s interesting to think how a basic product with no targeting and no objectives would be beneficial.
“More than 90% of all the online marketers I know are focused on direct response where efforts can be directly tracked… with this basic ads platform, it appears that tracking will be rather difficult,” Maly said. “Branding and awareness are used by larger companies with deeper pockets, most small businesses can’t compete with a brand who spends money ‘branding,’ small business owners need/want to drive results now.”
He added that brand new online advertisers and ad vets flock to Facebook to see fast results from targeting, conversion objectives and tracking results.
“If these three major goal lines are moved, I think we will be seeing a lot more people flock to Google/YouTube ads, TikTok ads and Apple’s new ad platform,” Maly said. “I mean Apple didn’t update iOS to ‘help protect users.’ Apple collects all the info they block on Facebook, Apple is about to get into the ad platform game once again and this is yet another reason for people to flock to a better ad platform.”
Privacy changes impact on Meta revenue. Meta estimates a $12.8 billion hit to their revenue in 2022 due to the Apple changes. Meta CEO Mark Zuckerberg also reports “unprecedented levels of competition” from new platforms such as TikTok.
In April, Meta laid out a three-tier plan to save its ad business in the wake of Apple’s privacy crackdown. At the time, Meta COO Sheryl Sandberg described the strategy as “doing more with less data.”
Meta’s response. Facebook declined to comment on the new product. There has not been a release date for a rollout, though Business Insider reports testing to start in the EU ahead of the U.S.
Why we care. The Facebook ads platform was previously known for its wide range of targeted audiences and demographic options. As of late, it seems like a lot of advertisers and businesses are moving away from the platform, reporting a decline in performance. Basic Ads could be a good alternative if they’re able to follow GDPR regulations while still providing useful targeting options.
Basic Ads may work well for household names such as Nike or Netflix whose goals are engagement and awareness. But smaller businesses that rely on more granular targeting and lead generation, such as courses for business owners, or youth soccer camp registrations, may have a more difficult time and may abandon Facebook for good.