Chief operating officer Sheryl Sandberg and other Facebook executives have often discussed the need to track conversions, and not just clicks, and the social network took a significant step in that direction with Tuesday’s announcement that it is expanding the availability of its conversion lift measurement capabilities.
Facebook said advertisers that work directly with Facebook teams will be able to set up conversion lift studies with their account representatives and see near-real-time results in Ads Manager, adding that the goal is to expand its offering to cover more use cases and more complex studies.
Tuesday’s announcement on conversion lift measurement capabilities expands on the social network’s December 2013 introduction of the ability by advertisers using its custom audiences feature for ad targeting to measure offline sales driven by their campaigns.
Facebook provided the following details on its new conversion lift measurement capabilities in a Facebook for Business post:
What is conversion lift? Conversion lift accurately captures the impact that Facebook ads have in driving business for marketers. Here’s how it works:
When creating a Facebook campaign, a randomized test group (people that see ads) and control group (people that don’t) are established.
The advertiser securely shares conversion data from the campaign with Facebook. Typically, this data comes from sources like the Facebook custom audiences pixel, conversion pixel or secure point-of-sale (POS) data.
Facebook determines additional lift generated from the campaign by comparing conversions in the test and control groups
The results of the study are made available in Ads Manager
Why measure conversion lift? Conversion lift is a better solution not just for advertisers on Facebook, but for digital marketers in general. It addresses several of the measurement challenges currently facing marketers:
Over-reliance on clicks: While last-click attribution makes sense for search marketing, it’s less useful for other digital or display environments. Counting clicks doesn’t account for the value created by simply seeing an ad. By allowing advertisers to measure the impact of exposure to an ad — with consistency, across devices — conversion lift measurement offers a more holistic view of an ad’s performance.
The rapid shift to mobile: The technology that supports current measurement systems (cookies to track exposure and tie to behavior, and clicks as a proxy for sales) is not sufficient in a world where people use multiple devices throughout the day and the majority of purchases still happen in a physical store.
Ineffective testing methods: To date, there hasn’t been a widely adopted standard to determine the direct impact of digital advertising. Conversion lift testing is based upon the principles of lift measurement, a scientific approach used in a number of industries — such as direct mail marketing — to determine causation.
The impact of conversion lift: Open Colleges, Australia’s leading online learning provider, used a conversion lift study to measure the full impact of its Facebook campaigns. Results from the study revealed a 95 percent lift in conversion rate for website inquiries and a 12 percent lift in offline enrollments. The study also showed that the cost per acquisition was 23 percnt lower than what Open Colleges’ last click model had indicated.
A conversion lift study helped children’s furniture retailer The Land of Nod better understand the role Facebook plays in driving customer acquisition. Advertising during the summer sale, back-to-school and fall launch seasons, a conversion lift study showed that Land of Nod had realized an acquisition lift of 12 percent through Facebook, proving the efficacy of its recent campaigns and establishing the benchmark for its 2015 Facebook program goals.
Sandberg said during Facebook’s third-quarter earnings call last October:
2013 was the first year that average American adults spent more time on digital media than watching TV, and that gap has continued to grow. Today the average adult in the U.S. spends nearly 25 percent of their media time on mobile, but advertisers spend only about 11 percent of their budgets there. One of the main reasons the budgets aren’t moving as quickly as consumers is that advertisers haven’t yet had an effective way to serve ads and measure their returns on mobile. Current solutions work well for person with one device, especially, a PC and for sales that happen online.
But today people often have multiple devices and still make many purchases in physical stores. Nielsen data show that the digital industry is less than 60 percent accurate in demographic targeting of ads, which means that four in 10 people are seeing the wrong ads.
Similarly, marketers are not confident that they can measure mobile ad performance. Many of the most commonly used measurement systems overemphasize the value of the last click. This does not make sense, given that studies of Facebook campaigns show that over 90 percent of ad-driven in-store sales come from people who saw an ad but didn’t click on it.
It’s clear that marketers and publishers need better tools for the mobile world. This is an industry problem that we believe we are well placed to solve. Our relaunch of Atlas (in September) during Advertising Week was an important early step that builds on the advancements in measurements that we have made over the past two years. The new Atlas is an ad-serving and measurement platform that we completely rebuilt. By using Facebook data, Atlas can deliver highly relevant ads, regardless of device.
Atlas is also able to provide accurate measurement by connecting online marketing to in store sales. Importantly, Atlas does all of this in a privacy-protected way. Neither Atlas nor Facebook tells marketers who you are. At Advertising Week, we had productive conversations about Atlas with many marketers and agencies. We are pleased with their interest.
And eMarketer analyst Lauren Fisher said in an email to SocialTimes:
By offering its advertisers a measure of conversion lift, Facebook is smartly catering to advertisers that want to understand how ad dollars aren’t just driving clicks but actual sales. It’s also a great example of how Facebook is continuing to push new and different standards of measurement.
Advertisers: What are your early thoughts on Facebook’s new conversion lift measurement capabilities?