Facebook today announced that it will offer a self-service conversion measurement feature for direct response marketers and expand the capabilities of its Optimized CPM bidding option to incorporate conversion data.
Facebook tells us marketers will be able to use its tool to generate a unique bit of code to add to any page on their website where they want to measure conversions, for example, checkout pages or registration forms. When marketers choose Optimized CPM bidding, Facebook’s system will show ads to users who are most likely to convert.
Most significantly, this new tool will be available via the self-serve Facebook ad platform, which could help a range of advertisers improve their campaigns and see more results. Some of the social network’s top advertisers have been able to work with the company to do this type of conversion tracking for about a year, if not longer. Other large advertisers work with third-party ad companies to track and optimize their campaigns for conversions. This new tool will allow conversion tracking for smaller advertisers who are using Facebook ads to drive online actions.
For Facebook, it will be important to keep the process for the advertiser very simple and provide enough education about tracking and optimized bidding. The company tried implementing a conversion tracking tool in 2010, but ended the beta less than a year later. A Facebook engineer said the test resulted in a lot of confusion among advertisers and required too much overhead to provide user support. The company says the difference now is the combination of conversion measurement and Optimized CPM.
Facebook began testing the Optimized CPM bidding option late last year. The feature allows advertisers to set their marketing goals, and then have Facebook’s system automatically serve ads in a way that achieves those goals as efficiently as possible. Some advertisers are initially skeptical of this because it means they do not control their own bids, but Facebook says it can capture the highest-value impressions for an advertiser’s goals, and the total ROI on a campaign is likely to exceed that of either a CPC or a traditional CPM campaign. Fab.com, which beta tested Optimized CPM with conversion tracking, saw 39 percent lower costs per action using this type of bidding.
Preferred Marketing Developers who offer self-serve software or managed services for Facebook advertising typically have their own conversion tracking tools that go beyond the basic functionality Facebook is making available. Optimal CEO Rob Leathern says his company and other PMDs are focused on larger enterprise customers that need advanced features like view-based conversion and engagement tracking, server-side conversion tracking and return on ad spend metrics that consider conversion values like purchase price. Still, he’s glad to see Facebook taking steps to prove the value of its ads across the board.
“This is a positive development for everyone in the ecosystem. Any movements towards more accountability and the ability to track ROI will just lead to more ad spend and more activity in the Facebook ads ecosystem, so we welcome it,” Leathern says. He added, “We also allow companies to create their own completely flexible optimization rules that refer to any Facebook-supplied metrics (e.g. likes, video views, photo views, whatever), use Facebook’s bidding optimization or combine them, so this will add additional value for our customers.”