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WHITEPAPER / SOCIAL
Facebook’s Best Kept Secret:Building Conversions and Revenue with Ads for Fans
®
By Justin Kistner, Director of Social Products, Webtrends
Facebook advertising is about much more than posting. If you aren’t optimizing Ads for Fans, it can be costing you conversions and revenue.
WHITEPAPER / SOCIAL 2
At a Glance
Business Trend
• Facebookisnow800millionusersstrongandhasevolvedfromacommunitysitetothelargestadvertisingopportunityintheworld–biggerthanGoogle,Yahoo,AOLandMicrosoft.
• CustomerswholikeabrandonFacebookprovidethatcompanywithvaluable,opt-inlistmarketingopportunities,specifically,theabilitytotargetfanswithads.
• Fansavidlysharetheirinterestinbrandswiththeirfriendsbecausetheirengagementisexposedinthenewsfeed.
At Issue
• WallpostsandfanpageswithlowengagementandaffinityarefilteredoutbyFacebook’sEdgeRankalgorithm,andwillfailtoshowupinfans’newsfeeds.
• Knowingwhatencouragesengagementandhowtooptimizefaninterestremainelusivetomanymarketers–whoareseekingwaystomonetizethechannel.
• Targetedadsareeffective,butarethebestkeptsecretonFacebook.
Business Solution
• AdsforFansofferthegreatestreturnoninvestment.
• Brandscangain7Xgreaterclick-through-ratesbytargetingfanswithads,whichkeepscostperclick,andcost per fan, at a minimum.
• Withadvancedanalyticssolutions,marketerscanroll-upFacebookdataaspartofanoveralldigitalmarketing performance report.
WHITEPAPER / SOCIAL 3
Facebook’s best kept secret: building conversions and revenue with ads For Fans
Thankstoabig-drawmovieandcountlessnewsspots,everyonewithaninterestinsocialmediaknowsthestory
ofFacebook.Startedin2004bycollegestudentsasawaytoconnectwiththeirfriends,ithasgrowntoaglobal
socialnetworkingsiteof800millionactiveusers,with700millionofthosecomingaboardinjustthelastthree
years.AccordingtoEdisonResearch,asof2011,anestimated51percentoftheU.S.populationisonFacebook.
Itisexpectedtoreachonebillionfanssometimein2012.
Facebook,ofcourse,isn’tallaboutindividualsandfriendssharingposts.It’salsoaboutbusinessesandbrands
engagingwithfans.Butastheexcitementfrommeetingyourfangrowthgoalsbeginstosubside,therealityof
“Nowwhat?”beginstoseepintomarketingplans.Theexecutivesuitewondershowyouplantoengage,nurture
andmonetizethosefansandshowareturnoninvestment.Thisisapointatwhichmarketersoftengetstuck:
Howdoyoudeliverrealbusinessvaluefromyoursocialcampaigns?
From community site to performance environment
WhileFacebookisprimarilyknownasasitewherefriendscancommunicate,asabusinessithasevolved.Injust
ashorttime,ithasbecomeapowerhouseofadinventory,morethanYahoo!,Microsoft,GoogleandAOL,with
nearly180billionU.S.displayadimpressionsalone.Itisnowaperformanceenvironmentfilledwithmediaandad
campaigns,andwithunprecedentedopportunityforclick-throughs,conversionsandrevenuestreams.
net u.s. display ad revenue: source: eMarketer; septeMber 20, 2011
Facebookoffersauniqueandvaluableadvertisingenvironment.Why?Fansare100percentopt-ins– theywanttobeyourfriendandwanttohearfromyou.And,theywilltelltheirfriendsaboutyou.
Then why aren’t you getting better campaign results?
ThemajorityofFacebookfansofbrandsarecustomersprimarilylookingfordeals,exclusiveoffersandbenefits.
This is a good, because customers buy 36 percent more products and services from a brand after becoming a
fan.However,abrand’spresenceinafan’snewsfeedisdependentonthelevelofengagementwithafanpage
(liking,commenting,posting,sharing).Iffansaren’tactivelyparticipating,thenabrand’spageisfilteredoutby
Facebook’sEdgeRankalgorithm.That’swhysomewallpostsmayhavedisappointingresults.
WHITEPAPER / SOCIAL 4
Thereareotherreasonswhybrandsmightbelosingengagement.Testinghasshownthattraditional
transactionaladcontent,containinglanguagesuchas“percentoff,”“coupon”and“sale,”attractsthelowest
ratesoffanengagement.Again,withlowengagement,Facebook’sEdgeRankalgorithmfiltersthosepostsoutof
thenewsstream.
Whatdoesgetthehighestengagement?Facebookisasocialnetworkingsite,sothetypeofactivitythat
Facebookvaluesmostisconversationsandsharingbetweenfriends.ToencourageFacebookengagementand
sharing,andnotbeshunnedbyFacebook’sEdgeRankfilter,itisnecessarytoincreasethe“funtotalkabout”
factorinpostsandads.ThisissomethingWebtrendscallstheSociabilityIndex,discoveredwhiledoingresearch
about Facebook ads.
what clicks, what costs. sociability index. source: webtrends, 2011.
