From Keyword Targeting to People Targeting: Talking Performance Advertising with Facebook’s Tim Kendall

On Facebook, marketers have a variety of options when it comes to reaching Facebook’s 150 million active users. Advertisers can engage Facebook users through Facebook advertising solutions, applications on the Facebook Platform (either through Platform ad networks or rep firms or going direct), or guerilla-style activism.

In terms of Facebook’s own advertising solutions, while much attention has been paid to branded “engagement” campaigns that have been run in recent months, another important and growing part of Facebook’s advertising business is its performance ad system. Although performance advertising may not sound as sexy as sacrificing your friends for a hamburger, “tens of thousands” of advertisers are using Facebook’s performance ad system according to the company. Facebook’s self service tools allow advertisers to run campaigns on a CPC or CPM basis, and advertisers can drive traffic to either their own site or a Facebook Page.

In order to gain a deeper understanding of how Facebook sees its performance advertising business, we sat down with Tim Kendall, Facebook’s Director of Monetization and performance advertising head. Below, Tim shares his thoughts with us on Facebook’s positioning of performance ads in the marketplace, how performance advertisers are succeeding using Facebook’s solutions, and what messages about Facebook’s performance advertising opportunity are resonating with agencies today.

IF: Thanks for your time today Tim. Looking at your overall strategy, how does performance advertising fit into what you’re doing today?

TK: We like to think about it this way. If you think about the classic marketing funnel that’s very big at the top and very small at the bottom – where at the top you’re planting the notion of a brand in the consumer’s head, and at the bottom you’re delivering to a consumer who explicitly wants something, such as paid search – what’s happening at the bottom of that funnel is what we call demand fulfillment.  The guy at the top of the funnel may not even be thinking about photography if he’s on Yahoo Sports and sees a Canon banner ad. We believe that we play in the funnel above that threshold.

We don’t have people that come to the site to buy a digital camera, but we have a lot of users on the site who spend a lot of time on the site, and we think there’s a big opportunity for brand marketers to get broad reach and tell their story to those customers at the very top of the funnel. We can show an ad to people who have expressed an interest in photography. The next step down the funnel is where we see our performance marketing solution – toward the middle/bottom part of funnel.  We think there is a huge opportunity in latent demand right above the bottom part of the funnel.

What would you say are your core differentiators in that area?

Three reasons: 1) We have amazing reach, and we’re growing by a lot every day. The people who have the widest reach win the brand game. 2) We have a lot of information about you the user, because you’ve declared it to us so you can share it with your friends. We can look at your profile fields to determine your interests, and we can look at your status updates and know what your interests are today. 3) We know who you know. This is where we’re just starting to come out with a couple sets of offerings. The Social Ad offering takes into account the notion of who you’re friends with.

We think about both brand and performance together (but we have many marketers who come to us for one or the other). We think marketers increasingly want an end to end solution where you can first help them build their brand with large numbers of consumers, and then convert them into buyers. In terms of internal priorities, we view performance as equal to brand.

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