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WHITEPAPER
The Definitive Facebook Advertising Playbook:
The 4 Key Trends and 12 Strategies
You Need to Know for 2014
2014
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
Copyright © 2014 Marin Software Inc. All rights reserved. 2
TABLE OF CONTENTS
Introduction	03
Trend #1: 	 05
Marketers Embrace News Feed as Vehicle for Native Advertising	
Trend #2: 	 07
Facebook Users Embrace Mobile as Medium of the Future 	
Trend #3: 	 09
Facebook Users Are More Likely to Buy from Brands
They’ve Previously Engaged With	
Trend #4: 	 11
Facebook Users Are More Likely to Engage With “Fresh” Creatives 	
Methodology	14
Conclusion	14
About Marin	 15
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
3
INTRODUCTION
Facebook has built the largest, most highly-engaged audience on earth, with a significant
percentage of the world’s population logging on daily. Consider the numbers; Facebook
boasts over 1.19 billion monthly active users and continues to add more each month.
Users are also logging on and spending more time on the platform than ever before.
In fact, according to Facebook earnings reports, daily active users rose 25% year-
over-year to 728 million in Q3 2013.
Source: Publicly available Facebook Q3 2013 earnings report data, acquired through businessinsider.com
For advertisers, Facebook’s meteoric rise and massive audience represents an excellent
opportunity to build brand awareness and acquire revenue. Brands must reach consumers
where they spend the most time, and it’s clear that consumers spend large amounts
of time on Facebook. Fortunately, it’s now possible to reach highly targeted segments
on Facebook using a combination of Facebook’s own tools and third-party ad management
platforms like Marin Software. By deploying advanced strategies on Facebook, advertisers
can not only reach more of the right consumers with the right messages but build
lasting engagement with loyal customers.
Q3’11
MONTHLY ACTIVE USERS (MAUs)
IN MILLIONS
US & CANADA
176
221
196
207
179
229
212
225
183
239
234
245
186
246
255
268
186
253
277
288
193
261
298
304
195
269
319
327
198
272
339
346
199
276
351
362
800 845
901
955
1,007
1,056
1,110
1,155 1,189
Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13
EUROPE ASIA REST OF THE WORLD
DID YOU KNOW:
The number of daily
active users (DAVs)
on Facebook rose
25% year-over-year
in Q3 2013 vs
Q3 2012.
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
4
This white paper will highlight the four most important Facebook advertising trends
of 2013 and reveal top tips advertisers can use to maximize their Facebook advertising
ROI in 2014:
Executive Summary of Key Advertising Trends for 2014:
1.)	 Marketers Have Embraced Facebook’s News Feed as a Vehicle for Native
Advertising : News Feed has become the primary area of focus and engagement
for users, creating bright opportunities for advertisers. Marin saw a 140% quarter-
over-quarter increase in News Feed advertising in Q3 2013 with 67% lower costs
per conversion compared to right-hand side ad placements.
2.)	 Facebook Users Have Embraced Mobile as Medium of the Future: Mobile adoption
among Facebook users skyrocketed in 2013 with 74% of Facebook users now
accessing the platform through their mobile devices. This increase in mobile
adoption, combined with attractive click-through rates (CTR) via mobile advertising,
has changed the way advertisers manage their campaigns. In fact, Marin saw the
percentage of advertisers running mobile-only campaigns increase 45% between
Q2 2013 and Q3 2013.
3.)	 Facebook Users Are More Likely to Buy from Brands They’ve Previously Engaged
With: Of all the changes Facebook introduced to their advertising capabilities,
perhaps none was more important than Custom Audiences. Custom Audiences
makes it possible for most advertisers with a customer list to retarget. Retargeting
customers through Custom Audiences has already proven to be the most cost
effective targeting option, producing costs per conversion that are 64% lower
than targeting by Broad Categories or Precise Interests according to Marin
Software data.
4.)	 Facebook Users Are More Likely to Engage With “Fresh” Creatives: As Facebook
advertising has become increasingly competitive, the company has become strict
on showing ads with the highest CTR. To maintain “fresh” creatives and prevent
overexposing users to the same ads, Marin has seen a substantial increase in
advertisers using creative rotation strategies. On average, advertisers working
with Marin using creative rotation strategies have produced 35% higher CTR
than those not using creative rotation, demonstrating that users prefer
and are more likely to engage with fresh creatives.
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
5
TREND #1:
MARKETERS EMBRACE NEWS FEED AS VEHICLE FOR NATIVE ADVERTISING
Native advertising is a trend not only on Facebook, but across the entire web. Native
advertising is a strategy whereby the advertiser attempts to gain attention by providing
content in the context of the user’s experience. Native ad formats match both the form
and the function of the user experience in which it is placed. Publishers are increasingly
offering advertisers new native ad formats integrated directly into the content stream
as a substitute for traditional banner ads, which typically do not drive a high volume
of traffic or engagement. No publisher stands to benefit from the shift towards native
advertising more than Facebook, which allows advertisers to display ads in News Feed
as part of a user’s personal content stream.
Facebook launched News Feed ads in late 2012 as a complement to its original right-
hand side display ads. Compared to traditional right-hand side advertising placements,
News Feed placements are designed to blend into the users’ natural, social experience
on Facebook rather than on the periphery of the page. Recognizing the opportunity to
drive engagement and website traffic, Facebook advertisers quickly adopted News Feed
creative types like the Page post ad, which allows for large images and customized deep
links to the advertiser’s website. Marin Software’s data shows advertisers increased
spending on News Feed ads by 140% in Q3 of 2013 compared to a quarter earlier,
highlighting that advertisers are rapidly adopting the placement type as part of their
broader Facebook advertising strategy.
DID YOU KNOW:
Compared to right-
side ad placements,
News Feed place-
ments drive an
average of:
•	 44x higher
clickthrough
rates
•	 67% lower
costs per click
•	 5X higher
conversion rate
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
Copyright © 2014 Marin Software Inc. All rights reserved. 6
So far, the growth in News Feed advertising adoption is proving beneficial for advertisers.
Consumers pay close attention to their News Feeds, so when a brand places compelling
advertising content directly into that stream, consumers are more likely to engage with
the ad. Marin data shows News Feed ads attained a 44x higher CTR and a 5x higher
conversion rate than right-side display ads in Q3 of 2013 compared to a year earlier.
News Feed ads achieve these stellar results at a 67% lower cost-per-click (CPC)
and a 64% lower cost-per-acquisition (CPA) than right-side ads.
