The Marin Customer Spotlight series profiles industry leaders and provides an informed perspective on current topics and trends. Last week, Jeff Ferguson, CEO at Fang Digital Marketing, sat down with us (virtually) to discuss the state of Facebook advertising and the future it holds for online marketers.
Marin: What are your thoughts on Facebook’s recent announcement around their new targeting options (email lists, etc.) using Custom Audiences? How effective do you think this will be in engaging and converting more Facebook users? How do you see businesses using this functionality?
Jeff: I think this is an immensely powerful tool for Facebook advertisers. The ability to reach out to your existing prospect or customer based on another marketing channel, especially one that is designed for social interactions like Facebook, will allow marketers to increase conversion retention, and share of requirements (repeat purchases).
Although one of the examples that Facebook provides for this type of tool, which is running a campaign to get more likes, would usually be seen as a waste in and of itself, in this instance, since you’re trying to get likes from prospects or existing customers, the value of those likes would actually be of some worth. Once that interested audience is within your circle of conversation, you can continue that conversation to close the deal or get them coming back for more.
Marin: Facebook continues to explore additional revenue opportunities – with new audience options, ad types and device targeting – to promote more advertising spend.
Jeff: First and foremost, I know that Facebook is in the business to make money – period. Discussions around how that they should limit their attempts to create revenue for their company and their investors are just not based in reality.
That said, I give major praise to Facebook for not only trying to find the proper balance of revenue generation and user comfort, but doing such without the fear of failing. Unlike many businesses who seem to get stuck in a single design, a single ad format, etc. because it’s working (or worse, “always worked before), Facebook is putting it all out there to find that perfect match of making money, making its customers, that is the advertisers, happy and keeping its users from feeling they are just the vehicle for making Zuck richer.
Jeff: Facebook is still an evolving animal, especially when it comes to its interfaces for its advertisers. Facebook ads were clearly designed with a single, self-serve attitude in mind, which was fine for the smaller advertisers they had when they started, but it’s time for them to grow up and make that interface work for the Enterprise and the Agency. Marin Software allows that type of access for management of bids, ad testing, and much more, and all within the same interface where we manage our paid search campaigns.
Marin: With news feed ads receiving more attention, most recently with the introduction of Facebook’s mobile ad placement, how have you seen advertisers capitalizing on this opportunity and how have you seen users respond? Is there a compromise that needs to be made as more ads are delivered in a limited mobile landscape?
Jeff: I have seen advertisers capitalize on the mobile front, but it’s mostly early adopters. There is a tremendous opportunity on this front for a variety of brands, products, and services, to start that conversation with Facebook’s most active segment, but as usual, it’s usually the little guys and the agencies themselves who put it out there first to see how it could work.
I don’t think there needs to be a compromise as much as a balance, and there is a difference there. The balance should be based on testing both the advertiser’s ability to get their message across to an audience and that audience’s ability to use the product in such a way that keeps them coming back again and again.
A couple of months ago we announced the capability within Marin Software to target Facebook ads to either the right-hand channel or the News Feed—and you can further target either the News Feed on desktop or mobile devices. Along with this functionality come more granular campaign controls and some interesting performance statistics for each placement type.
Among advertisers on Marin Software, we have seen higher click-through rates (CTR) for ads served on the mobile News Feed versus desktop ads. TBG Digital, a global marketing and technology company specializing in Facebook advertising and social media, is seeing similar results. They just released their Global Facebook Advertising Report for the third quarter of 2012 highlighting the following metrics:
“. . .this quarter sees Mobile News Feed ads receiving CTRs almost 23 times that of ‘Desktop News Feed + Right Hand Side’ ads (1.290% versus 0.057%). Targeting Desktop and Mobile News Feed together fares even better with a CTR of 1.468%.”
However, even with the higher CTR for mobile News Feed ads, Marin continues to observe higher costs per click (CPC) for ads targeting mobile News Feed versus ads targeting mobile and desktop News Feed. This appears to be a result of the limited advertising space on mobile devices, which limits the number of impressions for mobile News Feed ads. We’ll likely see these trends continue to fluctuate as this feature has only been live for a few months.
Who knows, Facebook may even break out mobile into Smartphone and Tablet devices in the future to further refine placement targeting. In any event, we’ll continue to track these performance statistics to see how the market plays out as more advertisers adopt these different targeting options.
Defining Ad Blindness and Ad Fatigue
Facebook ads are delivered more frequently now across what are becoming smaller target audience segments. As a result, when your ads go unchanged, your Facebook audience begins ignoring your ads and at a very rapid rate. They become “blind” to the constant barrage of a static visual input. This ad blindness is further compounded by Facebook’s preference to deliver ads that are expected to perform well from a click-through-rate (CTR) perspective. As your ads’ CTR drop due to ad blindness, Facebook lets them participate in fewer auctions, and as a result, your overall impression volume drops. This is what’s known as ad fatigue.
