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Facebook Inc (FB) & International Business Machines Corp. (IBM) Join Forces to Develop Marketing Solutions

Facebook Inc (NASDAQ:FB) and International Business Machines Corp. (NYSE:IBM) have entered into a partnership to develop enhanced marketing solutions. The Facebook-IBM Commerce collaboration is intended to develop people-based marketing solutions that would also maximize the value for brands.

Marketers and brand managers will be able to leverage Facebook’s customer insights from its rich user base and Custom Audience (an ad targeting feature) along with IBM’s marketing cloud and analytics capabilities to offer more personalized and targeted advertisements for users. Furthermore, the combined capabilities of Facebook and IBM will allow brands to strategically select users that are more likely to respond to advertisements thereby allowing them to communicate more effectively.

Additionally, brands can benefit from IBM’s Journey Designer offering that is designed to enhance customer engagement while adding value to user experience. Journey Designer is complemented by Journey Analytics in order to draw deeper insights from customer response. All in all, the two companies have come together to allow brands to create improved and responsive ads that will provide value to their customers.

Most importantly, Facebook will be the first company to be a part of IBM Commerce THINKLab, a novel research and collaboration environment that allows companies and brands  to come together for the development of advanced technologies for offering more customized user experiences. THINKLab will serve as a platform for bringing people from different domains like researchers, social media experts, designers as well as other professionals under one roof.

The advertisement industry is evolving with more and more retailers and companies moving to social media platforms to market their offerings. Advancement of technology and increasing adoption of social media across the world have given brands a platform to reach customers directly and improvise their offerings according to the latter’s requirements. This is a win-win strategy for both the brands and their customers. While customers will have a personalized experience, brands will benefit from increased loyalty and brand value.

According to research firm, eMarketer, social network ad spending is expected to reach $35.98 billion by 2017 that is 16% of global digital ad spending.

So it is no wonder that most of the social media companies are vying to pull more ad dollars to their platform. In fact, last year, IBM had partnered Twitter Inc (NYSE:TWTR) in order to integrate the micro-blogging site’s data into its own products for predicting market trends for its clients.

We believe that the aforementioned collaboration is a positive for both Facebook and IBM. Of late, Facebook has been putting in a lot of effort to improve the quality of its advertisements. This initiative, it seems, is in perfect alignment with the company’s growth plans.  IBM, on the other hand, has been investing in higher growth markets like cloud computing, Big Data, mobile etc. This collaboration is a positive for the company as it furthers its plans to emerge as a key provider of advanced technological solutions.

Both IBM and Facebook carry a Zacks Rank #3 (Hold). A better-ranked stock that may be considered is Lightinthebox Holding Co Ltd-ADR (NYSE:LITB) having a Zacks Rank #2 (Buy).

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