Source: Marin Social Index (MSI) data from Q2-Q3 2013
Given the performance of News Feed ads, advertisers should focus their attention on
optimizing their presence within the content stream. Doing so is particularly important
when targeting mobile users, as News Feed ads are currently the only type eligible
to appear on mobile devices.
Strategic Recommendations for Facebook Advertisers:
•	 Allocate at least half of budget toward News Feed placements: In addition
to driving superior performance relative to the right-hand side, advertising in News
Feed presents several additional key benefits for advertisers including increased
visibility and mobile reach. As both mobile adoption and News Feed engagement
increase amongst users, advertisers will need to begin allocating budgets toward
the placements that are most likely to be seen by users.
•	 Leverage Unpublished and Existing Page Post Ads: Over the past year, Page
post ads have evolved into the top performing Facebook creative type for driving
conversion. There are two flavors of this creative type – unpublished Page posts
and existing Page posts. Ensure you are taking advantage of the distinct benefits
each. For example, advertisers should promote organic Page posts that have
garnered high levels of engagement and virality amongst Facebook users, which
will immediately add “social context” to the target audience. Unpublished Page
posts, which do not require a prerequisite post to your fan base, should be
targeted at your audiences with the highest ROI and contain deep links
to optimized landing pages.
Newsfeed
Only
RHS
Only
Newsfeed
& RHS
CPC & CTR BY PLACEMENT TYPE
$0.00
$0.10
$0.20
$0.30
$0.40
$0.50
$0.60
$0.70
$0.80
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
CPC CTR
Newsfeed
Only
RHS
Only
Newsfeed
& RHS
CPA & CONVERSION RATE BY PLACEMENT TYPE
$1.00
$0.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00 7.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
CPA CONVERSION RATE
“The News Feed has
become an increas-
ingly essential part
of our Facebook
advertising strategy.
Using Unpublished
Page post ads,
we’ve been able
to achieve Search-
like performance
on Facebook
and will continue
to expand our
strategy in 2014.”
Samantha Puma,
Partner & Affiliate
Network Officer,
Open Universities
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
7
•	 Track ROI of News Feed placements: News Feed placements perform differently
and therefore must be managed separately from right-hand side ads. Advertisers should
ensure they are working with a Facebook ads management platform that can track
not only conversions and ROI but also the lifetime value (LTV) of desktop and mobile
News Feed placements separately from right-hand side placements. Elite Facebook
management platforms like Marin Software can help advertisers roll up aggregate
views of LTV by placement to help automate bid management and budgeting.
TREND #2:
FACEBOOK USERS EMBRACE MOBILE AS MEDIUM OF THE FUTURE
Smartphones have spread faster than any consumer technology in human history,
reaching market maturity faster than radio, TV, the commercial Internet and many
other devices and technologies. According to Nielsen, 61% of US mobile subscribers
now own a smartphone. In 2013, the surge in mobile adoption helped skyrocket
Facebook’s mobile base, creating new opportunities for marketers. In its Q3 2013
investor summary report, Facebook reported 74% of Facebook users utilize the platform’s
mobile app. Facebook also reports that the percentage of users who access Facebook
exclusively through their mobile device increased by 19% in Q3 versus Q2 2013,
highlighting that overall, users are gravitating toward using Facebook exclusively on
their mobile devices. In Q3 of 2013, Facebook reported 874 million mobile monthly
active users, a 45% year-over-year increase. Given the surge in mobile users, in 2014
it will be imperative that Facebook advertisers target users’ mobile devices.
Source: Publicly available Facebook Q3 2013 earnings report data, acquired through marketingcharts.com
FACEBOOK MOBILE MONTHLY ACTIVE USERS & AD REVENUES
% OF MONTHLY ACTIVE USERS (MAUs) ON MOBILE / % OF AD REVENUES FROM MOBILE
MOBILE 5 OF MAUs
60%
14%
Q3 2012
Q3 2012 - Q3 2013
Q3 2012 Q3 2013 Q2 2013 Q3 2013
MOBILE 5 OF AD REVENUES
64%
14%
30%
41%
49%
74%
71%
68%
DID YOU KNOW:
There was a 45%
increase in mobile
only campaign
spending between
Q3 and Q2 2013?
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
8
In response to the proliferation of users of their mobile app, Facebook developed new
mobile advertising solutions in 2013, primarily focused on the high-growth app market.
According to Venture Beat, the mobile app market is expected to grow 257% between
now and 2017 to over 200 billion total apps. The most widely adopted of Facebook’s
mobile advertising solutions have been Mobile App ads, which help users discover and
engage with new, relevant and interesting mobile apps through the Facebook News Feed.
With their attractive cost-per-install rates, Mobile App ads have quickly become one of
the more effective and efficient ways for advertisers to grow their mobile programs. When
used in conjunction with Custom Audiences and / or Partner Categories, marketers can
target Facebook mobile users based on their online and offline buying characteristics
and drive them directly to their mobile app. For many Marin advertisers, Facebook’s
Mobile App ads present a viable means of driving app downloads, app engagement
and mobile sales at scale.
With the growing distinctions between mobile and desktop user behavior and advertising
options, Facebook marketers are beginning to create unique strategies for targeting users
on different devices. One key strategy advertisers already utilize to optimize their mobile
ad spend on Facebook is to split targeting into separate desktop and mobile campaigns,
instead of creating one campaign for both devices. Marin data shows the percentage of
advertisers opting for mobile-only campaigns increased 45% between Q2 and Q3 2013,
suggesting that advertisers prefer to report, budget and bid on mobile differently than
desktop. It is likely that performance was a key driver of this shift in management
strategy. According to Marin data, mobile-only News Feed ads outperform desktop
ads by significant margins; CTR is a 187% higher on mobile and CPCs for ads served
on the mobile News Feed are 22% lower. However, as competition in the mobile
targeting auction increases in 2014, we may see competitive KPIs such as CPCs
increase correspondingly.
Source: Marin Social Index (MSI) data from Q2-Q3 2013
SPEND SHARE BY DEVICE
10%
0%
20%
30%
40%
50%
60%
70%
80%
90%
Q2 Q3
Desktop + Mobile Desktop Only Mobile Only Desktop + Mobile Desktop Only Mobile Only
CPC & CTR PERFORMANCE BY DEVICE
$
$0.05
$0.10
$0.15
$0.20
$0.25
$0.30 1.60%
0.20%
0.00%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
CTR CPC
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
Copyright © 2014 Marin Software Inc. All rights reserved. 9
Strategic Recommendations for Facebook Advertisers:
•	 Manage mobile campaigns separately from desktop: Split mobile-targeted
creative into separate campaigns from your desktop-targeted creative. Mobile
users tend to behave, research, and purchase in different ways than desktop
users. Therefore, a device segmentation approach will help ensure easier
management, reporting, budgeting, and optimization.
