A lot of people “Like” Facebook. According to ComScore, the social media behemoth ranked as the top destination on the Internet in December 2012, edging out Google. So, when Facebook announced changes to its News Feed, advertisers took note.
One thing that’s dogged Facebook the last year or so is the stigma that the social site isn’t ideal for performance marketing. While we certainly agree advertising on Facebook leans towards branding and it isn’t quite the performance marketing nirvana like search is on Google or Bing, our data hints at Facebook’s potential. In fact, in Q4 of last year, we saw US Facebook advertising take on search-like performance characteristics.
Today, Zuckerberg and company revealed a new News Feed. Pictures and videos will now not only be displayed more prominently, but rather than a single News Feed, users will be able to filter their News Feed by Friends, Music, Photos, Games and other topics.
It’s all in an effort to provide users “more choice and more control.” As a result, targeting and ad visibility on Facebook has taken a step closer to the performance marketing utopia. There are three critical changes that advertisers should be aware of:
How do you see the new changes to Facebook’s News Feed improving ad performance?
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.
Kudos to Facebook for continuing to innovate. The recent release of Custom Audiences has started to bridge the gap for marketers who’ve been trying to find their “known” customers on Facebook. Having come from a background working in consumer analytics and digital marketing, I am all too familiar with loyalty programs, CRM databases and customer profile segmentation systems.
With the advent of Facebook advertising, the problem has become tying an individual’s information from these systems to his or her respective Facebook profile. Marketers have almost had to start over when it comes to Facebook advertising. Though they have access to and can target basic demographics or behavioral profiles, reaching specific individuals on Facebook has been nearly impossible. This is where Custom(er) Audiences has changed the game.
I keep referring to Custom Audiences as Custom(er) Audiences for this exact reason. Marketers can now target their known customers from other systems of record by tying their customers’ email addresses or phone numbers to their Facebook user profile. By simply uploading these email or phone lists into the Facebook Power Editor, marketers can create custom audience lists.
Now marketers can understand whether customers they may have targeted through email or other offline channels are fans of their page on Facebook – and, if not, target them with highly relevant ads. Furthermore, marketers can create lists for exclusion from Facebook campaigns, which can help to prevent redundancy. While there may still be some tweaks to be made around Custom(er) Audiences (e.g. avoiding competing Facebook advertising campaigns), I think this feature will be invaluable for marketers in terms of aligning their Facebook advertising campaigns with other advertising channels, allowing them to create a seamless customer experience.
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.
Last week, Digital Marketing Depot released the second edition of their Market Intelligence Report. This report examines 10 of the industry leading paid search management platforms and highlights what each is doing to integrate Facebook and other social media advertising into their solutions. To prime the discussion, the report provides an overview of several compelling industry trends, including:
Less than 49% of companies now manage their paid search program in-house using Excel and free publisher tools, this is down from 57% in 2009. Digital Marketing Depot’s annual report seeks to help online marketers make an informed decision when abandoning in-house tools in favor of third-party paid search management platforms. Some interesting trends and highlights of the profiled vendors include:
To round out the discussion, the report highlights 15 questions online marketers should ask potential vendors, stressing that the functionality of each toolset within a solution should be considered closely beyond simple campaign and bid management.
Earlier this week, Facebook announced the ability for direct advertisers and agencies to buy sponsored stories* on mobile devices, exclusively. Prior to this, Facebook controlled whether or not an advertiser’s sponsored story would appear in a user’s news feed for mobile devices. Furthermore, marketers had no choice in when their sponsored stories were shown and no means of segmenting out the performance by desktop and mobile. For those familiar with Google AdWords advertising, this new Facebook functionality is equivalent to desktop and/or mobile device targeting for paid search campaigns.
The sponsored stories targeting options now available through the ads API and Power Editor are:
What does this mean for Facebook and their advertisers? This change certainly provides marketers with more control over their ads and visibility into their data for optimizing campaigns. But to anyone familiar with advertising, this also means more ad revenue for Facebook. Consider these figures: Facebook made $3.2 billion in ad revenue last year, primarily from desktop advertising. And as of December, there were 901 million monthly active users, with 500 million of those being mobile. With the flood gates now open for sponsored stories on mobile devices and the continued growth of monthly active mobile users, it’s clear that Facebook is set to generate hundreds of millions, if not billions, of dollars in revenue from this untapped mobile ad market.
Though this announcement appears to be a win-win for Facebook and their advertisers, it remains unclear as to how mobile users will react to seeing these new ads in their news feeds. As a thought, Facebook may want to consider providing more visibility into the algorithm that influences the ads appearing in a user’s news feed, such as click-through-rate. This algorithm might be similar to Facebook’s existing EdgeRank, which factors Affinity, Weight and Decay into the ranking of social content appearing in news feeds. Developing a transparent and effective metric to promote ad relevancy would benefit marketers and Facebook users in a landscape of dynamically changing content and consumer intent.
Share your thoughts with us on this announcement in the comments section below.
*Sponsored stories allow Facebook advertisers to surface word-of-mouth recommendations about their brand that exists organically in the Facebook News Feed. Sponsored stories are different from ads and can amplify the brand engagement of the target audience. For example, if a person’s friends like a Page, in addition to seeing that news story in their News Feed, they can also see the same story on the right-hand column. Sponsored stories are available for ads that promote a Page, Place, Application or Domain.
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.
Recently, Marin Software conducted a poll of advertisers in
the UK regarding their use of Facebook Ads. Nearly 400 advertisers of various
company sizes across a number of vertical sectors responded to the poll and of
the respondents 6% indicated they have “well developed” ad campaigns up and
running on Facebook. Forty-two percent of respondents said they are
“experimenting” with ad campaigns while the remaining 52% have yet to step foot
on the train, not having run any Facebook ads.
Although the UK is a leader in European
Facebook adoption, advertising on Facebook in the UK is clearly still in
the early stages. However, when taking into consideration analysts’
projection that Facebook ad revenue from outside the U.S. will be on par
with U.S. ad revenue by 2012, the figures from our poll tell us it’s only a
matter of time before the 42% “experimenting” with Facebook ads will have “well
developed” campaigns and the 52% percent still undecided will be