ROI vs. ROAS: How to Choose the Right Performance Metrics for Facebook

ROI vs. ROAS: How to Choose the Right Performance Metrics for Facebook

Over the past ten years, Facebook advertising has evolved from simple banner ads and listings to become a highly complex tool to target distinct demographics. Yet despite being one of the most common marketing tools out there, many marketers still misuse and miscalculate ROI and ROAS for Facebook ads, or have questions about the difference between ROAS and ROI, and how to optimize Facebook ROI and improve ROAS.

What is the difference between Facebook ROAS and Facebook ROI?

Facebook’s Return on Ad Spend (ROAS) measures the revenue generated as compared to the money spent on an advertising. ROAS is an advertising metric that measures the direct impact of dollars spent on advertising results and allows you to assess the performance of a campaign, without taking into consideration the additional costs of operations, training, etc. In order for a ROAS to be profitable, it has to been over 100%, as the initial 100% ROAS is recapping money spent.

Facebook’s Return on Investment (ROI) measures the return on your OVERALL investment and takes into consideration not only dollars spent, but the time, energy, labor, and intangible resources spent on generating this return. One could also argue that the “return” in this case goes beyond revenue created. It is a business metric, meaning that it measures not only the performance of an ad but the performance of your effort and your team.

We have an example of how to calculate the two later in this post, but let’s have a look at what the two actually measure.

What does ROI measure? What does ROAS measure?

In the table below I outline some of the things you may (or may not) figure into your marketing analytics to get a grip on your ROAS and your ROI.

ROI ROAS
Measures the result from money spent on: Measures the result from money spent on:
Market Research Advertising
Labor
Planning & Strategizing
Training
Creating
Advertising
Reporting
Office Space
Building Relationships
Building Organic Social Media Reach (which has a compounding effect)
Non-Billable Hours
etc.
And the return includes: And the return includes:
Market Share Revenue (minus cost of product, if applicable)
Reach
Revenue (minus cost of product, if applicable)
And remember: And remember:
Return on Investment will always consider the cost of product Your ROAS should consider the cost of product, but many people forget to do this, giving misleading results.

As you can tell, ROI measures a number of factors, and the “Return” in ROI could be defined in several ways (such as social media reach, profits, etc.), making this both the most wonderful and frustrating metric.

For more paid marketing metrics, check out our article on PPC KPIs that matter to a CMO, Director and Manager.

Is ROAS a good Facebook marketing metric?

As you can see above, the tricky thing about ROAS is that while it accurately presents the impact of your marketing dollars, it doesn’t accurately reflect the expense of the product or the marketing team, making it a much more beneficial metric for digital products than physical products.

In Google AdWords, it is possible to calculate dynamic variables (such as cost), but at the time being this isn’t possible in Facebook. Fortunately, by using Facebook Pixel you can start tracking consumer behavior on your website, giving you the necessary information to accurately assess your ROI.

How are Facebook ROI and Facebook ROAS calculated?

Here is how to calculate Facebook ROI:

ROI Formula: ROI = (Revenue – Costs) / Costs

Percent ROI = (Revenue – Costs) x (100 / Costs)

Here is how to calculate Facebook ROAS:

ROAS Formula: ROAS = Revenue / Cost

Percent ROAS = (Revenue – Cost) x (100/Cost)

The table above clearly illustrates the difference between ROI and ROAS, and how ROI can be negative while ROAS is positive. The ROAS for campaign 1 is .5, or 50%, which is not profitable. In order for the campaign to break even they would either have to lower their PPC bid by 50%, or improve their strategy to bring their ROAS higher than 1.

As ROAS is a simple ratio metric, it is possible for your ads to have a higher ROAS but generate less profit.

Campaign Ad Spend Revenue Profit ROAS
1 $9,000 $18,000 $9,000 2
2 $5,400 $12,600 $7,200 2.3

The misleading nature of ROAS

The next question that always comes up is: which is the better marketing analytic: ROI or ROAS? While I generally prefer ROI, there is a lot of value in understanding both and temporarily lowering ROI in order to optimize and increase long-term ROAS, and thus further improve ROI.

Allow me to illustrate:

A few years back I challenged a client to increase their sales by lowering their ROAS. Coming from a traditional background, he was convinced that larger ad budgets and greater exposure were the best ways to drive sales. But by paying a consultant, narrowing down their audience and temporarily lowering their ROAS, they were able to target more relevant clients and increase ROI in the long run. The second sample campaign took about five times as long to plan, had more employee costs, was 15x more per click and garnered 10,000 fewer likes, but it cost half as much and created a small but significant increase in sales and plugged them into an audience who loves to buy their products, rather than liking them.

pasted image 0

So you see, temporarily lowering your ROI and ROAS (or, you could say, temporarily investing more money in market research and making informed decisions about ad spend) can dramatically increase your ROI and make your marketing efforts more scalable.

Audience building is another place where focusing on decreasing your ROAS can drastically raise your ROI. As Nash Haywood talks about in this article on Facebook’s campaign budget optimization, by spending the extra time to sort out audience types by category and creating campaigns targeting them, you will avoid having Facebook’s algorithm will quickly skew towards the highest performing audience and sinking all of your money into that one audience. Your performance may temporarily suffer, but your results will thank you for it.

Using ROI to optimize your Facebook campaigns

Facebook campaign budget optimization (item #1 in The Performance Marketer’s Guide To Facebook’s Campaign Budget Optimization) automatically optimizes your advertising budget at a campaign level, but if you are only looking at ROAS without considering ROI, you’ll miss the fact that the automation is only going after low-hanging fruit. This, as well as teams with low efficiency and projects that require complex collateral, are invisible bottlenecks that may cost you in the long run. A 10% gain in high-value customers will be much harder to gain than a 30% increase in lower-value customers, but which is more important? And which has greater potential for long-term results?

Here’s another example:

In the fall of 2017, a company named Lingokids was running ads internationally and spending a significant amount of time creating and managing those ad sets. By understanding their true investment and adopting dynamic language optimization, they were able to reduce their workload while lowering their app install cost by 26% and increased conversions by 11%.

The big picture

So which is more important: ROI or ROAS? Many people assume that there is no significant difference between ROI and ROAS, but hopefully, after reading this article, you’ll not only understand the difference but also how to strategically use these two figures to optimize both your team’s performance and your advertising budget.

Ignoring the Funnel: The Unlikely Facebook Ads Strategies That Work

Ignoring the Funnel: The Unlikely Facebook Ads Strategies That Work

When it comes to Facebook Ads, there are a lot of tried-and-true practices that work for obvious reasons a vast majority of the time. But then there are those exciting welcoming challenges when you follow all the usual logic for a certain campaign type and it just. won’t. work.

Sound familiar? If not, the universe has been good to you, but don’t get too comfortable because there’s probably a failing campaign with your name on it lurking somewhere in the future.

The good news is, those initially frustrating situations can turn into experiments that produce valuable insight into alternatives for your go-to Facebook Ads strategy. Here’s a recent example of how I took a failing campaign, tried something new, and ended up with great results as well as an option to test in similar scenarios going forward [panic, hair pulling, and expletives omitted].

What Usually Works

When setting up Facebook campaigns, it’s generally agreed that you should tailor your strategy to where your audience is at in the funnel, especially with cold audiences because — let’s be honest — nobody likes it when you come on too strong. So we often play it safe, send them to a landing page, and decide to be more forward another time.

That’s all well and good, but what if you end up with a campaign that, despite following all the best practices, is just floundering even though others like it are doing just fine? That’s exactly what happened when I started working with a client that had a particular campaign that was doing far worse than all the others.

So… Now What?