•	 Take advantage of Mobile App ads: Mobile App ads allow advertisers
to promote their mobile apps and encourage downloads on Google Play
or Apple iTunes. According to Internet Retailer, Facebook’s mobile app
install ads have a 10x higher download rate at a 20% lower cost-per-
download than web-based banner ads. If an advertiser has a mobile app,
Facebook’s mobile app install ad solution has the potential to dramatically
boost downloads.
•	 Ensure mobile-targeted campaigns match mobile user behavior: To be
successful on mobile, advertisers need to consider how their target audience
uses Facebook on a mobile device. Are they typically at home when they use
Facebook’s mobile app? If so, a marketer can use Facebook’s WiFi-only targeting.
If target users are more apt to log-in during peak commute times, advertisers
should schedule campaigns to run only during the times of the day when people
are likely to be commuting. An ad management platform automates much
of this process.
TREND #3:
FACEBOOK USERS ARE MORE LIKELY TO BUY FROM BRANDS
THEY’VE PREVIOUSLY ENGAGED WITH
Of the numerous changes Facebook has made to its advertising capabilities and workflow
over the last year, the social network’s audience targeting enhancements offer the most
potential to positively impact advertisers’ ROI. Facebook has always allowed advertisers
to get their message in front of specific Facebook user groups based on a wide range of
audience attributes; however, while targeting based on profile information has proven an
excellent way to reach relevant audiences at scale, it is also limiting for two reasons.
First, if users choose not to provide much information in their profile, advertisers will
not be able to reach them with relevant offers. Second, demographic, category, and
interest-based characteristics are not necessarily representative of a user’s buying
behaviors or potential to convert. Recognizing these limitations, in 2013 Facebook
expanded the ways advertisers could target users by including web browsing behavior
and purchase data. The new targeting feature, called Custom Audiences, enables
advertisers to easily target and retarget Facebook users not only by the type of person
they are but also by the type of potential buyer they are.
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
Copyright © 2014 Marin Software Inc. All rights reserved. 10
Custom Audience targeting provides marketers with a simple solution for reaching
highly specific audience segments using a combination of Facebook-provided interest
data and first-party customer or prospect data owned by the advertiser. For example,
Custom Audience targeting would allow an outdoor retailer to target “a potential
customer who visited our site to browse kayaks, is located in Seattle,
and is interested in open-sea kayaking.”
Custom Audiences allow advertisers to target and retarget in-market consumers using
first-party data – offering greater flexibility, transparency, and control than third-party
Facebook Exchange (FBX) targeting. The inherent value of Custom Audience targeting
has prompted an increase in adoption. Marin found the number of advertisers using
Custom Audiences increased 82% from Q2 to Q3 2013.
Marin’s research reveals Custom Audiences deliver a higher conversion rate at a lower
cost. On average, Custom Audiences targeting has a 14% lower CPC and a 64% lower
cost-per-conversion than category- or interest-based targeting alone. Additionally,
ad-creative using Custom Audience targeting had conversion rates 3.87x greater
than ad-creative using only demographic or category-based targeting options.
Source: Marin Social Index (MSI) data from Q2-Q3 2013
Custom Audiences Category / Interests
CPA: CUSTOMER AUDIENCES VS. CATEGORY / INTEREST TARGETING
$
$0.50
$1.00
$1.50
$2.00
$2.50
$3.00
$3.50
$4.00
$4.50
$5.00
$1.58
$4.49
“Facebook adver-
tising has become
less about targeting
a specific type of
person and more
about targeting
a specific type
of buyer. Custom
Audiences has
allowed us to
retarget website
visitors and
customers
with amazing
efficiency and
accuracy.”
Chase Wells,
Director of
Performance
Marketing,
Webtrends
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
Copyright © 2014 Marin Software Inc. All rights reserved. 11
Strategic Recommendations for Facebook Advertisers:
•	 Nurture website leads: With a CRM system, advertisers can segment email
leads that have been captured and create a Facebook Custom Audiences based
on this segment. They can then create a “lead nurturing” campaign targeting this
Custom Audiences segment and target ads to the segment using a similar content
strategy for email campaigns. For example, in the creative an advertiser could
include industry updates, links to webinars and white papers, and best practices.
•	 Retarget users who abandoned the conversion process: FBX has become
a popular way to retarget Facebook users who have previously visited a website.
Advertisers can also use Custom Audiences to retarget customers on Facebook.
If an advertiser tracks website visitors who have abandoned the site during the
conversion process, the advertisers can then use Custom Audiences to retarget this
segment in an effort to bring the visitors back to the site. Advertisers should provide
a compelling reason to visit in the ad creative, such as a discount or special offer.
•	 Reach the friends of current customers: Customs Audiences also presents advertisers
with the opportunity to reach the friends of current customers. For example, Disney
could target the friends of customers who recently stayed at one of their resorts with
a message highlighting the fact that they too can have their “dreams come true.”
TREND #4:
FACEBOOK USERS ARE MORE LIKELY TO ENGAGE WITH
“FRESH” CREATIVES
As the number of marketers using Facebook quickly grows, so does the competition
for high-value ad placements. As a result, it is critical that advertisers ensure their
ads are as compelling and engaging as possible, especially since Facebook does not
promote ads in the News Feed unless the ad maintains a high CTR.
To maintain a high CTR, marketers must continually optimize, test, and improve ad
creative. In particular, advertisers must pay careful attention to frequency, rotating
ads to ensure they are not shown too often. When the same ads are shown to the same
targets over and over, “ad fatigue” can occur – causing consumers to not only ignore
your ads but become irritated by your brand.
It is commonly understood throughout the Facebook advertising industry that if an ad
does not garner a high CTR within the first 3-5 days of exposure, impressions will quickly
drop for the creative and impression volume will likely never recover. The below screen-
shot is an example of how impressions for a leading retailer’s Facebook ad campaign
creative dropped within three days of launching due to a low CTR.
“Creative Rotation
has helped us main-
tain performance
over time, and the
automated bid
optimization
ensures we are
as effective as
possible with
ad-spend.”
James Connell,
Search Director,
Path Interactive
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
Copyright © 2014 Marin Software Inc. All rights reserved. 12
Successful Facebook advertisers are using advanced optimization techniques to refresh
ad creative an average of every 2-3 days and in some cases as often as every hour
to maintain strong performance in competitive auctions. According to Marin’s data,
41% of Facebook advertisers use a change in CTR as a trigger for rotating creative.
