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Hussein Fazal, SMASH Summit NYC
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Hussein Fazal, SMASH Summit NYC

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Hussein Fazal's (CEO @ AdParlor) presentation at SMASH Summit on 7/26 in NYC

Hussein Fazal's (CEO @ AdParlor) presentation at SMASH Summit on 7/26 in NYC

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Hussein Fazal, SMASH Summit NYC Hussein Fazal, SMASH Summit NYC Presentation Transcript

  • Facebook Ads – The Math behind the Magic www.adparlor.com
  • Hussein Fazal – CEO, AdParlorAds API Partner – manages ~1 Billion daily impressions on Facebook
  • What works on Facebook? Intent (search versus Facebook) Deep Conversions o Does education, insurance, flowers work on Facebook? o Definitely not if you treat it like search! Shallow Conversions o Playing a Facebook game o Liking a Facebook fan page o Registering for a web site via Facebook connect
  • Some Basic Terms CTR – Click Through Rate CVR – Conversion Rate CPM – Cost per 1,000 impressions eCPM – Effective cost per 1,000 impressions CPC – Cost per click CPA – Cost per acquisition 4 Clicks from 10,000 Impressions = 0.04% CTR 2 Acquisitions from 4 Clicks = 50% CVR 4 Clicks * $0.30 CPC = $1.20 Cost $1.20 Cost / 2 Acquisitions = $0.60 CPA
  • Ad Server Fundamentals Any ad network wants to choose the ad with the highest eCPM o This is true for Facebook and amplified by their focus on user experience A high CTR means you can buy cheaper clicks A high CVR means you get more conversions for those clicks
  • The Importance of CTRDifference in eCPM based on the CTR [hold CPC bid constant] Impressions CTR Clicks CPC Bid eCPM 1,000 1.00% 10 $ 0.50 $ 5.00 1,000 0.10% 1 $ 0.50 $ 0.50 1,000 0.05% 0.5 $ 0.50 $ 0.25 1,000 0.01% 0.1 $ 0.50 $ 0.05
  • Seeing the Effect on Facebook
  • The Importance of CVRDifference in eCPA based on the CVR [holding cost constant] Cost Clicks CVR Conversions eCPA $ 5,000.00 10,000 40.00% 4,000 $ 1.25 $ 5,000.00 10,000 50.00% 5,000 $ 1.00 $ 5,000.00 10,000 60.00% 6,000 $ 0.83 $ 5,000.00 10,000 70.00% 7,000 $ 0.71
  • Understanding Ad Optimization Don’t talk to me about pricing unless you understand CTR and CVR  High CTR = cheaper clicks  High CVR = more conversions for those clicks Create thousands of ad, learn in real- time, and optimize CTR and CVR By optimizing on CTR/CVR you are essentially driving down your CPA
  • Quick Tangent - Sponsored Stories “Something that would appear on a users news feed – turned into an ad unit”
  • Why do Sponsored Stories get you cheaper fans (technical)?Higher Click-Through-Rate (CTR) Higher Conversion Rate (CVR)gets you cheaper clicks gets you more for those clicks
  • Why Do Sponsored Stories get youcheaper fans (high level)? Because it is a story – not an ad. Remember - “Something that would appear on a users news feed – turned into an ad unit” Before sponsored stories: o More Fans = More expensive for the next Fan Since sponsored stories: o More Fans = Cheaper for the next Fan
  • If the Ingredients are PerfectSuper Targeted $.08 Able to achieve 0.29%Fan Acquisition CTR and 81% CVR through life of campaign Campaign Effective Cost Per Fan
  • Groupon’s Goal is to get sign-ups
  • Groupon Generic Ads  Constant creative rotation Deal Specific Ads  Combining the Groupon deals API with the Facebook Ads API
  • Generic Ads It’s all about testing & optimization
  • Deal Specific Ads
  • Deal Specific Ads Integrate with Groupon Deals API Pull deals as they go live at midnight in local timezone Machine learning to determine who to target Set Facebook Ads live within minutes of deal going live!
  • Bringing it all together
  • hussein.fazal@adparlor.com www.adparlor.comwww.facebook.com/adparlor