Determining Facebook's Face Value
Determining Facebook's Face Value
There's no slowing down this social engine. It seems like team Zuckerberg is always releasing the next big feature that the world clings to and integrates into their personal and professional lives. From Graph Search to promote a friend's post, Facebook has launched several features this past year specifically of interest to marketers, and knowing which features to adapt and which ones to avoid can be a bit overwhelming. Here are a few Facebook features and enhancements marketers should know.
One of the most recent Facebook developments is the Custom Audiences' extension. Facebook originally launched Custom Audiences in September 2012. The social network recently built on the targeting tool to help companies use data from Acxiom, BlueKai, Datalogix, and Epsilon to better target consumers through Facebook ads.
According to Marc Grabowski, COO of Facebook strategic preferred marketing developer Nanigans, by using Custom Audiences, marketers could create customer segments using their first-party data (including email addresses and phone numbers) and by sending a hashed file to Facebook. *Facebook would then align that data with its own matching data to create what it calls custom audiences. By using data from Facebook native audience targeting, including gender, likes, interests, age, geography, or actions, marketers can further re-target these segments. Marketers could then buy Facebook ad units based on those audiences to better target them.
Now, Facebook has taken this segmenting tool one step further. As noted on the site, companies that already collaborate with the above four data brokers can now apply third-party data to specific Facebook campaigns. In addition, Facebook intends to team up with those data brokers to establish Facebook targeting categories, such as candy eaters.
“The extension of Custom Audiences to include select third-party data is a natural evolution of Facebook's advertising ecosystem. It works to bridge Facebook's compelling native ad environment with the targeting options advertisers have become accustomed to in the more mature world of display,” Grabowski says. “This extension of Custom Audiences adds to the arsenal of intent- and direct-response focused products available on Facebook, such as mobile app install ads, retargeting through FBX, and Facebook's core Custom Audience product.”
Another tool for marketers in that arsenal is Facebook Exchange, which debuted in June and officially went out of beta in September 2012.
Facebook Exchange allows marketers to bid on impressions in real-time. However, according to Grabowski, Facebook Exchange is a bit more limited than Custom Audiences. For instance, due to privacy regulations, marketers can't use Facebook-owned data. Hence, they must rely on their own information. In addition, Facebook Exchange ads are a bit more cookie cutter in the way that marketers are restricted to purchasing the Facebook Standard Ad or “right-hand side” ad, Grabowski says.
Consequently, Grabowski notes that solely using Facebook Exchange or solely using native Facebook audience targeting is a marketing faux pas. “There's incredible value of capturing people via API and then remarketing to them with Facebook Exchange,” Grabowksi says.
To compare Facebook Exchange to native Facebook audience targeting through the Ads API, Nanigans conducted a study with an e-commerce retailer (whose name he couldn't share) and analyzed more than $1.2 million in sales revenue. One group of customers visited the retailer's site after being targeted with Ads API buys; the other group visited the site through other channels, such as paid search. Both groups were then retargeted through Facebook Exchange, according to Nanigans. The customers initially targeted through Ads API buys generated 89% more sales revenue than the other group. In addition, Ads API targeting prompted 39% more customer purchases than Facebook Exchange did on its own.
In addition to Custom Audiences and Facebook Exchange, Facebook's Graph Search, which had its beta launch in January, could also provide insight into consumers' intentions, Grabowski says. One sentence here describing Graph.
“If I search for something on Google or Yahoo! I'm going to get the same results that you're going to get [and] that everyone is going to get,” Grabowski says. “I don't want the same results that my mother gets…. I want the results that my buddies are going to see or my fiancée sees, depending on what it is. To be able to have that search curated by similar searches from other people, I think there's a lot of interest there.”
As interesting as all these tools may be, marketers shouldn't rush in to an automatic “plug and play,” says Sam Melnick, research analyst of IDC's CMO Advisory Service. Melnick advises marketers to focus on their Facebook strategy first and foremost. “I recommend that folks map it out…. What are you trying to accomplish?” Melnick asks. “If it's a consumer [you're targeting], are you trying to convert people, are you trying to get downloads, are you trying to get them to buy something? If it's B2B, who are you trying to [reach], who are you trying to connect with, or who are you trying to influence?”
Melnick also advised marketers to stay abreast of Facebook's mobile developments, given that more than 680 million monthly active Facebook users are mobile, according to Facebook.
In addition, Melnick warns marketers to be realistic when it comes to incorporating Facebook into their marketing mixes, and to view Facebook as one component of a holistic, multichannel effort.
“It's also understanding that you're not going to close a million dollar deal on a social network [or] on Facebook,” Melnick says. “You might be able to bring in more leads at the top of the funnel or earlier into the pipeline at a cheaper cost than a display ad or Google Adwords.”
Facebook appears to be playing into this holistic approach, as it recently announced its acquisition of Atlas Advertiser Suite, a digital marketing tools provider, from Microsoft.
However, there's no denying that Facebook's reach, influence, and utility gives other social networks a run for their money.
“People are far more likely to make decisions based on friend or family recommendations versus responding to traditional advertisement,” a Facebook spokesperson says.
Grabowski notes other benefits that he says make the social channel uniquely valuable, including homing in on consumer intent, determining profile user types, and targeting consumers who share similar interests. “If a brand can connect with somebody or use that data to have a better understanding of the person's profile,” he says, “then they're going to be much better at targeting.”*Updated March 3, 2013 at 4:27 PM