Advertisers using CTR-based creative rotation strategies typically believe that CTR
drops are predictive of future drops in impression volume, based on the assumption
that Facebook will devalue low CTR creative in auctions.
The second most popular creative rotation technique is intraday creative rotation, with
35% of advertisers using this approach. Advertisers using this technique typically believe
that rotating campaign creative frequently - regardless of performance changes — is the
safest way to keep consistent impression volumes.
Source: Marin Social Index (MSI) data from Q2-Q3 2013
41%
11%
35%
13%
Change in CTR
Change in Impressions
Number of Days
Intraday
DISTRIBUTION OF CREATIVE ROTATION STRATEGIES
DID YOU KNOW:
Direct response
advertisers who
utilize Facebook
creative rotation
strategies
experience:
•	 35% higher CTR
•	 4% higher
conversion rates
•	 38% lower CPC
•	 34% lower CPA
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
13
Marin found the number of Facebook advertisers using creative rotation strategies
increased by 21% in Q3 2013 compared to Q2 2013, and for good reason. Advertisers
who use creative rotation to eliminate ad fatigue tend to have significantly better
performance than those who don’t. Direct response campaigns using automated
creative rotation produce 35% higher CTRs at 34% lower costs per conversion
than campaigns that do not utilize automated creative rotation. Fan acquisition
campaigns using creative rotation also produce 60% higher CTRs at 75% lower
costs per fan than campaigns that do not use creative rotation.
Source: Marin Social Index (MSI) data from Q2-Q3 2013
Strategic Recommendations for Facebook Advertisers:
•	 Get ad content right: First and foremost, advertisers should ensure that their ad
creative follows standard Facebook design best practices. Messages should be short
and concise, and specifically tailored for the target audience. To avoid truncation,
text should be limited to 90 characters. Images carry the greatest impact and
should be chosen wisely. Consider using headshot images of people or close-up
pictures of products. For Page post ads, text should be just 20% of the overall ad
and include social context such as a website link to maximize conversion rate.
•	 Conduct a frequency analysis to inform creative strategy: Advertisers should
aim for frequencies of 1-5 exposures per ad and never expose a user to the same
ad more than 10 times. By analyzing the relationship between impression volume,
CTR, and frequency, advertisers can identify ad fatigue. Marketers should also
study their highest-volume campaigns with the greatest performance volatility.
Often, higher-than-recommended frequency leads to quick drops in CTR and
impressions. If an advertiser sees a correlation between these three indicators,
their campaigns are likely suffering from ad fatigue. Sophisticated advertisers
use creative rotation services available in an ad management platform to manage
ad frequency and maintain consistent CTR and impression volumes.
•	 Utilize automated creative rotation to improve performance: Creative rotation
has become one of the most common strategies among leading Facebook advertisers
for managing frequency and maintaining consistent CTRs and impression volumes.
While manually refreshing campaign creatives can help to improve performance, it is
difficult to manage at scale across hundreds of campaigns and thousands of creatives.
Facebook marketers looking to quickly grow their programs should utilize a Facebook
management platform with automated creative rotation capabilities for best results.
CAMPAIGN PERFORMANCE USING ROTATION STRATEGY:
DIRECT RESPONSE CAMPAIGNS
-40%
-30%
-20%
-10%
0
10%
20%
30%
40%
CTR
CPC CPA
Conversion
Rate
Conversion
Rate
CAMPAIGN PERFORMANCE USING ROTATION STRATEGY:
FAN ACQUISITION CAMPAIGNS
-80%
-60%
-40%
-20%
0
20%
40%
60%
80%
CTR CPC Conversion
Rate
Conversion
Rate
Cost Per
Fan
Cost Per
Fan
Cost Per
Fan
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
14
CONCLUSION:
Facebook’s global user base has and is predicated to continue to grow at an unprecedented
rate, both in terms of volume and level of engagement. Facebook’s growth in monthly
active users, combined with exciting innovations in advertising, have turned Facebook
into the industry’s fastest growing advertising channel. Enhancements in ad placement,
creative formats, mobile targeting and audience targeting have created opportunities
for advertisers to drive revenue at an attractive ROI. However, in other areas such as
frequency management and creative testing, Facebook continues to lag behind other
channels in terms of reporting and management.
To ensure success in 2014, marketers must adopt sophisticated advertising techniques
to take advantage of the opportunities Facebook advertising presents, and overcome
the channel’s shortcomings. To grow conversion volume, successful Facebook marketers
will target mobile users and shift budgets toward News Feed advertising. To improve
efficiency and better optimize their programs, Facebook marketers will also adopt
retargeting strategies through Custom Audiences and focus on preventing overexposure
of ads through automated creative rotation techniques. Finally, as competition for
high-value audiences increases and advertising options become increasingly complex,
successful Facebook marketers will require the use of an elite management tool to
help them manage complexity, make better decisions faster, and reach their financial
objectives by managing toward a variety of revenue sources. Marin Software’s
leading Revenue Acquisition Management platform enables marketers to manage
and optimize large-scale Facebook campaigns for maximum impact and ROI.
Visit marinsoftware.com for more information.
METHODOLOGY:
The data analyzed by Marin Software reflects a representative sample of over 100
clients managing Facebook programs with active campaigns tracking impressions,
clicks, conversions and revenue between April 1 and October 31, 2013. The Marin
Social Index (MSI) index utilizes a longitudinal analyses approach across advertisers
and agencies representing the Retail, Travel, B2B, Technology, Healthcare and Finance
verticals. Estimates for changes in user adoption are based on changes in spend volume
for the examined ad types, targeting types and placement types for Q3 2013 vs. Q2
2012. Performance comparisons between ad types, targeting types and placement
types were based on available data between April 1 and October 31, 2013.
Facebook®
is a registered trademark of Facebook Inc.
For more information:
	 info@marinsoftware.com
	 insights.marinsoftware.com
	@MarinSoftware
“Marin Software is
different from many
other Facebook
advertising manage-
ment platforms,
as they understand
that Facebook
plays a role further
up the sales funnel.
The fact you can
manage Facebook
alongside other
channels such as
search and display
means you can
gain an under-
standing of how
Facebook Ads are
working as part of
your online media
mix and not in a
silo. Their workflow,
campaign manage-
ment and optimisa-
tion features also
mean we save a
lot of time and
gain a greater
focus on ROI in
a scalable way.”
