Whitepaper adsfor fans-webtrends

WHITEPAPER / SOCIAL

Facebook’s Best Kept Secret:Building Conversions and Revenue with Ads for Fans

®

By Justin Kistner, Director of Social Products, Webtrends

Facebook advertising is about much more than posting. If you aren’t optimizing Ads for Fans, it can be costing you conversions and revenue.

WHITEPAPER / SOCIAL 2

At a Glance

Business Trend

• Facebookisnow800millionusersstrongandhasevolvedfromacommunitysitetothelargestadvertisingopportunityintheworld–biggerthanGoogle,Yahoo,AOLandMicrosoft.

• CustomerswholikeabrandonFacebookprovidethatcompanywithvaluable,opt-inlistmarketingopportunities,specifically,theabilitytotargetfanswithads.

• Fansavidlysharetheirinterestinbrandswiththeirfriendsbecausetheirengagementisexposedinthenewsfeed.

At Issue

• WallpostsandfanpageswithlowengagementandaffinityarefilteredoutbyFacebook’sEdgeRankalgorithm,andwillfailtoshowupinfans’newsfeeds.

• Knowingwhatencouragesengagementandhowtooptimizefaninterestremainelusivetomanymarketers–whoareseekingwaystomonetizethechannel.

• Targetedadsareeffective,butarethebestkeptsecretonFacebook.

Business Solution

• AdsforFansofferthegreatestreturnoninvestment.

• Brandscangain7Xgreaterclick-through-ratesbytargetingfanswithads,whichkeepscostperclick,andcost per fan, at a minimum.

• Withadvancedanalyticssolutions,marketerscanroll-upFacebookdataaspartofanoveralldigitalmarketing performance report.


Facebook’s best kept secret: building conversions and revenue with ads For Fans

Thankstoabig-drawmovieandcountlessnewsspots,everyonewithaninterestinsocialmediaknowsthestory

ofFacebook.Startedin2004bycollegestudentsasawaytoconnectwiththeirfriends,ithasgrowntoaglobal

socialnetworkingsiteof800millionactiveusers,with700millionofthosecomingaboardinjustthelastthree

years.AccordingtoEdisonResearch,asof2011,anestimated51percentoftheU.S.populationisonFacebook.

Itisexpectedtoreachonebillionfanssometimein2012.

Facebook,ofcourse,isn’tallaboutindividualsandfriendssharingposts.It’salsoaboutbusinessesandbrands

engagingwithfans.Butastheexcitementfrommeetingyourfangrowthgoalsbeginstosubside,therealityof

“Nowwhat?”beginstoseepintomarketingplans.Theexecutivesuitewondershowyouplantoengage,nurture

andmonetizethosefansandshowareturnoninvestment.Thisisapointatwhichmarketersoftengetstuck:

Howdoyoudeliverrealbusinessvaluefromyoursocialcampaigns?

From community site to performance environment

WhileFacebookisprimarilyknownasasitewherefriendscancommunicate,asabusinessithasevolved.Injust

ashorttime,ithasbecomeapowerhouseofadinventory,morethanYahoo!,Microsoft,GoogleandAOL,with

nearly180billionU.S.displayadimpressionsalone.Itisnowaperformanceenvironmentfilledwithmediaandad

campaigns,andwithunprecedentedopportunityforclick-throughs,conversionsandrevenuestreams.

net u.s. display ad revenue: source: eMarketer; septeMber 20, 2011

Facebookoffersauniqueandvaluableadvertisingenvironment.Why?Fansare100percentopt-ins– theywanttobeyourfriendandwanttohearfromyou.And,theywilltelltheirfriendsaboutyou.

Then why aren’t you getting better campaign results?

ThemajorityofFacebookfansofbrandsarecustomersprimarilylookingfordeals,exclusiveoffersandbenefits.

This is a good, because customers buy 36 percent more products and services from a brand after becoming a

fan.However,abrand’spresenceinafan’snewsfeedisdependentonthelevelofengagementwithafanpage

(liking,commenting,posting,sharing).Iffansaren’tactivelyparticipating,thenabrand’spageisfilteredoutby

Facebook’sEdgeRankalgorithm.That’swhysomewallpostsmayhavedisappointingresults.


Thereareotherreasonswhybrandsmightbelosingengagement.Testinghasshownthattraditional

transactionaladcontent,containinglanguagesuchas“percentoff,”“coupon”and“sale,”attractsthelowest

ratesoffanengagement.Again,withlowengagement,Facebook’sEdgeRankalgorithmfiltersthosepostsoutof

thenewsstream.

Whatdoesgetthehighestengagement?Facebookisasocialnetworkingsite,sothetypeofactivitythat

Facebookvaluesmostisconversationsandsharingbetweenfriends.ToencourageFacebookengagementand

sharing,andnotbeshunnedbyFacebook’sEdgeRankfilter,itisnecessarytoincreasethe“funtotalkabout”

factorinpostsandads.ThisissomethingWebtrendscallstheSociabilityIndex,discoveredwhiledoingresearch

about Facebook ads.

what clicks, what costs. sociability index. source: webtrends, 2011.