To combat ad blindness and ad fatigue, Facebook advertisers need to generate engaging ads, monitor click metrics and continuously test and rotate new ads. Leverage these three best practices as you optimize your Facebook ads and, with the right tools in place, they’ll go a long way towards making Facebook ads deliver profitable returns for your business.
1. Generate Engaging Ads
With all the social content on Facebook today and because a single ad can be served to the same user multiple times a day, it doesn’t take very long for ad blindness to set in. Your ads need to stand out and quickly engage your audience’s attention. Unique value propositions, differentiations and calls to action are all important to your ad copy. However, it’s the images you select that can be the difference between the onset of ad blindness and a click-through.
The most successful Facebook ads utilize engaging and colorful images. Adding a red, yellow or orange border to your images creates contrast against Facebook’s blue and white interface, and is an effective way to draw attention to your ads. Keep in mind that many successful Facebook ads aren’t the most aesthetically pleasing; rather they do a great job of grabbing attention and engaging your audience. These images can range from happy people and easily identifiable logos to plain text overlaid on a colorful gradient background.
2. Continuously Test and Rotate
With all the images available at your disposal, continuously testing a variety of ads to the same audience can help you hone in on the most impactful image for a particular message and audience segment. Keep in mind that even a “perfect” Facebook ad is vulnerable to ad blindness and ad fatigue. When optimizing, the goal shouldn’t be to find the best performing ad; rather it should be to find the type of ad that performs the best. This is only possible if you’re always testing, rotating and measuring the performance of new ads.
3. Monitor Click Metrics
In order to proactively combat ad blindness and ad fatigue rotate ads on a regular basis, but also focus on decreases in impressions, clicks and CTR. These three metrics can expose ads that might begin to suffer from ad blindness (decreases in clicks or CTR) or are already suffering from ad fatigue (decreases in impressions).
Set up automated reports and alerts across all of your active Facebook ads to warn you of large decreases in impressions, clicks or CTR. For example, if an ad experiences a 30% decrease in impressions per day after three days of going live, it’s time to rotate in a new ad. If impressions have remained consistent over the last three days, but CTR has dropped 15% each day, consider generating a new ad. Enterprise-class solutions, like Marin Software, can dynamically rotate images, headlines and body text when impressions, clicks and CTR drop below custom thresholds.
As a follow up to our blog post in June, I’m excited to announce that mobile-only ad targeting for Facebook is now available in Marin Software. Marketers now have the option to use placement targeting to position their Facebook ads either on the right-hand side of the page or within a user’s news feed. This enhancement not only provides you with greater control over where ads appear on a Facebook page but also allows you to specifically target mobile users with Sponsored Stories.
A recent study showed that users spend more time on Facebook Mobile than on the Facebook website; it would behoove marketers to begin focusing more of their online advertising dollars towards this growing mobile audience. Marin has built out this feature support understanding the inevitable shifts in Facebook advertising spend and the ways marketers manage their campaigns. We hope you find this new functionality beneficial to your Facebook program.
Many Facebook advertisers leverage apps as a means to engage and eventually convert fans, or friends of fans, of their product or service. Unfortunately, the segmentation and targeting of users based on their level of engagement with apps currently falls short of what advertisers require to make the most of their ad spend. Facebook’s beta targeting feature, Action Spec, looks to meet this requirement.
Before we can explore how Action Spec will change the way advertisers manage their Facebook advertising program, we need to understand what Action Spec is and how it works with Facebook’s Open Graph. By now, Facebook users and advertisers are well acquainted with the capability to “Friend” another user or “Like” a status update. This principle functionality has historically been managed by Facebook via their social graph—the users and their connections to everything they care about. In 2010, Facebook introduced Open Graph, an extension of social graph, to include third-party websites and pages that users liked or shared. In short, Open Graph represents the things that users cared about outside of Facebook.
Today, Open Graph includes arbitrary actions and objects created by third-party apps. Actions are verbs that users perform in an app. Objects define nouns or subjects that the actions apply to. Imagine Facebook users being able to “Submit” a “Form” or “Complete” a “Survey” as part of their engagement with a Facebook app. As users “Submit” and “Complete” their way through the in-app conversion funnel, these actions are displayed on Timelines, News Feeds and Tickers, allowing the app to deeply integrate itself into the user’s experience and his or her friends’ experiences on Facebook.
Once an app has defined its actions and objects on the Open Graph, advertisers will be able to leverage Facebook’s Action Spec. The Action Spec, which is currently in beta, will be available in Marin Software via the Facebook API and provide access to the Open Graph. This query-based language will allow advertisers to target ads at users who perform a specific action on an object within an app. For instance, if Marin Software is interested in driving additional conversions via our Facebook app, using an Action Spec, we would be able to create and target Sponsored Stories towards users or the friends of users who have “Submitted” a “Form”, “Completed” a “Survey”, or both.