The client’s goal with Facebook Ads was to increase awareness and drive website traffic to learn more, then ultimately convert website visitors through an on-page lead generation form to “Get A Free Estimate.”  Most of the cold audience campaigns optimizing for link clicks were converting well with healthy engagement and higher CTR’s, so we figured, why not just see what happens if instead, we switch the failing campaign to optimize for conversions?

giphy

Turns out, there are some instances when going against the common optimization method for a colder audience can help your campaigns succeed.

Tell Me More

By changing the optimization from link clicks to conversions, we saw huge results in just 10 days. The chart below shows how the campaign was performing in the first 10 days of the month prior to making the switch, with our test window from Jan 11-20 below for comparison.

facebook campaign analytics spreadsheet

We managed to increase the client’s lead volume by 1800%, while lowering cost per lead (CPL) by 94% and increasing the campaign’s conversion rate (CVR) by a whopping 2662% — in a matter of days.

Because we started optimizing for conversions instead of clicks, we saw an anticipated CTR decrease of 23%. However, the lift in lead volume and CVR more than made up for it, along with the drastic decrease in CPL from $366 to $20. All of that, plus no drastic effects on impressions or spend.

Why such a dramatic change? When optimizing for traffic, Facebook shows your ads to the people in your target audience that are most likely to click the link to your landing page at the lowest cost, whereas a conversion setup delivers ads to people in your target audience that will drive the most website conversions. Sure, it makes perfect sense. However, it can prove beneficial to skip ahead to conversions when testing top of the funnel audiences.

What Does That Mean for Me?

Given how quickly we saw a performance increase as a result of this test, we’ve started implementing this alternative optimization tactic to cold audiences in other campaigns and are seeing improvement there as well. While CTR and engagement have also decreased in those instances, we’ve been able to achieve our goal of acquiring relevant sales leads in a much shorter time period.

While this strategy worked well for this particular client, there’s no guarantee that it will work for all others. Keep this option in your back pocket if you have underperforming campaigns — or have a few that might be good candidates based on the trends you’re seeing. Just remember, expect to see a tradeoff in CTR and engagement with this approach, but it’s well worth the try if there’s a chance it will pay off in conversions.

Even if this exact approach isn’t one that would work for you, hopefully, it gets you thinking about ways you might find success if you’re willing to test a few theories that defy conventional wisdom.

5 Ways Facebook Analytics Beats Google Analytics

Posted by in Analytics, Facebook
5 Ways Facebook Analytics Beats Google Analytics

Are you taking advantage of Facebook Analytics? What if I told you that it may be better than Google Analytics at measuring and analyzing your audience?

Facebook continues to provide marketers with the tools they need to be successful. With the addition of Facebook Analytics, they’re closing the gap on measuring actions taken in the News Feed to what happens on company websites, apps, and brick and mortar stores. They’re tying all these channels together to provide marketers with an omni-channel measurement and analytics tool. And it’s awesome!

Yet, the adoption rate of Facebook Analytics among marketers appears to be low (at least amongst my circle of paid social friends). I’ve been playing around with Facebook Analytics since it came out and it’s powerful! You can build audience cohorts, retention models, and revenue funnels with a few clicks.

Have I stopped using Google Analytics? No. But I’m definitely in Facebook Analytics a lot more learning how people are interacting with our content, our Page, Messenger bot, and more.

What is Facebook Analytics?

According to Facebook,

Facebook Analytics allows you to measure, understand, and optimize the interactions people have with your business across both devices and channels to help drive meaningful growth. With over 2 billion people on Facebook, our analytics solution provides rich, unique audience insights, powerful reports like conversion funnels and retention curves, and automated insights.

Facebook is directly tying activity on it’s properties to actual business revenue. This is huge for marketers. Your marketing goals shouldn’t be tied to single channels anymore, because people interact with your business across channels like your website, Facebook Page, Twitter, email campaigns, and in-store visits. Understanding how those interactions happen is key to creating the right user experiences, measuring omni-channel performance, and scaling growth across your marketing campaigns.

Here are five areas where Facebook Analytics is better than Google Analytics.

1) The Focus on People, Not Devices

Google Analytics is great at tracking devices, but not necessarily the person behind them. For example, when I visit a website on my phone and again on my desktop computer, Google Analytics sees me as two different users. That’s a tough pill to swallow for companies running a lot of social media companies. Why?

Because mobile ads accounted for 89% of Facebook’s ad revenue during Q4’17. In other words, the vast majority of traffic coming from Facebook is on a mobile device. And for most companies, people still convert on desktop. Thus, making it difficult to track Facebook campaign attribution in Google Analytics.

In contrast, Facebook Analytics is able to stitch together who you are by using your Facebook login and enriching your profile with activities from other third-party data. More importantly, Facebook Analytics focuses on people, rather than cookies, sessions, or devices.

This allows marketers to understand when the same person interacts with their business across different channels and devices. Marketers can now easily measure and unify people’s behavior without any additional work or hassle, such as manually assigning and mapping user IDs in data warehouses.

Facebook Analytics Overview Dashboard

2) Cross-Device Measurement and Analytics

Facebook’s omni-channel analytics makes it easy to monitor activity across devices and get a complete view of the customer journey. Facebook Analytics has many reports that can help you better understand your customers and their behavior across devices and channels, including:

  1. Funnels – Funnels allow you to monitor people’s journey’s through your experiences – whether that’s an e-commerce checkout experience, registration or sign up process, or how far people make it through your New User Experience (NUX). Funnels are the best way to identify where you should spend your resources and optimize your app.
  2. Cohorts – After acquisition, retention is the other half of the growth equation. Cohorts are the way to understand how well you’re retaining your users and, more importantly, how changes to your app are affecting that retention. With Facebook Analytics behavioral cohorts, we can even look at how changes to your app affect Lifetime Value (LTV) or any other event you care about.
  3. Segments – To really understand your users you need to zoom and understand different audiences. Whether that’s seeing the demographics of your top performing customers by value or seeing how well a particular demographic converts in your funnels (segmentation is supported on most reports in Facebook Analytics).

For example, a university could build a funnel to measure the amount of people who commented on a particular Page post and then requested degree information on their website. Tracking Facebook Page activity to website leads/purchases should have marketers saying, “giddy up.”

seinfeld giddy up

3) Events Source Groups (ESGs)

A newer feature in Facebook Analytics is the ability to unify your website, app, Page, Messenger, and more into one global view. ESGs are two or more of your event sources (like Messenger, website, your mobile app, or your Facebook Page) grouped and given a name. ESGs have their own dashboard in Facebook Analytics, and let you see user behavior and interactions across the sources you group together.

Facebook Analytics Events Source Groups

Marketers can now aggregate, measure, and visualize people’s actions across both devices and channels, including your website, app, Facebook Page, and offline events to optimize campaign conversions and even retention. They’re calling this omni-channel analytics as it spans across Facebook’s family of apps and services with the addition of your website, bot, and offline events.

4) Omni-Channel Custom Audiences

Seamlessly create custom audiences from your apps, websites, and bots, and target them with Facebook ad campaigns. This is really cool and something I haven’t heard many paid social people talking about.

Think about all the ways you can organize your custom audience groupings for deeper user segmentation. Again in Google Analytics, you can create very advanced audience segments, but you’re really limited to only website visitors by device. We can’t combine other Google properties and apps like Gmail and Maps into one holistic view.

This is why this feature is powerful for marketers to understand and utilize to drive the right messages at the right time. Keep in mind that you can’t create a custom audience if your Facebook Page is included in your Event Source Group. You’ll have to create Page audiences using the Audiences tab in Ads Manager.

