Facebook has purchased Microsoft’s advertising platform Atlas for an estimated $100 million. They have purchased the service in order to enhance their own ads and potentially venture out from Facebook and compete against other advertising platforms like Google Adsense. The service will “help advertisers compare their Facebook campaigns to the rest of their ad spending across the web on desktop and mobile” according to Facebook.
Many advertisers on Facebook already use Atlas but by purchasing the service all together they can enhance their built-in user interface and measurement systems. Microsoft’s reasoning for selling the service was that “digital advertising today is not fulfilling its promise. Consumers really don’t want ads per se — they want digital content and experiences that enhance what they’re doing, whether that comes from brands, publishers or peers.”
Consumers really don’t want ads per se
While it is definitely true that online ads are not very effective that doesn’t mean there are not businesses wanting to use them. Think about the return on investment that TV ads have (it is remarkably low) and yet companies pay top-dollar to advertise on TV.
Facebook has begun to expand its ad service tremendously by increasing the usage of side-column ads and inserting sponsored posts throughout news feeds. Microsoft reportedly sold the service to Facebook for less than $100 million despite Microsoft having paid $6 billion for aQuantive which power the service.
This move will likely make a lot of companies happy since advertising measurements on Facebook have been scarce up until this point, but hopefully the addition of Atlas will make ad performance reporting significantly better.