By defining brand specific actions and objects through Open Graph, advertisers are able to increase app- and ad-relevance, improving their engagement level with Facebook users. Furthermore, based on user engagement with these actions, Action Spec delivers unparalleled control over the target audience these ads are displayed to. Together, these targeting features enable Facebook advertisers to make smarter decisions for maximizing their business goals.
Support for Action Spec within Marin is expected to release in the near future. For more information on defining and using Action Specs, click here.
Marin Software released data this week highlighting the recent gains in social ad adoption by Facebook advertisers. New ad formats, such as Sponsored Stories, leverage word-of-mouth recommendations to bring social context to traditional ad creative. These highly relevant social ads are becoming a more effective way for Facebook advertisers to reach and engage their target audience. Some of the key data include:
These year-over-year increases point towards a strong advertiser adoption rate. The relevant nature of social ads, coupled with strong CTRs, has caused a shift in advertising budgets from traditional ads to social ads. With the increasing adoption rate, competition amongst advertisers has resulted in increasing CPCs. Given current trends, Marin predicts that Facebook advertisers will allocate 50% of their budget towards social ad formats by the end of 2012. This would mark a significant jump from the current 23%.
For advance tips and best practices on implementing and managing Facebook ads, click here.
Facebook sponsored stories typically provide a significant boost to click through rates and conversion rates. The reason behind this is that the ads introduce social context within them. The social context makes the ads more relevant, yielding more favorable metrics. But how can an advertiser take advantage of sponsored stories? There are several different types of sponsored stories and they may not all fit with an advertiser’s business model. Below is a snapshot of a few of the most popular sponsored stories and some guidance on which sponsored stories would be the most helpful for the various business models.
To set up domain sponsored stories, the advertiser needs to place a small piece of HTML on their website which appears as the Facebook “like” button. When a user comes to their page, while logged into Facebook, and clicks “like” a story is created stating John Doe likes MarinSoftware.com. A click on this ad would send the user to MarinSoftware.com.
Domain sponsored stories require the most work to set up, but they are a valuable targeting asset for lead generation advertisers that would like to drive users to their domain instead of a Facebook page. This is the only sponsored story that will allow the user to be driven away from a Facebook URL. In the end, it’s Social Context plus the ability to drive the user offsite. This is a huge win for lead generation and retail advertisers.
Page like stories are created when a user clicks “like” on a business’s Facebook Page. After clicking “like” a sponsored story can be created stating “John Doe” likes Marin Software. A click on this ad would send the user to the Marin Software Facebook Page.
This is great for brand advertisers that want to increase their Facebook page likes. The key advantage here is that the advertiser can target users who have friends that like their Facebook fan page. In this sense, the targeting is more valuable than the “friends of connections” product because the ad is targeting friends of the user that clicked like AND they are showing an advertisement with social context. If my friend, John Doe, likes Marin Software I might like it too.
Page Post stories are created when a user navigates to a Facebook advertiser page and posts a comment on the wall. This creates a story that shows the post on the advertiser’s Facebook wall. For example, if I post “I love the new shirts” on the Macy’s Facebook page that comment could then be used within an ad.
For a little while, this was a dangerous feature to use because a user could potentially post negative feedback on the advertiser’s Facebook page. Using sponsored stories in this case would then broadcast that negative feedback. Recently, Facebook has changed this functionality so that the user can identify which story they want to broadcast for the advertisement. Social context is no longer required to run a page post ad. Essentially, this ad is able to take the business’ most favorable feedback and broadcast it. This could work for both branding or to sell an individual product through the FB platform.
Check-in stories are created when a user checks-in at a store that you have claimed as yours. For example, if I were shopping at Macy’s in Union Square and I decide to check-in, Macy’s would be able to use that check in for a sponsored ad. The sponsored ad would state “Michael Poynter checked in at Macy’s - Union Square”. Clicking on this ad would take the user to the Macy’s Union Square Place Page.
This is the type of ad that goes full circle to the point of offline sale. These are much more difficult to track and the volume will likely be low, but the ads can be an effective sales tool for large businesses.
As the Facebook Ads platform is still relatively new, a standard method of performing Multi-Variate Testing is virtually non-existent. This in turn, can make it a daunting task for the advertiser to develop and theorize the best way to conduct a fair test between different ad variations. The method outlined below helps advertisers set up this type of testing.
Frequency Capping will always be an issue when advertising on Facebook. Facebook Frequency Capping ensures that the same creative does not get overexposed to a user. However, this is a pain point for the advertiser that wants to try multi-variate testing. Facebook stops showing an ad after it means a certain threshold, in turn the advertiser loses the crucial volume needed for the test. The best way to work around Facebook’s Frequency Capping is to properly set up the testing. This will ensure an easy and clean test where you will receive the maximum data possible before your ads fall victim to “staleness.”