IntheSociabilityIndexgraphicabove,bluebarsrepresentcostperclick(CPC).Thelongerthebluebar,themore
eachclickcosts.Redbarsrepresentclick-through-rate(CTR).Thelongertheredbar,themoreclicks.Thereisa
strongrelationshipbetweenCTRandCPC,whichisthehighertheCTR,thelesstheCPC.Topicswithlongred
barsarewhatpeoplelikemosttotalkabout:travel,media,sports,fashion,luxurygoods,beautyproducts,cars,
tabloidsandblogs.Thesetopicsaremoresocialinnature.
Whileafewindustrieshavelowsociabilityindexratings(healthcare,financialservicesandtelecommunications,
forexample),knowingwhatfansliketotalkaboutisimportantwhencreatingpostsorads.Tofacilitate
engagement, use status updates to ask fans for their opinion or preference. When it’s time to push offers,
considertargetedads.Becausefanshaveopted-in,theyaremorelikelytoclickontheads.
WHITEPAPER / SOCIAL 5
Yet,despitethepotentialforconversionandrevenue,marketersremainrelativelyunawareaboutAdsforFans,
eventhoughtheimpactcanbesignificant.Unfortunately,thatisleavingmoneyonthetable.
Who is a fan?
Beforeplacingads,itisimportanttoknowwhattypeof
consumerisonFacebook.Morethan60percentareage
25-55+.Breakingthatdownevenfurther,29percentare
age35-54–that’sone-thirdofFacebookfansfirmlyinthe
categoryofgreatestspendingpotential.Currently25
percentoffansareage25-34,andtheyaremovinginto
theirlucrativespendingyears.
TheagegroupwiththehighestCTRandthegreatest
amountofdiscretionaryspendingincludethose55-64.
Marketersmaywanttoremembertheadage,“theolderwe
getthemoreweclick.”Ifaproductisgearedtoteens13-17,
agemaybeareasonanadisnotgettingdesiredresultson
Facebook.Theyrepresentjust10percentofusersandthe
leastlikelyagegrouptoclickonads.
HowdoFacebookusersbecomeyourfans?Themaindrivers:75percentcomefromaninvitation
oranad,59percentfromafriendand49percentfromsearch.Clearly,adscanhaveasignificantimpacton
acquiringasolidfanbase.
understanding ads For Fans
There are three common approaches to
Facebookads:
1.Usingadstodrivewebsitetraffic;
2.Usingadstoacquirefans;
3.Usingsponsoredstories,sharedinaform
ofanadtofriends,suchas"Davidlikesthis
brand," to gain fans.
Industrieswithlowsociabilityindexratings
needtocarefullyconsidertheiradtopicin
ordertogainbetterCTR.Forinstance,ifan
insurancecompanysponsorsabigfootball
game,anAdforFansthathighlightsthe
gamewillprovebetterCTRthaniftheadisdirectlysellinginsurance.
Toimprovesharing,Facebook’s“friendsoffans”targetingfeatureallowsbrandstoexpandaudiencereachby
Source: http://www.istrategylabs.com/2010/01/facebook-
demographics-and-statistics-report-2010-145-growth-in-1-year/
Who Uses Facebook?
WHITEPAPER / SOCIAL 6
deliveringadstothefriendsofpeoplealreadyconnectedwiththepage,
application,grouporevent.Whenfriendsoffansseethead,they’llseethat
theirfriendslikethebrand,andtheyinturn,willbemorelikelytobecomefans
themselves.
TwootherfactorsarealsoimportanttoimprovingCTR:1)collegeeducated
Facebookfansaretwiceaslikelytoclickonadsiftheyseeafriend’snameor
faceinthead;and,2)imagesthatinspire“whatisthat,”or“Iwanttosee
more,”aremostsuccessful.That’sdifferentfromthewayGoogleadswork,whichdon’tcontainimages.
a bucket plan For success on Facebook
Acquiringfansthroughadsisthefirststeponthejourneytomonetizingmarketingefforts,anditisoneofthemost
effectivemethodsacompanycanusetobuildacustomerbaseanddriveconversions.AdsforFansdeliverthe
best return on investment.
WebtrendshasworkedwithbrandsaroundtheworldtooptimizeAdsforFans,andhasdevelopedabest
practicesapproachtoadvertisingbudgets.Ratherthanplacetheentirebudgetintoonetypeofad,threebudget
buckets are advised.
The Nurture Fansbucketisusedtodeliverofferstoexistingfans,drivingthemtolandingpagesonyourwebsiteand
fanpage.Thisbuckethelpsyouachievethegreatestreturnoninvestment.
The Acquire Fans bucketisaboutbuildingyourfanlist.Ifyourfanbaseisalreadygood,spendlessthanhalfofyour
budgetonacquiringmorefans.Ifyouhaveaverylargefanbase(over1millionfans),uselessthan20percentofyour
budget for acquisition.