Cormac Doyle,
Senior Online
Marketing Manager,
Stylistpick
The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know
Copyright © 2014 Marin Software Inc. All rights reserved. 15
(415) 399-2586
info@marinsoftware.com
www.marinsoftware.com
123 Mission Street,
25th Floor
San Francisco, CA 94105
© 2013 Marin Software. All rights reserved. Other trademarks belong to their respective owners. WP 277_122614
ABOUT MARIN SOFTWARE
With more than $6 billion in annualized advertising spend, Marin Software (NYSE: MRIN) is the
leading digital ad management platform in the world. Offering an integrated platform for search,
display, social, and mobile advertising, Marin helps the world’s best brands and agencies simplify
their advertising workflow while dramatically increasing ad performance. Powering advertising
campaigns in more than 160 countries, Marin’s technology transforms data into insights and
complexity into opportunity for hundreds of global advertisers and agencies. For more information
about Marin’s solutions, please visit: www.marinsoftware.com/solutions/overview.
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Portland, OR 97204
Tel: +1 ((971) 302-619
EMEA
United Kingdom
1st Floor, Orion House,
5 Upper St Martin’s Lane,
London, WC2H 9EA
Tel: +44 (0)845 262 0404
France
Actualis Level 2
21 and 23 Boulevard Haussmann
Paris 75009
Tel: +33 1 80 95 68 60
Germany
Am Kaiserkai 1
20457 Hamburg
Tel: +49 40 80 80 74-522
Ireland
Suite 204
28-32 Upper Pembroke Street
Dublin, 2
APAC
Singapore
One Raffles Quay
North Tower, Level 25
048583
Tel: +65 6622 5888
Japan
3rd Floor, Sanno Park Tower
2-11-1 Nagata-cho
Chiyoda-ku
Tokyo 100-6162
Tel: +81 3 6205 3179
Australia
Level 33
Australia Square
264 George Street
Sydney NSW 2000
Tel: +61 (0)2 9258 1820

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2014 facebook adplaybook_whitepaper

  • 1. WHITEPAPER The Definitive Facebook Advertising Playbook: The 4 Key Trends and 12 Strategies You Need to Know for 2014 2014
  • 2. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know Copyright © 2014 Marin Software Inc. All rights reserved. 2 TABLE OF CONTENTS Introduction 03 Trend #1: 05 Marketers Embrace News Feed as Vehicle for Native Advertising Trend #2: 07 Facebook Users Embrace Mobile as Medium of the Future Trend #3: 09 Facebook Users Are More Likely to Buy from Brands They’ve Previously Engaged With Trend #4: 11 Facebook Users Are More Likely to Engage With “Fresh” Creatives Methodology 14 Conclusion 14 About Marin 15
  • 3. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know 3 INTRODUCTION Facebook has built the largest, most highly-engaged audience on earth, with a significant percentage of the world’s population logging on daily. Consider the numbers; Facebook boasts over 1.19 billion monthly active users and continues to add more each month. Users are also logging on and spending more time on the platform than ever before. In fact, according to Facebook earnings reports, daily active users rose 25% year- over-year to 728 million in Q3 2013. Source: Publicly available Facebook Q3 2013 earnings report data, acquired through businessinsider.com For advertisers, Facebook’s meteoric rise and massive audience represents an excellent opportunity to build brand awareness and acquire revenue. Brands must reach consumers where they spend the most time, and it’s clear that consumers spend large amounts of time on Facebook. Fortunately, it’s now possible to reach highly targeted segments on Facebook using a combination of Facebook’s own tools and third-party ad management platforms like Marin Software. By deploying advanced strategies on Facebook, advertisers can not only reach more of the right consumers with the right messages but build lasting engagement with loyal customers. Q3’11 MONTHLY ACTIVE USERS (MAUs) IN MILLIONS US & CANADA 176 221 196 207 179 229 212 225 183 239 234 245 186 246 255 268 186 253 277 288 193 261 298 304 195 269 319 327 198 272 339 346 199 276 351 362 800 845 901 955 1,007 1,056 1,110 1,155 1,189 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 EUROPE ASIA REST OF THE WORLD DID YOU KNOW: The number of daily active users (DAVs) on Facebook rose 25% year-over-year in Q3 2013 vs Q3 2012.
  • 4. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know 4 This white paper will highlight the four most important Facebook advertising trends of 2013 and reveal top tips advertisers can use to maximize their Facebook advertising ROI in 2014: Executive Summary of Key Advertising Trends for 2014: 1.) Marketers Have Embraced Facebook’s News Feed as a Vehicle for Native Advertising : News Feed has become the primary area of focus and engagement for users, creating bright opportunities for advertisers. Marin saw a 140% quarter- over-quarter increase in News Feed advertising in Q3 2013 with 67% lower costs per conversion compared to right-hand side ad placements. 2.) Facebook Users Have Embraced Mobile as Medium of the Future: Mobile adoption among Facebook users skyrocketed in 2013 with 74% of Facebook users now accessing the platform through their mobile devices. This increase in mobile adoption, combined with attractive click-through rates (CTR) via mobile advertising, has changed the way advertisers manage their campaigns. In fact, Marin saw the percentage of advertisers running mobile-only campaigns increase 45% between Q2 2013 and Q3 2013. 3.) Facebook Users Are More Likely to Buy from Brands They’ve Previously Engaged With: Of all the changes Facebook introduced to their advertising capabilities, perhaps none was more important than Custom Audiences. Custom Audiences makes it possible for most advertisers with a customer list to retarget. Retargeting customers through Custom Audiences has already proven to be the most cost effective targeting option, producing costs per conversion that are 64% lower than targeting by Broad Categories or Precise Interests according to Marin Software data. 4.) Facebook Users Are More Likely to Engage With “Fresh” Creatives: As Facebook advertising has become increasingly competitive, the company has become strict on showing ads with the highest CTR. To maintain “fresh” creatives and prevent overexposing users to the same ads, Marin has seen a substantial increase in advertisers using creative rotation strategies. On average, advertisers working with Marin using creative rotation strategies have produced 35% higher CTR than those not using creative rotation, demonstrating that users prefer and are more likely to engage with fresh creatives.
