Study: Facebook Leads to 24% Sales Boost

Social network brings new users at lower cost, per Aggregate Knowledge

Supposedly social advertising doesn’t generate sales. But Media intelligence company Aggregate Knowledge, which analyzes and attributes media buys, says otherwise. In a study of 25 campaigns that ran during the fourth quarter, the company found that media plans that included Facebook saw 24 percent more new sales than those that didn't.

Aggregate Knowledge CEO David Jakubowski said the media plans with Facebook centered on using the social network’s premium ad units as the anchor with the marketplace ads running along the right rail in a supporting role to extend advertisers’ reach. In addition to Facebook, those media mixes typically included display, social, search and sometimes mobile Web and email, he said. Video also entered the fold at time, with that channel and Facebook “occupying the upper funnel,” said Jakubowski.

While Facebook has rolled out lower-funnel ad products such as the retargeting-oriented Facebook Exchange, Aggregate Knowledge saw the social network maintains its place atop the funnel. Forty-five percent of the total users reached in Q4 were unique to Facebook and not seen on other channels included in a media plan, according to Aggregate Knowledge. “Marketers marketing on Facebook are starting to get to people up the funnel in consideration sets,” Jakubowski said.

Facebook’s head of measurement and insights Brad Smallwood said Aggregate Knowledge’s findings are “pretty consistent with independent studies we run looking at offline transactions.” He pointed to one announced in October with Datalogix that indicated campaigns focused on reach saw a 70 percent higher ROI than those aimed at clicks.

Facebook was “very strong” when it came to channels that first encountered a user, Jakubowski said, but was not usually the last channel to see a user before they convert. That last-click attribution, for better or worse, is what helped Google establish a multibillion dollar advertising business. “Where Facebook gets last-touch credit is where it’s the only place on the planet that reached that user,” Jakubowski said. Facebook tends to factor in a couple days or weeks before a user converts, he noted. Smallwood emphasized that marketers shouldn’t look at Facebook in silo but consider an entire media mix and attribute success through multi-touch attribution.

However, Facebook has been correcting advertisers’ reliance on last-click attribution and adding ways for them to analyze its longer-term impact on conversions. For example, Aggregate Knowledge relied on Facebook’s view-through pixels for its study, Smallwood said. And last week Facebook modified its policies for preferred marketing developers to only require firms to separate Facebook reporting from other channels when using last-click attribution; otherwise PMDs have the new option to “show multi-touch attribution results side-by-side with last-click attribution results.”

Because Aggregate Knowledge is able to attribute Facebook’s impact on conversions through the view-through pixels, the firm was able to see that during Q4 Facebook delivered a 68 percent lower cost-per-acquisition than other channels, though Jakubowski declined to specific the average CPA advertisers saw on Facebook. “Facebook is a bargain right now. My customers would like to keep it that way,” he said.