Perhaps the greatest challenge facing marketing managers right now is finding the right place online to spread their message. But since Facebook revamped its mobile and desktop offerings to include a wide range of placement options, all signs point to Facebook being an ideal platform to spend additional ad dollars. With Facebook’s recent enhancements, brands and agencies now have the ability to better engage with their audiences in new and unique ways through personalized ads that capitalize on what Ampush calls “referred intent.” This is what the social technology company characterizes as engaging relevant audiences from Facebook who are enticed by highly targeted messages or stories with social context, then perform a desired action such as liking a brand’s page or downloading a mobile application.
The return on Facebook ad spend has been so encouraging that many brand managers are looking to increase their spend with Facebook in 2013. Data from social marketing agencies reveal that Internet search ads command an average cost per thousand impressions (CPM) of $20 to $30, which makes achieving a decent return on investment a real challenge. Average Facebook CPMs, on the other hand, are reported to be closer to $5 to $6. That’s a significant difference, and one that has a lot of marketing strategists thinking.
While advertisers were initially skeptical of Facebook’s mobile revenue opportunity, the company generated 23 percent of ad revenue from mobile in the fourth quarter of 2012, up from 3 percent in the second quarter. Analysts predict that over the long haul, news feed and mobile ad formats will comprise nearly 60 percent of total ad revenue for Facebook. There is no doubt that marketers are looking to capitalize on the opportunity within Facebook in 2013.
The following are three key developments on Facebook that are going to significantly impact how you spend your dollars online this year: mobile advertising, custom audiences, and multichannel attribution. These are all trends and concepts that will materially affect how marketers approach social media advertising moving forward.
Mobile advertising still has plenty of room to grow, and Facebook is well-positioned to take full advantage of this channel. Given the inherent novelty with new ad products, advertisers that are early adopters are likely to see higher engagement as consumers will be intrigued about these placements. For example, Facebook recently allowed page like ads to appear in the news feed of its mobile and desktop applications, thus allowing advertisers to reach a larger audience through the most engaging placement on the site.
Facebook has also attested to user feedback that indicates that its users are more tolerant of in-stream ads, since they are either expected or, in some cases, wanted. Results from our campaigns show that engagement rates of mobile news feed ads are on average 10 times higher than desktop, further supporting Facebook’s claims that these ads are less of a major issue for users. While some skeptics may wonder how accidental clicks are affecting Facebook’s claims, click-back testing has verified that clicks have been purposefully intended by the users.
This is the game-changer in digital advertising. As marketing professionals shift their views from fan acquisitions to engagement and amplification, advertising on Facebook is also becoming much more sophisticated, and new technologies are being demanded from users. Facebook’s new targeting tool, custom audiences, is revolutionary, since advertisers can match unique online identity with offline customer-relationship-management data and deliver relevant ads on an individual basis.
Facebook is the only platform that enables accurate individual targeting on a large scale, which makes Facebook advertising a very sustainable business model of audience reach and frequency. No other platform allows marketers access to this level of detailed information about their audience, and allows it for it be directly measurable in real-time. This unlocks a huge opportunity for marketers to place ads strategically in order to maximize purchases and conversions, rather than simply likes or impressions.
Multichannel attribution turned the corner last year when Google Analytics enabled a feature that allowed webmasters to begin to track conversions across multiple touch points, and not just at the point of last click. Facebook is finally catching up with this concept in its products as part of a longer-term development initiative.
Executives at Facebook recognize very well that social media is an integral, although often early stage, part of the consumer’s buying cycle. By facilitating multichannel attribution, Facebook will collect valuable data that help make the case for more media allocation from big brands and agencies. It will also position Facebook to become the preferred online marketing channel because this data will prove to be invaluable for marketing professionals.
The Big Picture In 2013
The best impression to leave a potential customer with is one of a connection between the brand and the individual. This is possible on Facebook where it may not have been before. The industry as a whole is coming back around to the days when your local store owner knew each customer individually and established a long-term relationship with them. Today’s business is moving away from the trend of mass-marketing and more toward personalization, in order to make consumers feel as though your product really is the best solution to suit their needs. As these trends continue, 2013 is set to be a banner year for advertising on Facebook, and an even better one for your ROI metrics.
Vernon Wharff is a marketing strategist at social technology company and Facebook Preferred Marketing Developer Ampush, and he regularly writes about Facebook advertising developments and trends for the Ampush Blog.