IntheSociabilityIndexgraphicabove,bluebarsrepresentcostperclick(CPC).Thelongerthebluebar,themore

eachclickcosts.Redbarsrepresentclick-through-rate(CTR).Thelongertheredbar,themoreclicks.Thereisa

strongrelationshipbetweenCTRandCPC,whichisthehighertheCTR,thelesstheCPC.Topicswithlongred

barsarewhatpeoplelikemosttotalkabout:travel,media,sports,fashion,luxurygoods,beautyproducts,cars,

tabloidsandblogs.Thesetopicsaremoresocialinnature.

Whileafewindustrieshavelowsociabilityindexratings(healthcare,financialservicesandtelecommunications,

forexample),knowingwhatfansliketotalkaboutisimportantwhencreatingpostsorads.Tofacilitate

engagement, use status updates to ask fans for their opinion or preference. When it’s time to push offers,

considertargetedads.Becausefanshaveopted-in,theyaremorelikelytoclickontheads.


Yet,despitethepotentialforconversionandrevenue,marketersremainrelativelyunawareaboutAdsforFans,

eventhoughtheimpactcanbesignificant.Unfortunately,thatisleavingmoneyonthetable.

Who is a fan?

Beforeplacingads,itisimportanttoknowwhattypeof

consumerisonFacebook.Morethan60percentareage

25-55+.Breakingthatdownevenfurther,29percentare

age35-54–that’sone-thirdofFacebookfansfirmlyinthe

categoryofgreatestspendingpotential.Currently25

percentoffansareage25-34,andtheyaremovinginto

theirlucrativespendingyears.

TheagegroupwiththehighestCTRandthegreatest

amountofdiscretionaryspendingincludethose55-64.

Marketersmaywanttoremembertheadage,“theolderwe

getthemoreweclick.”Ifaproductisgearedtoteens13-17,

agemaybeareasonanadisnotgettingdesiredresultson

Facebook.Theyrepresentjust10percentofusersandthe

leastlikelyagegrouptoclickonads.

HowdoFacebookusersbecomeyourfans?Themaindrivers:75percentcomefromaninvitation

oranad,59percentfromafriendand49percentfromsearch.Clearly,adscanhaveasignificantimpacton

acquiringasolidfanbase.

understanding ads For Fans

There are three common approaches to

Facebookads:

1.Usingadstodrivewebsitetraffic;

2.Usingadstoacquirefans;

3.Usingsponsoredstories,sharedinaform

ofanadtofriends,suchas"Davidlikesthis

brand," to gain fans.

Industrieswithlowsociabilityindexratings

needtocarefullyconsidertheiradtopicin

ordertogainbetterCTR.Forinstance,ifan

insurancecompanysponsorsabigfootball

game,anAdforFansthathighlightsthe

gamewillprovebetterCTRthaniftheadisdirectlysellinginsurance.

Toimprovesharing,Facebook’s“friendsoffans”targetingfeatureallowsbrandstoexpandaudiencereachby

Source: http://www.istrategylabs.com/2010/01/facebook-

demographics-and-statistics-report-2010-145-growth-in-1-year/

Who Uses Facebook?


deliveringadstothefriendsofpeoplealreadyconnectedwiththepage,

application,grouporevent.Whenfriendsoffansseethead,they’llseethat

theirfriendslikethebrand,andtheyinturn,willbemorelikelytobecomefans

themselves.

TwootherfactorsarealsoimportanttoimprovingCTR:1)collegeeducated

Facebookfansaretwiceaslikelytoclickonadsiftheyseeafriend’snameor

faceinthead;and,2)imagesthatinspire“whatisthat,”or“Iwanttosee

more,”aremostsuccessful.That’sdifferentfromthewayGoogleadswork,whichdon’tcontainimages.

a bucket plan For success on Facebook

Acquiringfansthroughadsisthefirststeponthejourneytomonetizingmarketingefforts,anditisoneofthemost

effectivemethodsacompanycanusetobuildacustomerbaseanddriveconversions.AdsforFansdeliverthe

best return on investment.

WebtrendshasworkedwithbrandsaroundtheworldtooptimizeAdsforFans,andhasdevelopedabest

practicesapproachtoadvertisingbudgets.Ratherthanplacetheentirebudgetintoonetypeofad,threebudget

buckets are advised.

The Nurture Fansbucketisusedtodeliverofferstoexistingfans,drivingthemtolandingpagesonyourwebsiteand

fanpage.Thisbuckethelpsyouachievethegreatestreturnoninvestment.

The Acquire Fans bucketisaboutbuildingyourfanlist.Ifyourfanbaseisalreadygood,spendlessthanhalfofyour

budgetonacquiringmorefans.Ifyouhaveaverylargefanbase(over1millionfans),uselessthan20percentofyour

budget for acquisition.