Facebook Custom Audience in Analytics

5) Automated Insights (beta)

Using advanced machine learning, Facebook Analytics reduces the time spent searching for clues by bringing valuable insights directly to you.

Facebook Analytics Automated Insights surfaces valuable data and trends to help you focus your efforts and keep your business moving forward. This is similar to the Google AdWords opportunities tab where they’re surfacing insights quickly and easily for marketers to understand audience performance.

Facebook Analytics Automated Insights Beta

They breakout insights by device, age, location, and more. Pretty cool to see these granular user trends going up and down as it’s not something we usually think about.

Summary

By closing the loop between your online and offline channels, you won’t have to wonder if people browsing items on your website or commenting on a Facebook Page post translates into sales in your store. Be sure to also check out the Complete Guide to Facebook Analytics for more information. And be sure to like their Facebook page and follow them on Twitter for the latest updates.

Go check out what Facebook Analytics has to offer and let me know what you think!

AdWords CTA - Q4 BENCHMARK REPORT_v2

 

The Performance Marketer’s Guide To Facebook’s Campaign Budget Optimization

Posted by in Facebook, Social
The Performance Marketer’s Guide To Facebook’s Campaign Budget Optimization

Part 1 – Facebook Campaign Budget Optimization (CBO) Basics

Part 2 – Choosing An Effective Account Structure for Campaign Budget Optimization

 – Example Account Structure

Part 3 – Strategies To Improve ROI With Campaign Budget Optimization

Closing Thoughts

I joined JD a few months ago on the PPC Show podcast to talk about my experience using Facebook’s campaign budget optimization feature which was (at the time) just starting to be released to advertisers. After spending over $400,000 on campaigns with Facebook’s campaign budget optimization enabled in the last few months, I believe it is one of the ad platform’s most impactful changes ever, allowing advertisers to truly scale their campaigns with ease.

While Facebook still has this release in beta (as of the publish date of this article), it has proven to work very well across a wide range of audiences and industries. This guide will cover insights gained while working with this functionality on large-scale campaigns using the lead generation and conversion campaign objectives.

Part 1. Facebook Campaign Budget Optimization (CBO) Basics

Facebook’s launch of the campaign budget optimization provides direct response marketers an automated way to leverage Facebook’s predictive bidding to scale their conversion volume across multiple ad sets. Balancing budgets to maximize ROI is one of the most important tasks a paid media manager can focus on — and with Facebook now handling this aspect of campaigns, it frees advertisers to focus on more strategic campaign components like ad content, targeting and landing pages.

What does Facebook Campaign Budget Optimization do?

This new functionality allows you to set a daily or lifetime budget at the campaign level and give Facebook the control to move budget between your contained ad sets to find the best performance based on your goals. At a basic level, Facebook automatically prioritizes what it believes will be your top performing audiences and then moves on to other audiences once the current one is “exhausted.”

How do I activate Campaign Budget Optimization?

Using campaign budget optimization is easy and can be activated on the campaign settings for any new campaign. It can not be applied to existing campaigns that were running before this option was enabled for the account. Simply click on the toggle option to optimize budget across ad sets when initially setting up your campaign and create your ad sets as you normally would.

facebook campaign optimizationWho should use Campaign Budget Optimization?

The core functionality of campaign budget optimization is built for advertisers who are looking to scale their program performance. Advertisers with hypotheses about specific audiences can now use Facebook’s predictive bidding to see which will result in more conversions. With this in mind, it is perfect for advertisers who are looking to test and find new ways to expand their campaign reach while also maintaining performance.

Are there limitations for advertisers?

Because Facebook will be automating some aspects of your campaign, there will be some platform limitations in place (at least for the beta) that you should be aware of. You are unable to daypart, use accelerated delivery or make changes to bid strategy once a campaign is published.

Additionally, you cannot use import and export functionality with Power Editor to build campaigns from a template. While these aren’t deal breakers by any means, these limitations may hinder the use of other more advanced strategies.

When should I not use CBO?

There are a few situations when using campaign budget optimization is not recommended, primarily for short-term campaigns of less than a week or campaigns with only one target audience. Because Facebook’s bidding engine needs time to “ramp up” and collect data while using CBO to really be effective (just like standard campaigns), it’s best to make sure there is ample time to build a conversion history that can ultimately improve campaign performance.

Further, if you have audiences and campaigns that have historically performed very well for you, keeping those in a standard campaign can be a very smart move, as you will have the ability to optimize those audiences independently of separate CBO-enabled campaigns.

Part 2. Choosing An Effective Account Structure for Campaign Budget Optimization

One of the most important things to understand when working with this functionality is that it will change how you structure your entire account. With budgets being managed only at the campaign level with contained audiences now going “head-to-head,” there are a number of considerations in how and when to use CBO most effectively.

Focus on conversion-based campaign types

After running across multiple Facebook Ads Objectives, it is clear that campaign budget optimization was made for performance marketers. While I have not tested CBO extensively with engagement-based campaigns, I can say that when testing with Reach and Awareness objective campaigns, the budget was not always allocated toward the top performer of the campaigns’ primary metric (CPM and Reach CPM).

Avoid placing “significantly different” audiences in the same campaign

You likely already have different types of audiences and offers that are converting well across your account in multiple areas of the funnel. In a standard campaign, grouping these together in different ad sets is not a problem because each ad set functions independently of the others. But with CBO, this is not the case.

When using campaign budget optimization you should avoid putting disparate audience types such as lookalikes, retargeting and interest-based segments into a single campaign. When this happens, budgets will very quickly skew toward what Facebook’s bidding algorithm assumes will be the highest performing audience. This essentially defeats the purpose of using campaign budget optimization because a single audience type will more often outperform the others. As the optimization engine looks to test the other audiences, it doesn’t see better performance and stays “locked in” to your top performer because it is still most likely to drive the lowest CPA.

Group custom audiences of similar types together

Instead, when building campaigns with CBO enabled, make sure your audiences are similar and group multiple custom audiences of the same type such as engagement, CRM-based audiences, and retargeting in the same campaign. With the likelihood that these audiences will perform similarly high, you can be confident that Facebook’s bidding engine will perform the way it was intended to, allocating budgets appropriately.

Group audiences of similar sizes together

During testing, I found that my optimal campaign was around 6 ad sets, each with “somewhat similar” audience sizes of approximately under 500k, 500k to 1 million or 1M+, respectively.

The reason for using a similar audience size across your ad sets? Smaller audiences will more quickly exhaust their lower cost conversions, moving on to the larger audiences within just a few days or a week. Grouping similar audience sizes will result in smoother delivery and less campaign “turbulence” when increasing budgets or running a campaign over longer periods of time.

Leverage single audience ad sets (SAAS) to isolate your top performers and scale

Using campaign budget optimization as a testing ground for new audiences can be a great strategy. One of the best ways to accomplish this is by testing each audience segment individually in its own ad set, also known as “single audience ad sets,” or SAAS.

Similar to the paid search strategy of using single keyword ad groups, both the SAAS and SKAG campaign structures allow you to isolate the targeting variable that is responsible for your conversions and build your ideal targeting, personalized ad content, and landing page combination to drive results.

An ideal process for scaling your conversions with CBO and SAAS involves 2 steps:

  • Step 1 – Use campaign budget optimization to test new audiences of any type (interest, lookalike, custom) and see which perform well.
  • Step 2 – Once you find a high-performing audience segment, pause it in the CBO campaign and then place it into its own standard campaign with a unique ad set. This allows you to identify audiences that will perform well in their own campaign, in which you can then test different aspects of your funnel (ads, landing pages, bid strategies) more effectively than as part of a CBO-enabled campaign.

