Facebook failed to beat earnings estimates in Q1 2015, revenues of $3.54 billion fell short of its $3.56 billion estimate. While Facebook blames fluctuating foreign exchange figures, including the weakening euro versus the dollar, for the missed revenue but at the same time it is working aggressively to increase its ad revenues. The recent IBM-Facebook deal could be one of them which intends to make campaigns more personal with the right message, delivered at just the right moment.
According to the deal, customers will now be able to buy Facebook ads with combined data from Facebook and IBM’s Marketing Cloud (the latter includes things like weather, location and previous purchase history). It also said those customers can take campaigns that work on Facebook and replicate them elsewhere.
In simple terms, the initial focus of the alliance is on combining data: it makes Facebook’s Custom Audience insights available to brands that use IBM’s Marketing Cloud to manage campaigns.
So for example an athletic apparel retailer interested in promoting shoes to long-distance runners could use Facebook’s segment metrics along with location-specific information—such as local weather patterns or whether a person is physically near a store—to identify potential targets. Those metrics can then be evaluated against a marketing team’s own proprietary data, such as the date that a specific prospect bought new shoes, how many times that person has visited its website, or even how many times he or she has called customer service.
“For us, having better, more relevant ads for consumers is very, very important,” said Blake Chandlee, vice president of partnerships for Facebook.
However, there is already a sizable ecosystem of companies tapping into Facebook’s ad capabilities. When asked by TC how this partnership is different, Jay Henderson, director for IBM Commerce, pointed out that Facebook is the first company to join IBM’s THINKLab, where team members from IBM and Facebook can work with advertisers to create campaigns with a focus on personalized customer experiences: “No other company is doing this with Facebook today.”
Online advertisers have long used browser cookies—small chunks of data stored on users’ computers—to create ads that “follow” users around on the web. But by tying Facebook’s advertising platform directly into its own, IBM hopes to make these ad campaigns easier to create and more effective. The objective is to deliver more relevant, more personalized experiences informed Jay.
Right now the 103 year old tech giant IBM is in the midst of a major and painful transition as customers have stopped buying software and have moved to the cloud. The company’s revenues in its traditional businesses have been shrinking and it’s trying to ramp up competitive cloud products as fast it can.
IBM’s CEO Ginni Rometty is also re-adjusting IBM in the era of mobile devices, social media, and cloud computing with huge new partnerships. It has invested $1 billion into a cloud version of its Jeopardy winning artificial intelligence platform Watson, inked a deal with Twitter to bring its mountain of data into Watson, and partnered with both Apple and Japan’s postal service to build mobile services for senior citizens.
Today’s announcement fits into that strategy, but it doesn’t involve Watson. Instead, it’s a deal with IBM Commerce, a division of IBM that offers analytics and marketing tools and services to more than 35,000 customers. “This is the beginning of a very broad partnership with IBM,” Jay said. “We’ll be collaborating quite a bit moving forward.”