July 18, 2013

Facebook Goes Direct From the moment, the first brand on Facebook collected 10,000 fans, marketers have been asking about the relationship between “likes” and sales. Initially Facebook found a dozen ways to deflect the conversation. Facebook doesn’t really sell, they’d say. Its about relationships, buzz and engagement. Facebook is a tool for generating comment, creating warm fuzzies and enrolling fans as advocates for products and services and creating some sense of loyalty. But the guys paying the bills kept asking. How many fans, followers or likers are buying my products? How many are referring friends? How many are buying repeatedly? Finally Facebook created ad units to address these ROI concerns. The latest innovation, launched in May called Facebook Exchange (FBX), is inventory in the News Feed (the primo real estate on Facebook). FBX cannot be bought directly from Facebook. Units must be purchased only through an FBX qualified company. Unlike right hand side (RHS) Facebook ads, which are sold on a cost-per-thousand (CPM) or cost-per click (CPC) basis, FBX inventory is priced as a cost-per-insertion, limited to one each day. These units, a 154x154 pixel image and several lines of copy, were created to enable precision targeting, links to outside websites where marketers actually sell stuff and pixel tracking to enable retargeting on Facebook and across the web. Consumers can like, share and comment on FBX ads, so a measure of virility is baked in. Adroll, a Facebook retargeting partner and FBX qualified company, looked at 547 advertisers across industry verticals spending between $1000/month and $20,000/month to generate over one billion impressions using FBX and using ad inventory on the right hand side of everyone’s page. They zeroed-in on retargeting, their specialty, and compared results against traditional display and retargeting inventory from online ad exchanges like Google’s DoubleClick, Yahoo’s Right Medias Exchange and AppNexus. The research validates FBX alone and in combination with RHS as a potential direct marketing tool. News Feed retargeting had a click-thru-rate (CTR) 49% greater than RHS and 21% better that standard web retargeting. News Feed cost-per-clicks (CPCs) was half of RHS ads and 1/5th of web retargeting. Conversion fared less well. FBX ads yielded 9% fewer clicks than the web and 16% less than RHS, which are generally considered anemic by direct marketers. FBX plus RHS drove more clicks at lower costs, even though combined their reach is significantly less than standard web targeting. Finding the right inventory mix will be our next challenge. In the first seven days of adding FBX to RHS, Adroll discovered a 62% increase in total clicks with an average decrease in CPCs of 30 percent. In the campaigns studied FBX was just 0.5% of the impressions but drove 14.7% of the clicks – promising results. Clearly Facebook is trying to create the right inventory to help brands link social activity with sales and loyalty. FBX is a step in the right direction worthy of further testing.
Banish Banner Ads! Online display advertising – banners – came to life, eighteen years ago, as a direct lift from print onto the Web. Ads adjacent to content would, so the theory goes, perform much like magazine and newspaper ads had for a century. In the early years, marketers experimented with banners that rotated, sung, lit up, buzzed and otherwise intruded. After significant consumer backlash, the Interactive Advertising Bureau (IAB) led publishers to create standard sizes, technical specs and placements. Since then display ads have become an automatic and routine element in media plans. Today buying and selling these commodities is automated much like program stock trading. The problem is that the basic premise was wrong. Display ads do NOT perform like print ads. Trust and recall levels are significantly higher for print ads. Almost from the beginning consumers looked past them. “Banner blindness” was diagnosed early on but marketers eager to go digital ignored the disease and its symptoms. When clients balked at paltry lead generation, site traffic or sales results, publishers touted banners for awareness building. This is the reigning conventional wisdom. Last year, according to ComScore, 5.3 trillion display ads were served in the US. Four hundred and forty five advertisers each paid for and delivered more than a billion banner ads in 2012. The average Internet user was exposed to 1707 of them each month, 2094 if you’re between 25 and 34 years old, even though between 31-54 percent of display ads can’t actually be seen because of technical, browser settings or rendering issues. In the 1.7 seconds that consumers glance past ads, only 1 percent of these ads drew a click. And just 8 percent of all Internet users account for 85% of all clicks. On mobile devices more than 50% of clicks are accidental. According to Solve Media, you’re more likely to survive a plane crash than click on a banner ad. The implication is, according to Susan Vranica writing in the June 11th edition of the Wall Street Journal, “that billions of marketing dollars are being poured down a digital drain.” In an age of emergent content marketing, its time to banish banners in favor of media units that are seen, interact and engage with customers and prospects.

Danny Flamberg

I am a veteran marketing consultant working with leading and emerging brands

The Typepad Team

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