Facebook as Leader in Display

Earlier today I tweeted my displeasure over the misleading headlines making the rounds that Facebook accounted for 31% of online display market share. A lot of fellow tweeters agreed or disagreed so I thought I would explain.

First, let me say this is not a disparagement of Facebook or their ad platform. While I was at Nielsen I worked closely with Facebook and there are some interesting studies showing the effectiveness of ads on the platform. 

My objections is twofold:

  1. Facebook isn’t “display” in the sense everyone in the marketplace thinks about display as a meaningful market, so calculating market share doesn’t make sense; and
  2. Using impressions as a proxy for any measure of market success is absurd.

What is Display, or How do we Define the Market

This is the crux of the issue. Is the market for “display” equivalent to the market for “ads that have images”? And if Facebook isn’t display, what is it? 

From the perspective of all the current players in the display market, Facebook is a not part of the ecosystem. You can’t buy or sell ads on Facebook in the same ways as the rest of the market. You generally can’t use the same technology. You can’t use the same creative executions. It’s like we run an ice cream store, and when a new pizza shop opens across the street the press claims “pizza shop now half of calories in market.”

From the perspective of the buyers, there may be some overlap in budgets between Facebook and display, but there’s also tradeoffs in budget between display and search, email, video and every other “market” you might want to evaluate. So if you want to consider market share for “digital media buying” or “all advertising” then fine, go ahead and give Facebook the credit it deserves, but just assuming that all Facebook spending is competing against display is arbitrary and incorrect.

But it has Images!

Yes, Facebook ads generally include images. Does that make it display? Let’s imagine that Google announced tomorrow that for an extra $0.05 CPC they would allow advertisers to include a small image with every AdWords impression. Would all of AdWords suddenly become display? Or what if Facebook changed its mind and decided to not allow images anymore in their ad platform, would they suddenly be in a different market?

Then How Should we Measure Facebook?

There are plenty of very effective ways to measure Facebook’s progress against other media. Here’s a quick list:

But for Pete’s sake, don’t measure total number of impressions or compare to display impressions and pretend it’s meaningful.