Well, Mark Zuckerberg spent most of Facebook’s Wednesday earnings calls that outlining the company’s e-commerce strategy, which will be crucial to how the social media company grew its ad business in the wake of one of the biggest changes to mobile ad targeting.
Moreover, the company’s most popular e-commerce offering currently is Marketplace where the users can avail themselves and also sold goods from one to another directly through Facebook. However, Zuckerberg highlighted that the Marketplace now counts more than 1 billion monthly users.
Now, Mark Zuckerberg also spoke about the Facebook Shops and Instagram Shops, two features are launched in the last year where the brands can upload their catalogs and sell off their products directly on the social networks. However, he also alluded to Creator shops. The feature which he had announced earlier this week will permit the Instagram creator for enabling e-commerce on their profiles.
Zuckerberg’s comments on Wednesday were his first to analysts since Apple on Monday launched iOS 14.5, an update to the iPhone and iPad operating systems that will allow users in picking which apps are allowed to track their activities on their devices.
For Facebook, tracking user activity has been critical to calculating how effective personalized ads are. The company now relied on a metric known as view-through conversions, which measures how many users saw an ad but did not immediately click on it, then later completed a purchase associated with that ad.
But Apple’s change generates uncertainty. Nobody knows how many iPhone users will permit the social media company to retain following their activity beyond Facebook.
That’s where these e-commerce products come in. If Facebook is capable of selling more products through its own apps, it’s not so dependent on cross-site user tracking.
An advertiser can pay for running an ad for a product, like sneakers, to Instagram users who track creators whose content is engrossed on sneakers. A worker might click on the ad and be taken to the brand’s Instagram Shop, where they could make the payment for the marketed sneakers directly within the Facebook-owned app.
In such a scenario, the advertiser reaches their envisioned target, the user buys the item unswervingly on Instagram, and Facebook is able to continue to prove the efficiency of its ads.
Facebook is not getting into commerce because it wants to contest with the likes of Amazon or Walmart. In most cases, Facebook only charges a 5% fee that covers things like taxes and payment processing. The point isn’t to make money from sales but from advertisements that endorsing those products.
Certainly, although Facebook has squeaked and moaned for months about Apple’s iOS 14.5 changes, CFO David Wehner on Wednesday told analysts “the impact on our own business we think will be manageable.”
Investors appear to be buying that claim. The market sent the Facebook stock up more than 6% after hours after the company shattered potentials on revenue and earnings. This news is as per the update from CNBC.