In the aftermath of the New York City Advertising Week conference held last week, Deutsche Bank writes For the first time in a long while, it picked up cautious comments from a major internet ad contact around Facebook trends.
As DB analyst Lloyd Walmsley writes, he meet with a large social-focused advertising software company and learned that despite strong ROAS (return on advertising spend) continuing on the platform, marketers are increasingly hesitant to deploy incremental dollars on core Facebook.
The good news is that incremental ad dollars shifting away from core Facebook is not new, and have largely been flowing to Instagram resulting in little or no impact to Facebook as a whole. However, in an unexpected shift, the bank is now not seeing all the departing core Facebook dollars flow to Instagram.
The other dynamic playing out for Facebook and Instagram is the increased popularity and time spent on “Stories”. Marketers understand that the stories format is the next generation of communication and are consequently pouring money into it. However, while the bank's speaker was upbeat on stories and the long-term potential, measurement remains difficult and may require new forms of measurement to reflect sometimes split-second impressions.
Net-net, according to Deutsche Bank while this is just one industry check (albeit a big one), it has spoken to other performance ad agencies that sound better about recent trends in ad spend on the FB platform. As a result the bank anticipates heightened risk to Street estimates for FB in 3Q, 4Q and 2019, given mixed channel feedback but it is - for now - maintaining its Buy reco and $205 target.