The Friend of FanTargetingbucketisforacquiringandnurturing,reachingoutwithadsorsponsoredstoriesto

friendsofyourfans.Theseeffortsbringyougreaterresultsthansimplycoldcallingforfans.Why?Becauseyourfans

arethebestbrandambassadorsyouhaveandtheirfriendswillnoticetheirpreferences.Itishumannatureto

associatewithpeoplewhohavethingsincommonwithus.

Cold call targeting averages

.05 percent CTR. Ads for Fans

reap a .35 percent CTR.

That’s 7X greater.


WhencreatingFacebookcampaigns,itisgoodpracticetohaveavarietyofadcreativereadyavailablefor

rotation.Facebookadshaveaquickburnoutrate.AnaverageadwillhaveapeakCTRinthefirstthreedaysit

appears;afterthat,itbecomesmorecostlytorun.Thatmeansifyouhavea30-daycampaign,planforatleast10

creative refreshes.

driving traFFic For ads For Fans

Unlikeotheronlineadenvironments,Facebookisadestinationsite.

Whileyourfansmayclickthroughtoyourwebsite,datashowsthey

willreturntoFacebook.Youwillexperiencehigherconversionrates

iftheinitiallandingpageexperiencestayswithinFacebook.That’s

becauseaftercontextisprovidedwithinFacebook,fansaremore

willingtotakeactiononyourwebsite.Customtabs,placedintheleft

sidebaronFacebookpages,makeeffectivelandingpages.Ifa

customerconversiontakesplacewithinFacebook,that'sallthebetter

for engagement.

“ gordmans, an omaha-

based apparel and home

fashions retailer, ran a highly

targeted sponsored like ad

against the regions where they

have 68 retail locations, a

female demographic, and

interest terms for bargain

hunting.

while most Facebook ads are

lucky to get a 0.05% click-

through rate (ctr), this

campaign drove a 0.40% ctr

on the first day. After 48 hours,

it was still generating 0.220%

ctr. generally, anything at or

above 0.1% is highly

optimized!

sponsored likes also

decreased the cost per click

by 70% and cost per fan by

83% overall. that’s like getting

a 77% discount off from

Facebook!

To read the entire Gordmans Facebook case study, go to www.webtrends.com

DriveadsfirstwithinFacebook,usingfriendsoffans,landingpages, events or custom tabs.

Custom tabs CustomTabs


tracking caMpaign activity and conversions FroM Facebook

WhetheradsdrivefanstoanotherFacebookpageortoawebsite,itisimportanttotrackactivitywithcampaign

IDurls.Toaccomplishthis,you’llneedtouseananalyticssolution,suchasWebtrends,thatallowsconversion

trackingthroughFacebook’suniqueenvironment.Typicalconversiongoalsmayincludedownloadingwhite

papers,casestudies,webinars,trialsoftwaredownloads,Ecommerce,couponsortrialproducts,dependingon

the industry.

choosing a robust analytics solution For Facebook advertising

Theanalyticssolutionyouchoosetotrack,testandtargetFacebookadvertisingmustbeabletosupportpassing

campaigndata,allowingbrandstotrackaFacebookcampaignasisdoneonastandardwebsite.And,tofollowa

Facebookvisitorthroughtoanotherproperty,suchasawebsite,theanalyticssolutionhastosupportcross-

domaintracking.WithWebtrends,brandscan:

• Trackconversionsthroughiframetabs,anHTMLstructurethatallowsanexternalpagetobeembeddedon Facebook fan pages

• Maintainvisithistoryevenasvisitorscrossdomains

• CollectFacebook-specificdatasuchasfanstatus,gender,language,andmore

• Measureandcompareperformanceacrossalldigitalchannel

• Enjoyopen,flexibleanalysisforvisualreporting

Inaddition,Webtrendsallowsbrandstocreateandmanageadspend,segmentwithmicro-targetingandsetup

ad rotation.

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rolling up Facebook data into a uniFied perForMance reporting

AdsforFanscampaignscanbemeasured,tested,targetedandoptimizedtogainbetterperformance,justas

marketershavedonewithwebsitesforyears.But,itisalsoimportanttoknowhowtheresultsofadvertisingin

Facebookcomparestoandfitsintoyouroveralldigitalmarketingstrategy.Thisisonethemajorchallengesofthe

newdigitallandscape.

Advancedanalytics,suchasthesolutionsofferedbyWebtrends,allowdatatobecomparedandunifiedacross

allchannels–web,mobileandsocial.Thisofferstheseniormarketerthebestbusinesscaseforjustificationof

investment,apathforachievingmarketingperformance,andacompetitiveadvantageinthemarketplace.

FormoreinformationonAdsforFansaswellasotherWebtrendssolutionsforsocialmarketingand

measurement,visithttp://webtrends.com/solutions/social/

Unified reporting in Webtrends gives marketers a comprehensive view of all digital marketing performance.

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