The Friend of FanTargetingbucketisforacquiringandnurturing,reachingoutwithadsorsponsoredstoriesto
friendsofyourfans.Theseeffortsbringyougreaterresultsthansimplycoldcallingforfans.Why?Becauseyourfans
arethebestbrandambassadorsyouhaveandtheirfriendswillnoticetheirpreferences.Itishumannatureto
associatewithpeoplewhohavethingsincommonwithus.
Cold call targeting averages
.05 percent CTR. Ads for Fans
reap a .35 percent CTR.
That’s 7X greater.
WHITEPAPER / SOCIAL 7
WhencreatingFacebookcampaigns,itisgoodpracticetohaveavarietyofadcreativereadyavailablefor
rotation.Facebookadshaveaquickburnoutrate.AnaverageadwillhaveapeakCTRinthefirstthreedaysit
appears;afterthat,itbecomesmorecostlytorun.Thatmeansifyouhavea30-daycampaign,planforatleast10
creative refreshes.
driving traFFic For ads For Fans
Unlikeotheronlineadenvironments,Facebookisadestinationsite.
Whileyourfansmayclickthroughtoyourwebsite,datashowsthey
willreturntoFacebook.Youwillexperiencehigherconversionrates
iftheinitiallandingpageexperiencestayswithinFacebook.That’s
becauseaftercontextisprovidedwithinFacebook,fansaremore
willingtotakeactiononyourwebsite.Customtabs,placedintheleft
sidebaronFacebookpages,makeeffectivelandingpages.Ifa
customerconversiontakesplacewithinFacebook,that'sallthebetter
for engagement.
“ gordmans, an omaha-
based apparel and home
fashions retailer, ran a highly
targeted sponsored like ad
against the regions where they
have 68 retail locations, a
female demographic, and
interest terms for bargain
hunting.
while most Facebook ads are
lucky to get a 0.05% click-
through rate (ctr), this
campaign drove a 0.40% ctr
on the first day. After 48 hours,
it was still generating 0.220%
ctr. generally, anything at or
above 0.1% is highly
optimized!
sponsored likes also
decreased the cost per click
by 70% and cost per fan by
83% overall. that’s like getting
a 77% discount off from
Facebook!
To read the entire Gordmans Facebook case study, go to www.webtrends.com
DriveadsfirstwithinFacebook,usingfriendsoffans,landingpages, events or custom tabs.
Custom tabs CustomTabs
WHITEPAPER / SOCIAL 8
tracking caMpaign activity and conversions FroM Facebook
WhetheradsdrivefanstoanotherFacebookpageortoawebsite,itisimportanttotrackactivitywithcampaign
IDurls.Toaccomplishthis,you’llneedtouseananalyticssolution,suchasWebtrends,thatallowsconversion
trackingthroughFacebook’suniqueenvironment.Typicalconversiongoalsmayincludedownloadingwhite
papers,casestudies,webinars,trialsoftwaredownloads,Ecommerce,couponsortrialproducts,dependingon
the industry.
choosing a robust analytics solution For Facebook advertising
Theanalyticssolutionyouchoosetotrack,testandtargetFacebookadvertisingmustbeabletosupportpassing
campaigndata,allowingbrandstotrackaFacebookcampaignasisdoneonastandardwebsite.And,tofollowa
Facebookvisitorthroughtoanotherproperty,suchasawebsite,theanalyticssolutionhastosupportcross-
domaintracking.WithWebtrends,brandscan:
• Trackconversionsthroughiframetabs,anHTMLstructurethatallowsanexternalpagetobeembeddedon Facebook fan pages
• Maintainvisithistoryevenasvisitorscrossdomains
• CollectFacebook-specificdatasuchasfanstatus,gender,language,andmore
• Measureandcompareperformanceacrossalldigitalchannel
• Enjoyopen,flexibleanalysisforvisualreporting
Inaddition,Webtrendsallowsbrandstocreateandmanageadspend,segmentwithmicro-targetingandsetup
ad rotation.
Ad
Post
Tweet
Site
App
Like
WHITEPAPER / SOCIAL 9
rolling up Facebook data into a uniFied perForMance reporting
AdsforFanscampaignscanbemeasured,tested,targetedandoptimizedtogainbetterperformance,justas
marketershavedonewithwebsitesforyears.But,itisalsoimportanttoknowhowtheresultsofadvertisingin
Facebookcomparestoandfitsintoyouroveralldigitalmarketingstrategy.Thisisonethemajorchallengesofthe
newdigitallandscape.
Advancedanalytics,suchasthesolutionsofferedbyWebtrends,allowdatatobecomparedandunifiedacross
allchannels–web,mobileandsocial.Thisofferstheseniormarketerthebestbusinesscaseforjustificationof
investment,apathforachievingmarketingperformance,andacompetitiveadvantageinthemarketplace.
FormoreinformationonAdsforFansaswellasotherWebtrendssolutionsforsocialmarketingand
measurement,visithttp://webtrends.com/solutions/social/
Unified reporting in Webtrends gives marketers a comprehensive view of all digital marketing performance.
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