As part of our ongoing series on companies offering Facebook’s Ads API tools and services, today we profile Spruce Media. It provides a full-service managed spend Facebook ads solution with a cost per acquisition structure. The company specializes in assisting performance advertisers from verticals including social gaming, group buying, flash sales, ecommerce, and Facebook Pages.
Spruce Media aims to attain the lowest possible costs per action ads for its clients. Founder and chief executive Rob Jewell tells us that he sees full managed spend as the best option for Facebook advertisers as most don’t understand or have the technology to handle the relatively new and complex channel.
For reference, the Facebook Ads API allows developers to create powerful tools and services for designing, targeting, and managing Facebook ads. These are especially important for big advertisers who need better efficiency and A/B testing than what’s available through Facebook’s self-serve performance advertising system.
Spruce Media launched its service in April 2010 after Jewell sold off his previous company, SocialCash, an ad network for in-Facebook app advertising. The San Francisco and Washington, D.C.-based company now has 18 employees, and handles millions of dollars in spend every month.
In Q1 2011, it delivered over 50 billion impressions on a CPA, CPI, and CPL basis for more than 15 clients including LivingSocial, Bigpoint, LOLapps, 6waves, and Toms. It is now one of the world’s largest Ads API companies, and operates in the same space as performance-basis services AdParlor and Nanigans, though it isn’t solely focused on social games.
Spruce Media is centered on its media buying team. Jewell tells us “There are hundreds of creative approaches and optimization strategies to solving the media buying problem. No machine will ever be able to do it nor will a single media buyer.” It therefore assigns five buyers to a client at a time, bringing in a wealth of ad creative and targeting approaches in order to lower CPAs. Once the original team has exhausted their strategies, Spruce switches in another set of buyers.
The company is taking a progressive approach to Facebook’s new ad unit Sponsored Stories. It works with clients to improve the user registration flows on their websites to increase connections to a client’s Facebook Connect app, seeding Sponsored Stories.
Jewell tells us he sees social ad units like Sponsored Stories as the future of Facebook advertising. As such, tools and services focused on search advertising will find it harder and harder to bolt on the Facebook Ads API, and they won’t be able to adapt to Facebook’s rapid release schedule fast enough. Therefore, he believes its crucial for advertisers to work with companies that specialize in Facebook ads.
Spruce Media clients set goals for ROI and scale and Spruce accepts the contract if it’s confident it can achieve them. Using its internally developed tool, the company’s media buyers A/B test ad creative and targeting variants, which are managed through a two-screen dashboard. Multiple identical instances of an ad are rolled into the same line item to ensure variants receive a sufficient number of impressions to draw reliable conclusions.
Budget is shifted to high performing combinations using revenue per click and percentage bidding options. Dayparting allows for enhanced optimization, and sparkline and pop-down graphs based on hourly reporting convey performance to buyers at a glance. Some other tools don’t offer these inline charts, requiring users to click through each ad to get an idea of its historical performance.
Facebook and Search Advertising Don’t Mix
Rob Jewell tells us that once the Facebook ad space matures, there might be a market for licensable tools. Until then, though, a performance advertiser’s best bet is to trust their spend to a CPA-based full managed service. He says this works out better than going with an agency-style service who charges a percentage of spend, such as TBG Digital, because those companies aren’t as incentivized to find the lowest possible CPAs for their clients, but instead to just get clients to increase spend.
When we asked Jewell about what the next generation of Ads API features would be, he explained that many tools and services actually still have problems with the basics. For instance, they’re basing their optimizations on single runs of ads variants that might only get 1000 impressions — not enough to conclude if they’re high performers or not. He also told us many tools don’t know to clone and republish successful ads once they start to dip in performance because due to some intricacy of the API, this actually jumpstarts their performance.
Once the basics are covered, he thinks Ads API companies need to focus on conveying the power of the new Facebook ad units and teaching them how change their websites and Facebook Pages to harness the value of units such as Sponsored Stories. Clients need tools and services that are adapting to the shift towards social ads, and that means choosing a service like Spruce Media, not a company anchored to search advertising.