Use a dedicated lookalike campaign to find incremental conversions

Many Facebook Ads practitioners leverage lookalike audiences to scale their campaigns and overall conversion volume. I found that lookalike audiences perform exceptionally well when grouped with other percentage-based audiences of the same seed audience in a CBO-enabled campaign.

By creating numerous lookalikes from the same audience segment at different percentages (1%, 1-2%, 2-3%, etc.) and excluding them from each other to avoid audience overlap, you can easily create a lookalike campaign with an audience size of 10 million. In numerous tests, this type of campaign structure started to grow quickly in conversion volume after the learning period was completed as the algorithm had the flexibility to move between much larger groups of people with ease.

Example Account Structure

Campaign 1 (Standard)  – Top Performers

  • Retargeting Audience 1
  • Retargeting Audience 2
  • Top Performing Interest 1
  • Top Performing Interest 2
  • CRM Segment
  • Engagement Segment

Campaign 2 (CBO) – Lookalike Segment

  • Lookalike Segment A – 1%
  • Lookalike Segment A – 1-2%
  • Lookalike Segment A – 2-3%
  • Lookalike Segment A – 3-4%
  • Lookalike Segment A – 4-5%

Campaign 3 (CBO) – Interest

  • Interest Audience A
  • Interest Audience B
  • Interest Audience C
  • Interest Audience D

Part 3. Strategies To Improve ROI With Campaign Budget Optimization

Most best practices for Facebook Ads still apply when using CBO, but marketers should pay careful attention to the way in which CBO works in relation to other ad sets in the campaign. With Facebook now reallocating your budget to maximize ROI, you can focus on other improvements that can drive your performance even higher.

Push the Facebook Pixel more data by tagging “soft” conversion events

Tagging both standard and custom events is a must for every Facebook Ads account. For CBO-enabled campaigns, this is even more critical. I found that CBO worked well when using a single standard conversion event such as lead or registration, but it was even more effective when other soft conversions events such as button clicks or page scroll depth were tracked but not optimized to.

If you are looking to take your campaign to the next level, give the pixel more data by including additional custom events. These will help improve decision-making for the overall optimization engine, which more accurately informs where Facebook will reallocate your budget to get you the best results.

Understand that your learning period still exists across all ad sets in your campaign

No matter what, Facebook needs time to understand your audience, your conversion goals, and the attributes of your pixel’s converting users to really tune its optimization engine. Facebook states that “your ad set needs about 50 conversions per week for our delivery system to learn who it’s best to show your ads to” and this still applies to campaigns that are using campaign budget optimization.

If your campaign has only 1 or 2 unique ad sets that are driving results, it can be hard for other audiences to start converting. In some cases, this may not be ideal — so if you value results more from some ad sets (read: audiences) over another, Facebook suggests that you control this “through appropriate bid caps or cost targets” instead of using ad set spend limits, which may affect the automatic bidding strategy. The image below from the Facebook UI shows exactly show to control this.

Facebook UI - Budget Optimization

Build your budget toward a goal of 50 conversions per week per ad set

There’s no doubt that the use of CBO is effective when used correctly. One easy way to get off track is by having a limited budget or too many ad sets. Campaign budgets should be large enough to equally distribute across your campaign ad sets with a daily budget that is capable of driving the minimum recommended conversions (50 or more) per week as discussed above.

Facebook’s own site states:

“campaign budget optimization works best when all ad sets in a campaign could spend a full budget, but we get to pick only the best results from each one.”

Placing too little daily budget on the campaign will leave your campaigns restricted and less likely to unlock the full potential of the budget optimization settings.

Regularly flight new ad creative across all ad sets in your campaigns

With a new feature like campaign budget optimization active, your strategy is likely more focused on how to use it most effectively. I found one of the best ways to maintain performance across a CBO-enabled campaign was still to flight new ads regularly. AdStage excels at automated ad flighting, and using it with campaign budget optimization is a great way to make your campaigns continue to drive results.

Closing Thoughts

Using Facebook’s campaign budget optimization feature over the past few months has helped me to reevaluate my process for testing new audiences, budget for top performing segments, and scale overall conversion volume quickly and effectively.

Not only did CBO perform better across dozens of campaigns, but I spent less time allocating budget to top-performing audiences, which allowed me to focus on ad copy, audiences and landing page content—all of which had a positive effect on campaign performance.

What Facebook has done with this campaign budget optimization is truly impressive and it is apparent that the product team will continue to build core features for the benefit of its direct response advertisers. As with any new platform functionality, your campaigns will be subject to trial and error but hopefully, the learnings outlined above can help you take steps toward better ROI and improved campaign performance.

Facebook Ads CPM, CPC, & CTR Benchmarks for Q4 2017

Facebook Ads CPM, CPC, & CTR Benchmarks for Q4 2017

For Q4 2017, we’ve analyzed over 1.7 billion Facebook ad impressions across 1700+ unique accounts in US currency to uncover the average CPM, CPC, and CTR. Compared to Q3’17, we found the average CPM for Facebook ads increased by 37%, the average CPC for Facebook ads increased by 14%, and the average CTR for Facebook ads increased by 25%.

Facebook Ads Benchmarks – Q4 2017

  • The average Facebook ads CPM was $12.45
  • The average Facebook ads CPC was $0.54
  • The average Facebook ads CTR was 2.34%

Facebook Q4 2017 CPM, CPC, and CTR Benchmarks

Be sure to view the Q4 Paid Search and Paid Social ads Benchmark Report for the latest trends.

Facebook News Feed & Right Hand Column Benchmarks for Q4 2017

Facebook CPM Increased 37% in Q4

Based on AdStage data, Facebook Ad CPM increased by 37% from $9.06 in Q3 to $12.45 in Q4. The 2017 trend shows that Facebook Ad CPM increased 110% from $5.93 to $12.45 comparing Q1 to Q4.


Facebook CPC Increased 14% in Q4

Facebook CPC increased 14% in Q4 to an overall average of $0.54. The 2017 trend shows that Facebook CPC increased 109% from Q1 to Q4.


Facebook CTR Increased 25% in Q4

Facebook advertisers saw a positive CTR increase of 24% from 1.92% in Q3 to 2.39% in Q4. The 2017 trend shows that Facebook CTR increased in Q4, recovering from mid-year lower average CTRs. Year over year CTRs are relatively flat at -2%.


Facebook Audience Network Benchmarks

In Q4, we analyzed over 268 million Facebook Audience Network ad impressions. Compared to Q3’17, the average CPM on Facebook Audience Network decreased 8%, the average CPC on Facebook Audience Network decreased 4%, and the average CTR for Facebook Audience Network decreased 5%.

Facebook Audience Network Benchmarks – Q4 2017

  • The average CPM for Facebook Audience Network was $3.77
  • The average CPC for Facebook Audience Network was $0.27
  • The average CTR for Facebook Audience Network was 1.42%

Facebook Audience Network Q4 2017 CPM, CPC, and CTR Benchmarks

Facebook Audience Network CPM Decreased 8% in Q4

Based on AdStage data, FAN CPMs decreased by 8% from $4.08 in Q3 to $3.77 in Q4. The 2017 trend shows that Facebook Audience Network CPM increased 14% from $3.32 to $3.77 comparing Q1 to Q4.


Facebook Audience Network CPC Decreased 4% in Q4

The CPCs of Facebook Audience Network ads decreased from $0.28 in Q3’17 to $0.27 Q4’17. The 2017 trend shows that FAN CPC increased 116% from $0.13 to $0.27 comparing Q1 to Q4.


