Doing Facebook Advertising the Right Way
Despite a recent comScore study crowning
Facebook the king of all display advertising; marketers
still have reservations about putting their
ad dollars into the Web’s largest social network.
The negative sentiment was recently amplified after General
Motors very publicly pulled their ads from the social network
right before Facebook’s IPO. Despite the uncertainties,
many marketers believe social networks remain a
viable marketing channel — especially those with a well
thought-out social advertising strategy in place. Their secret?
They know which formats work (check out WM’s
Guide to Facebook Ad Formats at http://wsm.co/MfCwNt)
and which metrics to measure.
Social Survey Says….?
Most Facebook marketers know that they need to keep an
eye on interactions such as likes and comments, yet many
remain unsure of how these interaction types affect their
bottom line. A new study from Resolution Media and Kenshoo
fortunately offers some interesting insights into the
social advertising metrics, forcing many to rethink how they
define effectiveness in relation to Facebook ads specifically.
“Social media has quickly become one of the preferred
channels for brands, and when done right, can foster meaningful
relationships between brands and consumers in ways
that were never before possible,” says Alan Osetek, president
of Resolution Media. “The purpose of this study was
to define what ‘doing it right’ means in terms of measureable
actions and outcomes, and giving marketers a model
for demonstrating effectiveness.”
The study essentially introduced new metrics - Exposure
Rate and Frequency. Exposure Rate measures the percentage
of a target audience that a brand is reaching and exposing
its message. Frequency measures the amount of
times the average Facebook user has been exposed to a specific
advertisement.
According to the joint research, high Exposure Rates
correlate to high click-through rates (CTR) and conversion
rates, with ads that reached 76-100 percent of their intended
audience also receiving an average CTR of .038 percent and
conversion rate of 31.92 percent. Conversely, ads that only
reached just 0-25 percent of the intended audience resulted
in an average CTR of 0.028 percent and a conversion rate
of 11.81 percent.
The study also revealed that high Exposure Rates don’t
guarantee success as successful campaigns should balance
Exposure with Frequency. The data showed there is a conversion
rate drop-off of 32 percent (as well as a 39 percent
lower CTR) when ads were shown to consumers more than
six times. The reason? Consumers start ignoring ads when
they have been exposed to them too frequently.
Tips and Tricks
One way that marketers can optimize Exposure Rate and
Frequency is by maintaining a cost-per-click (CPC) above
the maximum recommended bid. The study showed that
the Exposure Rate is higher by an average of 11.5 percent
for ads with a CPC that is greater than the maximum recommended
bid. Additionally, the Frequency drops when
the CPC is above the maximum recommended bid, by an
average of 1.7 Exposures.
The data also reveals that Sponsored Stories tend to deliver
high Exposure Rates while maintaining a low Frequency.
This is because this specific type of advertisement
can only be shown to friends of fans. However, it is important
to note that marketers shouldn’t rely on Sponsored Stories
as their only active advertisement format on Facebook,
especially because this option alone most likely won’t garner
a large amount of visibility with new users, since only
friends of fans are able to see these ads.
Another factor that can impact both Exposure Rate and
Frequency is targeting. The study shows that the Exposure
Rate is lower when there are no interest targets set, which
is because the available audience size is larger. However, by
adding a Broad Category Target (BCT), marketers are not
only better targeting their audience, but the Exposure Rate
of their advertisement also increases. The same is true for
marketers who use precise targeting, which is a type of interest
targeting that even further narrows down an audience
based on specific interests. However, it is also
important to note that Frequency is higher for ads that use
precise targeting.


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