  • 5. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know 5 TREND #1: MARKETERS EMBRACE NEWS FEED AS VEHICLE FOR NATIVE ADVERTISING Native advertising is a trend not only on Facebook, but across the entire web. Native advertising is a strategy whereby the advertiser attempts to gain attention by providing content in the context of the user’s experience. Native ad formats match both the form and the function of the user experience in which it is placed. Publishers are increasingly offering advertisers new native ad formats integrated directly into the content stream as a substitute for traditional banner ads, which typically do not drive a high volume of traffic or engagement. No publisher stands to benefit from the shift towards native advertising more than Facebook, which allows advertisers to display ads in News Feed as part of a user’s personal content stream. Facebook launched News Feed ads in late 2012 as a complement to its original right- hand side display ads. Compared to traditional right-hand side advertising placements, News Feed placements are designed to blend into the users’ natural, social experience on Facebook rather than on the periphery of the page. Recognizing the opportunity to drive engagement and website traffic, Facebook advertisers quickly adopted News Feed creative types like the Page post ad, which allows for large images and customized deep links to the advertiser’s website. Marin Software’s data shows advertisers increased spending on News Feed ads by 140% in Q3 of 2013 compared to a quarter earlier, highlighting that advertisers are rapidly adopting the placement type as part of their broader Facebook advertising strategy. DID YOU KNOW: Compared to right- side ad placements, News Feed place- ments drive an average of: • 44x higher clickthrough rates • 67% lower costs per click • 5X higher conversion rate
  • 6. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know Copyright © 2014 Marin Software Inc. All rights reserved. 6 So far, the growth in News Feed advertising adoption is proving beneficial for advertisers. Consumers pay close attention to their News Feeds, so when a brand places compelling advertising content directly into that stream, consumers are more likely to engage with the ad. Marin data shows News Feed ads attained a 44x higher CTR and a 5x higher conversion rate than right-side display ads in Q3 of 2013 compared to a year earlier. News Feed ads achieve these stellar results at a 67% lower cost-per-click (CPC) and a 64% lower cost-per-acquisition (CPA) than right-side ads. Source: Marin Social Index (MSI) data from Q2-Q3 2013 Given the performance of News Feed ads, advertisers should focus their attention on optimizing their presence within the content stream. Doing so is particularly important when targeting mobile users, as News Feed ads are currently the only type eligible to appear on mobile devices. Strategic Recommendations for Facebook Advertisers: • Allocate at least half of budget toward News Feed placements: In addition to driving superior performance relative to the right-hand side, advertising in News Feed presents several additional key benefits for advertisers including increased visibility and mobile reach. As both mobile adoption and News Feed engagement increase amongst users, advertisers will need to begin allocating budgets toward the placements that are most likely to be seen by users. • Leverage Unpublished and Existing Page Post Ads: Over the past year, Page post ads have evolved into the top performing Facebook creative type for driving conversion. There are two flavors of this creative type – unpublished Page posts and existing Page posts. Ensure you are taking advantage of the distinct benefits each. For example, advertisers should promote organic Page posts that have garnered high levels of engagement and virality amongst Facebook users, which will immediately add “social context” to the target audience. Unpublished Page posts, which do not require a prerequisite post to your fan base, should be targeted at your audiences with the highest ROI and contain deep links to optimized landing pages. Newsfeed Only RHS Only Newsfeed & RHS CPC & CTR BY PLACEMENT TYPE $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% CPC CTR Newsfeed Only RHS Only Newsfeed & RHS CPA & CONVERSION RATE BY PLACEMENT TYPE $1.00 $0.00 $2.00 $3.00 $4.00 $5.00 $6.00 $7.00 $8.00 $9.00 7.00% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% CPA CONVERSION RATE “The News Feed has become an increas- ingly essential part of our Facebook advertising strategy. Using Unpublished Page post ads, we’ve been able to achieve Search- like performance on Facebook and will continue to expand our strategy in 2014.” Samantha Puma, Partner & Affiliate Network Officer, Open Universities
  • 7. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know 7 • Track ROI of News Feed placements: News Feed placements perform differently and therefore must be managed separately from right-hand side ads. Advertisers should ensure they are working with a Facebook ads management platform that can track not only conversions and ROI but also the lifetime value (LTV) of desktop and mobile News Feed placements separately from right-hand side placements. Elite Facebook management platforms like Marin Software can help advertisers roll up aggregate views of LTV by placement to help automate bid management and budgeting. TREND #2: FACEBOOK USERS EMBRACE MOBILE AS MEDIUM OF THE FUTURE Smartphones have spread faster than any consumer technology in human history, reaching market maturity faster than radio, TV, the commercial Internet and many other devices and technologies. According to Nielsen, 61% of US mobile subscribers now own a smartphone. In 2013, the surge in mobile adoption helped skyrocket Facebook’s mobile base, creating new opportunities for marketers. In its Q3 2013 investor summary report, Facebook reported 74% of Facebook users utilize the platform’s mobile app. Facebook also reports that the percentage of users who access Facebook exclusively through their mobile device increased by 19% in Q3 versus Q2 2013, highlighting that overall, users are gravitating toward using Facebook exclusively on their mobile devices. In Q3 of 2013, Facebook reported 874 million mobile monthly active users, a 45% year-over-year increase. Given the surge in mobile users, in 2014 it will be imperative that Facebook advertisers target users’ mobile devices. Source: Publicly available Facebook Q3 2013 earnings report data, acquired through marketingcharts.com FACEBOOK MOBILE MONTHLY ACTIVE USERS & AD REVENUES % OF MONTHLY ACTIVE USERS (MAUs) ON MOBILE / % OF AD REVENUES FROM MOBILE MOBILE 5 OF MAUs 60% 14% Q3 2012 Q3 2012 - Q3 2013 Q3 2012 Q3 2013 Q2 2013 Q3 2013 MOBILE 5 OF AD REVENUES 64% 14% 30% 41% 49% 74% 71% 68% DID YOU KNOW: There was a 45% increase in mobile only campaign spending between Q3 and Q2 2013?