Facebook Audience Network CTR Decreased 5% in Q4

Advertisers are getting a consistent CTR from Q3 to Q4 with only a minor decrease from 1.49% to 1.42%. The 2017 trend shows that CTR has dropped 47% from 2.68% to 1.42% comparing Q1 to Q4.


Facebook Ads Q4 Trends

There were three factors that are worth calling out as they relate to Facebook ad results. According to Facebook’s Q4 earning call, the network made algorithm tweaks resulting in a 5% drop in the total amount of time users spent on the social network.

Facebook also reported its first-ever decline in daily users in the U.S. and Canada. In Q3 the network had 185 million daily users in this region and in Q4 it dropped down to 184 million.

Lastly, the number of Facebook advertisers grew to over six million at the end September 2017. That’s over 1 million new advertisers from March 2017. Based on that growth plus the holiday season, we can surmise that Facebook added more advertisers in Q4.

Take these three factors together and it’s easy to see why the ads auction is so competitive and further illustrates Facebook’s ad load capacity is maxed out. That said, the results must be positive as budgets on the social network saw a 26% increase in Q4 compared to Q3 according to AdStage data.

Looking forward into 2018, Facebook will play a bigger role in paid marketer’s mobile strategy. I predict Facebook marketers will turn to Instagram ads to drive conversions, experiment with Messenger ads to start conversations, and turn to offline conversions to measure business impact. Check out expert Facebook predictions for 2018.

Check out other ad networks

Get the Q4 Paid Search and Paid Social ads Benchmark Report for the latest trends across all major ad networks.

FB CTA - Q4 BENCHMARK REPORT

Should You Pay For Social Media?

Posted by in Social
Should You Pay For Social Media?

“Should I pay for social media?”

It’s a question we hear a lot. And while there was a time when social media could successfully be done for free, that time is probably over.

Still, if you’ve absolutely no budget, you can still get some traction from social media. But any company that really wants to make progress will find it easier and more effective to spend a little money.

Here’s why the age of free social media is basically over.

1. Facebook’s organic reach is basically zero.

If you’re reading this blog, you almost certainly know that we recently got hit with another major change on Facebook. On January 11th, Mark Zuckerberg announced that the company is “making a major change to how we build Facebook.” He continued:

The first changes you’ll see will be in News Feed, where you can expect to see more from your friends, family and groups.

As we roll this out, you’ll see less public content like posts from businesses, brands, and media. And the public content you see more will be held to the same standard — it should encourage meaningful interactions between people.

That means (among other things) that Facebook’s already slim organic reach will fall to basically zero. Even if you have thousands of followers, probably only a dozen or so of them will see your posts on a regular basis.

Organic reach has been falling rapidly over the last few years, but as the Wall Street Journal said of this most recent announcement, this change will basically be “the nail in the coffin” of organic reach. Even before this announcement, organic reach for most brands was below 1%.

So if you want people to see your content on Facebook now, you’re basically going to have to pay for it.

2. Facebook’s referral traffic has dropped in the last year.

Facebook is still giving Google an excellent run for its money when it comes to referral traffic. But Facebook also tends to prefer content that keeps people on their site.

facebook publisher referral traffic

And so if you want traffic to your website, and you want that traffic to be from Facebook, you may need to pay for it. Or you’re going to have to work harder and smarter than ever before (so you’ll pay in time and effort rather than money).

3. As other social media sites get more crowded, they too will require some spending if you want to get your content seen.

There’s more to social media than Facebook, of course (though it is the 800-pound gorilla of social media). LinkedIn is important – it’s essential for B2B marketers. And Instagram is developing rapidly and is already a powerhouse. And then there’s Twitter, YouTube, and Pinterest, all of which can work beautifully for specialized audiences.

But as these platforms become more competitive, they will also require some spending if you want to get more of your content seen. And in terms of referral traffic, they’re still dwarfed by Facebook.

FacebookGoogleReferral Traffic

Basically, as ad inventory gets tighter and costs rise on Facebook (CPMs were up 171% just last year!), it only makes sense that advertisers will begin testing other platforms.

That’s going to drive up costs. And so even if you can get leads on LinkedIn for $40-60 now, by the end of 2018, you’ll probably be paying more.

Facebook CPM Increase

Facebook’s advertising costs are skyrocketing, as ad inventories dwindle. That could drive advertisers to other platforms and increase advertising costs.

4. Social media is complex enough that even if you can’t afford advertising, you should invest in a scheduling and analytics tool.

It is true that almost every social media platform has basic scheduling functionality. And they all offer analytics reports.

But managing these on a platform-by-platform basis is difficult. If your time is worth more than a few dollars per hour to you, it’s smart to spend some budget on a good scheduling and marketing analytics tool (or tools). Social media is just too complex now to be doing it 100% manually.

How to Pay Less for Social Media

So does all that mean that you can’t do social media without spending money? Well, no. But it will be far easier and you’ll get better results if you can afford to spend some money.

The operative word there is “some”. You don’t necessarily need a huge budget. Especially if you do this to keep costs down:

1. Try new things.

Early adopters can do well on social media. Very well. Right now, there’s a major opportunity with Facebook Messenger for marketers who are willing to test. Our Ultimate Guide to Facebook Messenger Ads can show you how to get started with the advertising part. But you can do Messenger marketing without advertising, too.

Messenger Examples

Hundreds of thousands of companies, bots and people are on Messenger. If you’re not there yet, it’s time to start experimenting.

2. Boost what works.

There are still plenty examples of “viral” campaigns on social media. And even if your posts don’t quite achieve full viral glory, usually there’s a post or two every week or so that just does better than average. Every marketer gets lucky once in a while.

We suggest you boost those posts.

This means you’ll sacrifice some control, of course. But social media isn’t straight-up old-style advertising. We can’t just broadcast any old message (unless you want to blow your budget). But we can “ride the wave” of popular content.

So consider investing what advertising budget you do have in posts that just naturally work. Work with the algorithms, rather than trying to force messages and posts that people just don’t care about.

3. Publish more of what works.

If your budget is small, you may have to invest more time and creativity into your posts than your more affluent competitors do. You’ll pay in time and effort rather than paying in dollars.

As Michelle Morgan, Director of Client Services at Clix Marketing says in our blog post, “Top 2018 Facebook Ads Predictions from the Experts” :

Whether it’s creating a new conversion type for a lead generation company, being more appealing with your ad copy doing a better job of not over-saturating your audience, or creating a retargeting funnel, there are many ways to get more creative with your advertising; and 2018 is the year you’ll have to flex those muscles to get the returns you need.

User-generated content can do particularly well on social media. And now that Facebook’s News Feed will be more tuned to posts from friends and family, user-generated content may do even better.

So step back from pushing content that exclusively serves your brand. Try to stoke some fun and get more responses from your fans. Like the pet retailer Chewy has done here with their doggy yoga post:

chewy social media examples

4. Think outside the advertising box

Still not sure you can scare up enough budget to employ even those low-budget tactics? Don’t worry – and don’t abandon social. There are important things you can still do (and should do) on social media that don’t require a dime of advertising.

Namely:

·          Customer service.

Consumers expect a response to any complaint or request made on social media. And usually, they expect those responses fast.

Customer service is typically done through Facebook or Twitter. But because these messages are direct, you don’t have to spend any money to communicate with people. And if you can respond to social media customer service messages fast (Check our Nest’s Twitter page for inspiration), you’ll keep existing customers and show prospective customers just how good you are.

twitter customer service example

Most consumers expect a quick reply to customer service issues on Twitter.

·          Give prospective employees an idea of what you’d be like to work for.

Hiring isn’t the first thing we think of when we think about social media, but your social media feeds can definitely help with it.

Instagram is particularly good for sharing in-office photos, but Facebook and Twitter are worth trying, too.

