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March 7, 2017

In 2004, Mark Zuckerberg unleashed the beast that is Facebook from his Harvard dorm room. Today, Facebook has over 1.8 billion monthly active users and millions of businesses on the platform. With this incredible scale, Facebook has found itself in the position of being the dominant player in connecting people to businesses via advertising campaigns.

When comparing Facebook to more traditional advertising channels, its strengths are immediately clear: Facebook is cheap to advertise on, provides a wide array of creative types, allows for A/B testing on audiences and creatives, contains advanced targeting techniques, and has an incredible reach that defies geographical borders.

While Facebook now reigns as a king of advertising, it has undergone several major changes along the way. How did it get here, and overcome innumerable obstacles along the way? Let’s take a look…

Here is a timeline illustrating some milestones leading to Facebook’s massive success as an ad platform:


Facebook Begins Its Ad Takeover: 2004 – 2006

Facebook has profited off the idea of selling ads since its inception. When Facebook only functioned as a way to connect college students, it sold Flyers (essentially ad slots) to students promoting parties or other campus activities for a small price. Advertising proved Facebook’s primary source of revenue and kept the company afloat even in its earliest days.

When Facebook first attempted to sell ad space, it had 70,000 total users (55% from Ivy-League schools and the remaining 45% from other schools) and it sold itself on the immense amount of purchasing power college students held.

With its limited reach, Facebook also could only target on a narrow scope. However, this was revolutionary compared to the targeting abilities of traditional media such as print or television. For example, advertisers could target by college, degree type, courses taken, class year, age, gender, dorm, personal interests and other parameters relevant to the segmentation of college students.

During this end of this time frame, Microsoft became the exclusive provider of all Facebook advertising, this includes banner ads and sponsored links.


Facebook Begins Ramping Up: 2007 – 2009

During these years, Facebook went through a few major changes. For one, the application is now available on mobile, something that will add fuel to the fire in coming years. Then next, businesses are able to create pages to promote themselves on the platform through buying advertisements. This will prove to be a significant step in Facebook’s evolution to become more business-friendly.

With businesses beginning to advertise on Facebook, Facebook unleashes a first edition of its audience targeting tool and ads manager. Now, businesses can use targeting to reach their preferred audience and navigate Facebook ads on their own with a self-service offering.


Facebook Tightens Its Grip in The Mobile Ad Space: 2010 – 2013

Facebook now introduces its mobile app, which allows users to access the service even more readily before. With this will come the introduction of mobile ads, a robust addition to Facebook’s ad tool. These ads appear natively within the News Feed to avoid clutter and noise (another huge milestone for FB ads).

Mobile ad revenue saw exponential growth from its beginning in 2012 and by 2016, mobile contributes 84% of total ad revenue. By concentrating on a mobile-first basis early on, Facebook sets the standard for mobile initiatives.

The importance of this time cannot be underestimated. Facebook was able to not only weather, but actually excel, through a seismic shift in consumer behavior from web to mobile.

Facebook’s new “Social Graph” and cookie-based targeting allow marketers to find potential customers. This gave way to Custom Audiences, a feature enabling marketers to penetrate specific ads to a relevant audience, as well as Lookalike Audiences (people who share characteristics with your Custom Audience). This is where Facebook started fine-tuning its targeting and became a threat to traditional forms of advertising.

In addition to Facebook’s tools for creating audiences, now advertisers can sync their existing customer information to Facebook to increase data and better target custom audiences.


Facebook Continues to Control the Market: 2014 – 2017

This is where Facebook starts refining their existing ad platform. Sponsored stories are completely removed from Facebook as it continues to streamline content and better target audiences. Ads start to blend into organic content as the platform matures.

New features such as carousel ads, lead ads, group ads, and countless others are now available to advertisers. With a wider array of tools, advertisers now have a diversified approach on the platform.

Facebook also rolls out Facebook Audience Network, or FAN. FAN enables advertisers to expand its campaign’s reach to other mobile apps. It signals Facebook trying to host ads beyond its own site and apps. In face, Facebook claimed FAN the “second-biggest mobile-ad network and the biggest native-ad network” with $1 billion in revenue.

With Facebook ads holding strong, Facebook also unleashes Instagram ads during this time frame, which allows advertisers another unique platform to use in targeting audiences and testing creative.


Our Predictions for 2017 and Beyond

We don’t know exactly what Facebook will roll out in coming months or years, but we predict it will include these four themes:

  1. Focus on locality: Our timeline shows as Facebook ads progress, audience targeting becomes more granular. In becoming the best platform for creating and targeting audiences, we predict that Facebook will zoom in on local targeting tactics.
  2. Increased automation: Using bots to chat with potential customers will allow businesses to increase communication without fatiguing employees. This will allow brands to gather more information about who their leads are/what questions they have and target their advertising accordingly.
  3. A “Shop Now” feature: With many people consulting Facebook for new products and trends, we think it will be natural for a “Shop Now” CTA to be featured. This will take Facebook advertising from just a place of consideration to a place of purchase.
  4. Going Live: With Facebook rolling out its live stream feature, we predict live advertising won’t be far behind. This will enable brands to engage with their audience in a unique and real way. In fact, Facebook has already started testing real-time advertising. This article on Digiday explains how Facebook is making efforts for brands and publishers to start going live with their campaigns.

Interested in taking your Facebook ad strategy to the next level? Learn more about Bamboo’s Facebook advertising expertise and services >

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