  • 8. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know 8 In response to the proliferation of users of their mobile app, Facebook developed new mobile advertising solutions in 2013, primarily focused on the high-growth app market. According to Venture Beat, the mobile app market is expected to grow 257% between now and 2017 to over 200 billion total apps. The most widely adopted of Facebook’s mobile advertising solutions have been Mobile App ads, which help users discover and engage with new, relevant and interesting mobile apps through the Facebook News Feed. With their attractive cost-per-install rates, Mobile App ads have quickly become one of the more effective and efficient ways for advertisers to grow their mobile programs. When used in conjunction with Custom Audiences and / or Partner Categories, marketers can target Facebook mobile users based on their online and offline buying characteristics and drive them directly to their mobile app. For many Marin advertisers, Facebook’s Mobile App ads present a viable means of driving app downloads, app engagement and mobile sales at scale. With the growing distinctions between mobile and desktop user behavior and advertising options, Facebook marketers are beginning to create unique strategies for targeting users on different devices. One key strategy advertisers already utilize to optimize their mobile ad spend on Facebook is to split targeting into separate desktop and mobile campaigns, instead of creating one campaign for both devices. Marin data shows the percentage of advertisers opting for mobile-only campaigns increased 45% between Q2 and Q3 2013, suggesting that advertisers prefer to report, budget and bid on mobile differently than desktop. It is likely that performance was a key driver of this shift in management strategy. According to Marin data, mobile-only News Feed ads outperform desktop ads by significant margins; CTR is a 187% higher on mobile and CPCs for ads served on the mobile News Feed are 22% lower. However, as competition in the mobile targeting auction increases in 2014, we may see competitive KPIs such as CPCs increase correspondingly. Source: Marin Social Index (MSI) data from Q2-Q3 2013 SPEND SHARE BY DEVICE 10% 0% 20% 30% 40% 50% 60% 70% 80% 90% Q2 Q3 Desktop + Mobile Desktop Only Mobile Only Desktop + Mobile Desktop Only Mobile Only CPC & CTR PERFORMANCE BY DEVICE $ $0.05 $0.10 $0.15 $0.20 $0.25 $0.30 1.60% 0.20% 0.00% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% CTR CPC
  • 9. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know Copyright © 2014 Marin Software Inc. All rights reserved. 9 Strategic Recommendations for Facebook Advertisers: • Manage mobile campaigns separately from desktop: Split mobile-targeted creative into separate campaigns from your desktop-targeted creative. Mobile users tend to behave, research, and purchase in different ways than desktop users. Therefore, a device segmentation approach will help ensure easier management, reporting, budgeting, and optimization. • Take advantage of Mobile App ads: Mobile App ads allow advertisers to promote their mobile apps and encourage downloads on Google Play or Apple iTunes. According to Internet Retailer, Facebook’s mobile app install ads have a 10x higher download rate at a 20% lower cost-per- download than web-based banner ads. If an advertiser has a mobile app, Facebook’s mobile app install ad solution has the potential to dramatically boost downloads. • Ensure mobile-targeted campaigns match mobile user behavior: To be successful on mobile, advertisers need to consider how their target audience uses Facebook on a mobile device. Are they typically at home when they use Facebook’s mobile app? If so, a marketer can use Facebook’s WiFi-only targeting. If target users are more apt to log-in during peak commute times, advertisers should schedule campaigns to run only during the times of the day when people are likely to be commuting. An ad management platform automates much of this process. TREND #3: FACEBOOK USERS ARE MORE LIKELY TO BUY FROM BRANDS THEY’VE PREVIOUSLY ENGAGED WITH Of the numerous changes Facebook has made to its advertising capabilities and workflow over the last year, the social network’s audience targeting enhancements offer the most potential to positively impact advertisers’ ROI. Facebook has always allowed advertisers to get their message in front of specific Facebook user groups based on a wide range of audience attributes; however, while targeting based on profile information has proven an excellent way to reach relevant audiences at scale, it is also limiting for two reasons. First, if users choose not to provide much information in their profile, advertisers will not be able to reach them with relevant offers. Second, demographic, category, and interest-based characteristics are not necessarily representative of a user’s buying behaviors or potential to convert. Recognizing these limitations, in 2013 Facebook expanded the ways advertisers could target users by including web browsing behavior and purchase data. The new targeting feature, called Custom Audiences, enables advertisers to easily target and retarget Facebook users not only by the type of person they are but also by the type of potential buyer they are.
  • 10. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know Copyright © 2014 Marin Software Inc. All rights reserved. 10 Custom Audience targeting provides marketers with a simple solution for reaching highly specific audience segments using a combination of Facebook-provided interest data and first-party customer or prospect data owned by the advertiser. For example, Custom Audience targeting would allow an outdoor retailer to target “a potential customer who visited our site to browse kayaks, is located in Seattle, and is interested in open-sea kayaking.” Custom Audiences allow advertisers to target and retarget in-market consumers using first-party data – offering greater flexibility, transparency, and control than third-party Facebook Exchange (FBX) targeting. The inherent value of Custom Audience targeting has prompted an increase in adoption. Marin found the number of advertisers using Custom Audiences increased 82% from Q2 to Q3 2013. Marin’s research reveals Custom Audiences deliver a higher conversion rate at a lower cost. On average, Custom Audiences targeting has a 14% lower CPC and a 64% lower cost-per-conversion than category- or interest-based targeting alone. Additionally, ad-creative using Custom Audience targeting had conversion rates 3.87x greater than ad-creative using only demographic or category-based targeting options. Source: Marin Social Index (MSI) data from Q2-Q3 2013 Custom Audiences Category / Interests CPA: CUSTOMER AUDIENCES VS. CATEGORY / INTEREST TARGETING $ $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00 $1.58 $4.49 “Facebook adver- tising has become less about targeting a specific type of person and more about targeting a specific type of buyer. Custom Audiences has allowed us to retarget website visitors and customers with amazing efficiency and accuracy.” Chase Wells, Director of Performance Marketing, Webtrends
  • 11. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know Copyright © 2014 Marin Software Inc. All rights reserved. 11 Strategic Recommendations for Facebook Advertisers: • Nurture website leads: With a CRM system, advertisers can segment email leads that have been captured and create a Facebook Custom Audiences based on this segment. They can then create a “lead nurturing” campaign targeting this Custom Audiences segment and target ads to the segment using a similar content strategy for email campaigns. For example, in the creative an advertiser could include industry updates, links to webinars and white papers, and best practices. • Retarget users who abandoned the conversion process: FBX has become a popular way to retarget Facebook users who have previously visited a website. Advertisers can also use Custom Audiences to retarget customers on Facebook. If an advertiser tracks website visitors who have abandoned the site during the conversion process, the advertisers can then use Custom Audiences to retarget this segment in an effort to bring the visitors back to the site. Advertisers should provide a compelling reason to visit in the ad creative, such as a discount or special offer. • Reach the friends of current customers: Customs Audiences also presents advertisers with the opportunity to reach the friends of current customers. For example, Disney could target the friends of customers who recently stayed at one of their resorts with a message highlighting the fact that they too can have their “dreams come true.” TREND #4: FACEBOOK USERS ARE MORE LIKELY TO ENGAGE WITH “FRESH” CREATIVES As the number of marketers using Facebook quickly grows, so does the competition for high-value ad placements. As a result, it is critical that advertisers ensure their ads are as compelling and engaging as possible, especially since Facebook does not promote ads in the News Feed unless the ad maintains a high CTR. To maintain a high CTR, marketers must continually optimize, test, and improve ad creative. In particular, advertisers must pay careful attention to frequency, rotating ads to ensure they are not shown too often. When the same ads are shown to the same targets over and over, “ad fatigue” can occur – causing consumers to not only ignore your ads but become irritated by your brand. It is commonly understood throughout the Facebook advertising industry that if an ad does not garner a high CTR within the first 3-5 days of exposure, impressions will quickly drop for the creative and impression volume will likely never recover. The below screen- shot is an example of how impressions for a leading retailer’s Facebook ad campaign creative dropped within three days of launching due to a low CTR. “Creative Rotation has helped us main- tain performance over time, and the automated bid optimization ensures we are as effective as possible with ad-spend.” James Connell, Search Director, Path Interactive