Instagram ads examples

You may not get a lot of engagement for these types of shares, but it only takes a handful of prospective employees to see them to make these posts worthwhile. Source: Instagram

5. Use your social media posts to supplement your email newsletters or your blog.

Do you stress about what to put in your email newsletters? Stress no more: Social can save your bacon. Just use some of your social media posts to flesh out the empty spaces in your emails.

Actually, you could see your social media posts as a way to test content for your email newsletter audience. Just repurpose your most popular posts from the last week into your email newsletter.

Voilà: You’ll have plenty of content – and top-performing content, too. And that means more email engagement.

DKNGStudiosEmailAndSocial

DKNG Studios has plenty of content for their email newsletters thanks to their social media posts. Source: ReallyGoodEmails

Conclusion

Honestly, you’re going to pay for your social media engagement one way or another. It’s just a question of whether you’ll pay for it in money, or you’ll pay for it in time and effort.

That said, you can still cut your costs, both in terms of money and in terms of time and effort. Just get smart about reusing content, and use what advertising budget you do have to boost what’s already working.

Or start to pay more attention to your social media reports. With a good analytics tool, you’ll be able to see what works for your audience much more clearly. And that means you can serve up content that’s more successful – whether you decide to boost it with advertising or not.

 

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2017 in Review: AdStage’s Top 5 Articles on Facebook Ads

Posted by in PPC News
2017 in Review: AdStage’s Top 5 Articles on Facebook Ads

2017 has been a busy year for Facebook advertisers. From revamping the Ad Manager and adding Lifestyle templates to reducing audience targeting options and creating new guidelines to increase transparency and fight ad fraud, Facebook kept us on our toes.

So what were Facebook marketers reading to stay on top of their game in 2017? As we head into 2018, we’ve gathered five of our best-shared articles on Facebook Ads. It’s clear that there’s a real thirst for content that brings you data to benchmark your campaign success, explore new opportunities for growth, and learn from top paid marketers in the field.

No matter what new changes and challenges Facebook throws at you in 2018, these five articles will make you a better PPC marketer. Happy reading!

1. Facebook CPMs Increase 171% in 2017

We’ve analyzed over 8.8 billion Facebook ad impressions and found that during the first six months, the average CPM increased from $4.12 to $11.17, and the average CPC increased from $0.42 to $0.99. Read this article to learn this year’s benchmarks and expert commentary.

2. Quick Guide to the New Facebook Delivery Insights

Ever wonder if your ads are competing for visibility in the Facebook auction? Or how much they’re competing against each other? This article will show you how to use Facebook’s Delivery Insights to understand the performance of your ad sets and allocate your budget wisely.

3. The Ultimate Guide to Facebook Messenger Ads

Was 2017 yet another year of mobile? Another milestone for mobile, for sure, and definitely a very good year for messaging apps. So much that the combined user base of Whatsapp, Messenger, WeChat, and Viber has grown larger than the combined user base of Facebook, Instagram, Twitter, and LinkedIn. In this article, you’ll learn how to navigate Messenger Ads and use chatbots to grow your business.

4. Quick Guide to Facebook Offline Conversions

In 2017, attribution remained one of the toughest parts of the marketing cycle to measure. With Facebook Offline Conversions, you can connect your CRM, Marketing Automation, POS, or call center system to your Facebook ad campaigns, essentially closing the loop between digitally-captured lead and a non-digital conversion such as a sales conversation. Read this article to see how to set up Facebook Offline Conversions.

5. Top 2018 Facebook Ads Predictions from the Experts

What’s in store for Facebook marketers as we head into 2018? As we look ahead to 2018, we chatted with top paid marketers about the PPC trends that will matter the most in 2018. The experts predict that Facebook marketers will turn to Instagram ads to drive conversions, experiment with Messenger ads to start conversations, and turn to offline conversions to measure business impact.

Sign up for our newsletter to stay on top of all things paid social in 2018.

 

 

Top 2018 Facebook Ads Predictions from the Experts

Posted by in PPC News, Social
Top 2018 Facebook Ads Predictions from the Experts

Can we agree that we’re spending more time on our phones? We can’t get enough of these pocket-sized computers.

The average American spends more than two hours a day on their mobile device, with 50% of their app time in their most-used app, and almost 80% in their top three apps, according to comScore. And of those 140 minutes spent on our phones, 50 minutes are spent across Facebook apps (Facebook, Instagram, and Messenger).

Moving forward, Facebook will play a bigger role in marketer’s mobile strategy. That said, what’s in store for Facebook marketers as we head into 2018?

I predict Facebook marketers will turn to Instagram ads to drive conversions, experiment with Messenger ads to start conversations, and turn to offline conversions to measure business impact.

A Pipeline of Advertisers Headed Straight to Instagram

One reason for Instagram’s rapid adoption among advertisers is the pipeline of 5 million active advertisers on Facebook. As Facebook faces ad load saturation on its main app, marketers have more reasons to experiment with Instagram advertising. Facebook can provide the same targeting capabilities on Instagram, but there’s a growing number of ad types and more available inventory on Instagram for advertisers to drive conversions.

Instagram Ad Types

Driving Conversations With Messenger Ads

Figuring out how to stay in front of audiences is always top-of-mind for marketers. With Facebook pouring more resources into monetizing Messenger, I predict marketers will be enticed with more ad types and variations in 2018. And with a push for more adoption of the Messenger platform, expect that payment processes will get easier and more efficient. To learn more about how to get started check out the Ultimate Guide to Messenger Ads.

Measuring the Impact of Facebook Ads

Marketers are under constant pressure to prove the impact of their ad spend. With offline conversion measurement capabilities on Facebook, marketers can track when transactions occur in physical business locations and other offline channels (CRM) after people see or engage with their Facebook ads.

match transactions to campaigns to determine attribution

This is extremely valuable for marketers looking to justify their budgets. Facebook is uniquely positioned to provide multi-touch attribution so marketers can accurately understand campaign performance and optimize spend. Look for marketers to adopt Facebook’s offline conversions in 2018.

Facebook Ads Predictions from Industry Experts

We asked four Facebook Ads experts their predictions about what’s to come in 2018.

Key Facebook Trends to Watch for in 2018

  1. Facebook’s Diminishing Ad Load
  2. Experimenting with Messenger Ads
  3. Getting Creative with Ad Creative & Ad Types
  4. Be Ready to Test New Features

Susan Wenograd, Partner at Five Mill:

“I think there will be at least two developments related to FB targeting in 2018 and one development around rules and regulations.

Facebook started running out of News Feed space last year. This has caused skyrocketing CPMs, and really fierce competition. This is great for Facebook’s bottom line, but I think they also recognize that evolving is now more important than ever. They cannot just shrug and say, ‘Welp, that’s all we got. Good luck, folks!’ They have to test and iterate on new ways to create inventory, but simultaneously have it be quality inventory that will move the needle so advertisers will spend budget on it.

I believed Watch was their first step towards this when they announced it. Video has all kinds of applications and success for ads on the platform, so it makes sense they’d look to evolve this first. They also have the opportunity to learn from what other video platforms like YouTube do well and don’t do well. Indeed, they have announced testing of pre-roll images recently, so look for future inventory openings to come from things outside the News Feed directly.”

Susan Wenograd Facebook Quote

“I also think the other major targeting thing that will continue to evolve is targeting based on user behavior. This was a huge leap forward for Facebook in the past year, allowing us to target users based on their in-platform activities like their interactions with Events, Videos, and Posts. I believe this will continue to evolve, giving us options for how to create Audiences based off which Posts/Ads they interacted with, and whether their reactions to posts were positive or negative.

The other thing I’m watching is the rise of chatbots. This is a huge deal for Messenger, but will also require some oversight from Facebook to control what that looks like. Spammy messages and annoying marketing techniques will frustrate users, so I think Facebook will need to figure out the rules and guidelines advertisers need to adhere to about what is messaged and how it’s done.”

Akvile DeFazio, President and Facebook Ads Specialist, AKvertise, Inc.:

“In this last year, Facebook continued making a push to get more users and brands on Messenger. As we head into 2018, we will most certainly see the trend forging a deeper path as more people dive in to the app from ads at different stages of the conversion funnel without even having to transfer to a website or wait for customer service responses via preexisting and less instantaneous means.”

Akvile DeFazio Messenger Quote

“From Sephora making beauty service booking quicker than ever, to O’Reilly Auto Parts providing customer service, Domino’s Pizza featuring order placement and tracking, to Pinterest now allowing users to easily search and share pins, it’ll be interesting to see the many creative ways brands will utilize this highly coveted space to get the closest to their audience since email.

As it stands today, it is still an under-utilized space for advertisers, though not for long, as chatbots level up. Messenger is no longer just for communication, it’s also evolving into a medium for conversions.”

Matt Mason, Senior Client Manager, Point It:

“With Facebook’s focus on Messenger and their acquisition of WhatsApp, they will find a way to be able to purchase directly through their messenger platforms. Imagine being able to serve an ad for a product within Messenger, and someone being able to purchase without having to click out of the app.

Facebook makes a big splash with an acquisition of a well-known brand in order to increase their reach but also solve for their dwindling inventory and ad slowdown. As the market becomes more and more oversaturated, they have to be able to meet the demand.”

Matt Mason Facebook Quote

“Facebook begins testing some sort of self-service creative studio to help advertisers with videos + statics. They’ve already announced the Creator App for the creative community. It wouldn’t shock me at all if there was some form of light version for advertisers. It would make sense considering the majority of the advertisers are small businesses without a lot of capital.”

Michelle Morgan, Director of Client Services at Clix Marketing:

“Long story short, Facebook is getting more competitive and that’s going to require advertisers to lessen or move away entirely from their previous strategies on the network. I think Facebook will continue to grow in terms of the number of advertisers over the course of 2018. Given the inherent nature of inventory on Facebook (there are only as many impressions available as people willing to scroll through their feed), that means more advertisers for the same amount of impressions. Economics 101, anyone?

Advertisers will need to be willing to do a few things to stay competitive on the platform.

First, be willing to bid competitively. Up until now, it’s been common to hear of highly successful Facebook campaigns for little ad spend. There might still be opportunities for that, but that time is fading. If you want to see returns from Facebook, you’ll need to get competitive with your bids or let go of the bidding reigns altogether and let Facebook’s algorithm do it for you.”

Michelle Morgan Facebook Quote

“Second, you’ll need to get more creative with how you engage your target audience. Going from zero to 60 and asking for a sale the first time someone visits your site might work during the holiday season, but it’s going to be harder to do during the remainder of the year. Whether it’s creating a new conversion type for a lead generation company, being more appealing with your ad copy doing a better job of not over-saturating your audience, or creating a retargeting funnel, there are many ways to get more creative with your advertising; and 2018 is the year you’ll have to flex those muscles to get the returns you need.

Lastly, stay on your toes in terms of the Facebook platform itself. Facebook is continually changing its advertising options, as well as its user experience. Keep an eye out for new targeting options, functionality, etc. that could benefit your accounts, and be willing to test new features as they become available. My guess is that early adopters will be the ones to get low-cost, profitable campaign results.”

Summary

Marketing is all about (a) finding your target audience and (b) communicating how your product or service can solve their problem. And Facebook ads are making this easier to accomplish. The question is how are marketers going to react to rising News Feed cost and expanding onto other Facebook properties. And how will Facebook entice marketers to experiment with new networks in a transparent way.

How to Fix a Failing Facebook Campaign

Posted by in Social
How to Fix a Failing Facebook Campaign

It’s Monday morning. I just sat down with my favorite cup of coffee and opened up my computer. I’m about to dive into my weekly reports, ready to count the pennies I’ve gained over the past week from my Facebook campaigns. I notice that seemingly overnight, our spend and conversion numbers have dropped off. I panic, but it’s cool because at least it isn’t Friday afternoon at 4:30, am I right? As I dig in, I notice the drops in both metrics are primarily coming from one campaign. Not just any campaign. My most trusted, go-to, evergreen campaign.

Has this happened to you? It’s happened to me several times over the course of this year. I’m convinced that if you do enough Facebook advertising, you’ll run into this exact scenario at some point. It happened to me with one of my larger B2B lead generation clients, and it happened fast.

Listen to the latest PPC Show podcast episode for more details from Matt Mason.

When High-Performing Campaigns Go Bad

When comparing Year over Year (YoY) quarterly performance, our main conversion goal was down by 78%. Of course, the only upside is that we were only spending 43% of our budget. However, no matter how you look at it, our performance was down, and CPAs were on the rise.

This didn’t make sense. We were doing all the right things. We had a funnel. We were warming up cold audiences with landing pages specific to their interests. We were creating awareness. We were remarketing with offers that our audiences perceived as valuable. At the end of the journey, we were hitting them with content that differentiated us from their competitors and showed the value we offered. Our audiences were segmented.

We got strategic with our targeting and tailored our messaging and content to those segmented audiences. The performance was off the chart the previous year.  Conversions were coming out of our ears.

Then it just stopped.

but why

After banging my head against the wall for days trying to figure out what was going on, I reached out to my Facebook rep. They reminded me of a key characteristic of conversion campaigns: you need consistent, click-based, conversion events. Ideally 50 a week per ad set. I wasn’t getting that anymore, which meant that my campaigns were no longer giving enough data to Facebook’s algorithm. It didn’t have what it needed to predict who would convert, so it pulled back.

But…but…my audience was locked in. I was granular. I knew my audience.

There was just one problem. I wasn’t getting results.

I was at an impasse. Do I continue to dig my heels into this audience that I know converts?  Or do I try something new?  I really didn’t have any choice.  What I was doing wasn’t working.

Facebook touts itself as having the best audience data, and they encourage you to leverage that. But what else does Facebook have? An extremely powerful algorithm that knows who is likely to take the action that you’re looking for. However, in my case, the algorithm had found “all” of the people in my segmented audience that were going to convert.

Campaign Trust Fall with Facebook

I spoke to some friends in the industry. I went through an entire pack of dry erase markers. I looked at the data and where I historically saw the most success. For this specific account, the majority of the conversion actions were coming from our larger lookalike audiences, read: large audience pools. Finally, AdStage’s JD Prater encouraged me to try something new. Again, what’s more important? The audience or the conversion? I know the Audience, but Facebook knows the conversion.

What if we threw the audience out and let Facebook determine who we should target? If you’re like me, the idea of throwing our tried and true strategies for a hail mary probably makes you start to sweat. My mind was screaming what every best practice tells you: Audience. Audience. KNOW YOUR AUDIENCE.

The industry who created the best practices weren’t going to have to deal with my client’s failing performance; I was.  So, I took a leap of faith, because I really had nothing to lose.

My hypothesis was this:

By focusing on creative and messaging that is relevant and highly targeted for the right market and letting Facebook determine who the audience should be, we’d get better performance.

Convincing a client who’s been targeting highly granular audiences to completely blow up their strategy was going to be a tough sell, so I took a different approach.

dr who got to end

I took my tried and true prospecting campaign that had been performing well before but was now experiencing extreme decline, duplicated it, and relaunched it with several 10% Lookalike audiences. This increased number of users in my audience by 10x (a larger pool! Consistent with other high performing campaigns!). I used the same settings and the same copy to isolate which change in the audience was the reason for increased or decreased performance.

When Taking a Leap Pays Off in Performance

In the first month, we drove 111% more conversion actions than we had the month before with the “high performing” audience I had typically used, while CPAs increased 19% month over month. Not bad. Remember, this campaign had dropped off to the point that we were spending around 20% of our allocated budget. Our spend doubled month over month.

Using All the Tools At Your Disposal

The idea is driven by the core belief that when we create our audiences, we’re actually only capturing a fraction of the overall conversions out there. Take a piece of paper and pencil. Draw a big circle. Now draw a couple of small circles inside the larger circle. This is what we’re doing with audiences. There’s still a large portion of the overall circle that is full of people who might not convert.

bullseye-clipart-clipart

Facebook is going to find those people because it pulls from many data points that we don’t have access to as marketers, like who is likely to see an ad and take the desired action. That’s why as you collect consistent conversions in your ad sets, things get more efficient. The algorithm improves over time. Eventually, you’ll hit the end of your audience, and all of the low hanging fruit will have been picked off. Next steps dictate that you need to find those prospects who don’t fit the typical targeting profile.

Go-Forward Plan for Social Strategy

Now the fun part begins. I’ve already proven that by opening up audiences, we can get better results. So just recently, I launched my first ad set with no audiences identified other than age. The initial results are promising. I will admit, CPA is higher by 17%, but the key is that we’re getting consistent leads. This strategy, over time, should prove to be more efficient.

What about you? Have you tried this strategy? What are your thoughts and concerns? Hit me up on Twitter with your feedback!

Facebook Audience Network: How to Improve Results

Posted by in Facebook
Facebook Audience Network: How to Improve Results

Facebook Audience Network (FAN), which reported a $1 billion run rate earlier this year, is a great option for marketers looking to scale their ad campaigns. FAN lets you run ads on third-party websites and apps while taking advantage of all the things that are great about Facebook native in-feed ads: rich targeting data, measurement, and user-friendly interface.

I know you’re probably thinking: my conversions and brand safety would really improve if I could just place more ads alongside third-party content that I can’t control. Well, with a little bit of tinkering in Ads Manager and a trusted list of exclusions, you can increase reach at a lower CPM and perhaps, even drive more down-the-funnel metrics. Below, you’ll find a complete guide to FAN and our trusted list of exclusions to make Facebook Audience Network work for you.

What’s Facebook Audience Network?

Facebook launched its Audience Network back in October 2014. This strategic move allowed Facebook to grow its footprint by boosting the volume of ad spend going to off-Facebook websites and mobile apps. Needless to say, it’s a way for Facebook to address its growing ad load challenges. FAN lets advertisers extend their Facebook campaigns outside of the social network while using the same ad targeting data.

FAN has grown quickly over the past few years. It’s not just websites and apps now; Facebook is aggressively taking aim at the TV advertising market. Facebook video ads are delivered through apps that run via set-top boxes, such as Apple TV and Roku.

Types of Ads in Audience Network

As of October 2017 (and Facebook has been moving especially fast this year), Facebook Audience Network lets advertisers place ads in the following formats:

Rewarded videos currently support Unity and Cocos2DX game engines. Mobile gamers can choose to watch an ad in exchange for in-app rewards such as coins and power-ups.

Facebook’s SDK is now embedded into nearly every app on the planet. The use of header bidding and a solid inventory that includes Instant Articles makes Facebook a major challenger to traditional programmatic inventory sources and direct ad channels.

Why Advertise on Facebook Audience Network?

Facebook inventory is in high demand. Facebook’s CPMs were up 171% in 2017 and showing no sign of a slowdown, especially with the upcoming holiday season. For advertisers looking to scale spend and reach, the Audience Network could be a good option.

A few ways advertisers can take advantage of FAN:

  • Drive e-commerce sales at scale
  • Generate more leads by driving customers to register for something after they click
  • Boost brand awareness
  • Reach new relevant audiences
  • Repeat your message by following users off Facebook and on their favorite websites and apps
  • Target very niche audiences across web, mobile, and connected devices.

How Facebook Audience Network Works

In a nutshell, the Audience Network is Facebook’s version of Google AdSense. Here’s how it works:

  • Publishers with websites or apps can join the Audience Network by submitting their application for review. They agree to allow Facebook to place ads on their websites and apps.
  • Advertisers set up campaigns on Facebook. By default, ad placements with FAN-enabled campaign objectives will run on the Audience Network.
  • Facebook places ads on its partnering websites and apps. Advertisers compete to get their ads on placements by bidding.
  • Facebook makes money on ads and splits it with the publisher of the website or app.

Create Ads for Your Campaign Objectives

If you disable automatic placement, Facebook will recommend using Audience Network for the following campaign objectives:

  • Video views (including reach and frequency buying)
  • Traffic (for website clicks and app engagement)
  • Product catalog sales
  • App installs
  • Conversions

Whether you’re increasing brand awareness measured by views and clicks or driving sales, you need to write Facebook ads for people in the “browse” mode. Like billboard ads, FAN creatives shouldn’t pack too much information. The simpler the message, the more powerful the effect.

Set Up Your First Facebook Audience Campaign for Success

Whenever you create a campaign using the new Ads Manager, Audience Network is selected by default for any of the FAN-enabled ad objectives.

Facebook Marketing Objective

Source: Facebook Blueprint

So, unless you manually opt out of running ads on FAN in Settings, your ad will be running both in native Facebook feed and on the partner network. At the same time, you can’t select Audience Network alone. Ads must run either on Facebook or Instagram to run on FAN.

Facebook audience network selection

It’s possible to drive quality traffic for your direct response campaigns on FAN. Be mindful to review your placement report and not waste your ad budget on fake clicks and hurt brand image in the wrong placements. Facebook Blueprint course recommends leaving the Automatic Placements option selected, but you’ll really be better off by commanding more control. So skip the “recommended” trap and head over to Advanced Settings and Block Lists – these settings are not that “advanced” and will take you like five minutes to set up.

Protect the Brand and Improve Results with Blocklists

To set up a block list for Facebook Audience Network, go to Business Settings in your Facebook Ads Manager and find “Block Lists” under People and Assets. Upload your block lists. Apply your block lists to all or selected ad accounts. When you create a new ad set or ad, you can check if the list has been applied in Advanced Settings =>> Exclude Categories =>> Account Block Lists.

Facebook Block List

At AdStage, we built our FAN blocklist based on Seer Interactive’s blocklist for Google Display Network. You can copy and export in .csv AdStage’s blocklist for Facebook Audience Network by clicking on the link. The volatile political environment has led many programmatic buying platforms to shun many alt-right news websites, and you can certainly add such sources to your FAN blocklist to ensure the best brand representation and safety.

Add Facebook Block List to Ad Set

Note: you can add blocklists to your ad account only if you’ve been added as an advertising Admin on that account (if you have advertiser or analyst permissions, you won’t be able to add a blocklist).

Measuring Success

You can track your campaign success on Audience Network the same way you would do for in-feed ads via Ads Manager Reporting (or your preferred PPC reporting tool).

Facebook Placement

Further Resources on Facebook Advertising

  1. 7 Major Updates for Facebook Advertisers
  2. When and How to Use Facebook Sequential Advertising
  3. Quick Guide to Facebook Offline Conversions
  4. Crash Course on Facebook Organic Reports
  5. The Facebook Ad Type with the Best ROI
  6. Facebook Ads Reporting Tool

Have you tried Facebook Audience Network? Any best practices to share? Tell us in comments!