  • 12. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know Copyright © 2014 Marin Software Inc. All rights reserved. 12 Successful Facebook advertisers are using advanced optimization techniques to refresh ad creative an average of every 2-3 days and in some cases as often as every hour to maintain strong performance in competitive auctions. According to Marin’s data, 41% of Facebook advertisers use a change in CTR as a trigger for rotating creative. Advertisers using CTR-based creative rotation strategies typically believe that CTR drops are predictive of future drops in impression volume, based on the assumption that Facebook will devalue low CTR creative in auctions. The second most popular creative rotation technique is intraday creative rotation, with 35% of advertisers using this approach. Advertisers using this technique typically believe that rotating campaign creative frequently - regardless of performance changes — is the safest way to keep consistent impression volumes. Source: Marin Social Index (MSI) data from Q2-Q3 2013 41% 11% 35% 13% Change in CTR Change in Impressions Number of Days Intraday DISTRIBUTION OF CREATIVE ROTATION STRATEGIES DID YOU KNOW: Direct response advertisers who utilize Facebook creative rotation strategies experience: • 35% higher CTR • 4% higher conversion rates • 38% lower CPC • 34% lower CPA
  • 13. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know 13 Marin found the number of Facebook advertisers using creative rotation strategies increased by 21% in Q3 2013 compared to Q2 2013, and for good reason. Advertisers who use creative rotation to eliminate ad fatigue tend to have significantly better performance than those who don’t. Direct response campaigns using automated creative rotation produce 35% higher CTRs at 34% lower costs per conversion than campaigns that do not utilize automated creative rotation. Fan acquisition campaigns using creative rotation also produce 60% higher CTRs at 75% lower costs per fan than campaigns that do not use creative rotation. Source: Marin Social Index (MSI) data from Q2-Q3 2013 Strategic Recommendations for Facebook Advertisers: • Get ad content right: First and foremost, advertisers should ensure that their ad creative follows standard Facebook design best practices. Messages should be short and concise, and specifically tailored for the target audience. To avoid truncation, text should be limited to 90 characters. Images carry the greatest impact and should be chosen wisely. Consider using headshot images of people or close-up pictures of products. For Page post ads, text should be just 20% of the overall ad and include social context such as a website link to maximize conversion rate. • Conduct a frequency analysis to inform creative strategy: Advertisers should aim for frequencies of 1-5 exposures per ad and never expose a user to the same ad more than 10 times. By analyzing the relationship between impression volume, CTR, and frequency, advertisers can identify ad fatigue. Marketers should also study their highest-volume campaigns with the greatest performance volatility. Often, higher-than-recommended frequency leads to quick drops in CTR and impressions. If an advertiser sees a correlation between these three indicators, their campaigns are likely suffering from ad fatigue. Sophisticated advertisers use creative rotation services available in an ad management platform to manage ad frequency and maintain consistent CTR and impression volumes. • Utilize automated creative rotation to improve performance: Creative rotation has become one of the most common strategies among leading Facebook advertisers for managing frequency and maintaining consistent CTRs and impression volumes. While manually refreshing campaign creatives can help to improve performance, it is difficult to manage at scale across hundreds of campaigns and thousands of creatives. Facebook marketers looking to quickly grow their programs should utilize a Facebook management platform with automated creative rotation capabilities for best results. CAMPAIGN PERFORMANCE USING ROTATION STRATEGY: DIRECT RESPONSE CAMPAIGNS -40% -30% -20% -10% 0 10% 20% 30% 40% CTR CPC CPA Conversion Rate Conversion Rate CAMPAIGN PERFORMANCE USING ROTATION STRATEGY: FAN ACQUISITION CAMPAIGNS -80% -60% -40% -20% 0 20% 40% 60% 80% CTR CPC Conversion Rate Conversion Rate Cost Per Fan Cost Per Fan Cost Per Fan
  • 14. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know 14 CONCLUSION: Facebook’s global user base has and is predicated to continue to grow at an unprecedented rate, both in terms of volume and level of engagement. Facebook’s growth in monthly active users, combined with exciting innovations in advertising, have turned Facebook into the industry’s fastest growing advertising channel. Enhancements in ad placement, creative formats, mobile targeting and audience targeting have created opportunities for advertisers to drive revenue at an attractive ROI. However, in other areas such as frequency management and creative testing, Facebook continues to lag behind other channels in terms of reporting and management. To ensure success in 2014, marketers must adopt sophisticated advertising techniques to take advantage of the opportunities Facebook advertising presents, and overcome the channel’s shortcomings. To grow conversion volume, successful Facebook marketers will target mobile users and shift budgets toward News Feed advertising. To improve efficiency and better optimize their programs, Facebook marketers will also adopt retargeting strategies through Custom Audiences and focus on preventing overexposure of ads through automated creative rotation techniques. Finally, as competition for high-value audiences increases and advertising options become increasingly complex, successful Facebook marketers will require the use of an elite management tool to help them manage complexity, make better decisions faster, and reach their financial objectives by managing toward a variety of revenue sources. Marin Software’s leading Revenue Acquisition Management platform enables marketers to manage and optimize large-scale Facebook campaigns for maximum impact and ROI. Visit marinsoftware.com for more information. METHODOLOGY: The data analyzed by Marin Software reflects a representative sample of over 100 clients managing Facebook programs with active campaigns tracking impressions, clicks, conversions and revenue between April 1 and October 31, 2013. The Marin Social Index (MSI) index utilizes a longitudinal analyses approach across advertisers and agencies representing the Retail, Travel, B2B, Technology, Healthcare and Finance verticals. Estimates for changes in user adoption are based on changes in spend volume for the examined ad types, targeting types and placement types for Q3 2013 vs. Q2 2012. Performance comparisons between ad types, targeting types and placement types were based on available data between April 1 and October 31, 2013. Facebook® is a registered trademark of Facebook Inc. For more information: info@marinsoftware.com insights.marinsoftware.com @MarinSoftware “Marin Software is different from many other Facebook advertising manage- ment platforms, as they understand that Facebook plays a role further up the sales funnel. The fact you can manage Facebook alongside other channels such as search and display means you can gain an under- standing of how Facebook Ads are working as part of your online media mix and not in a silo. Their workflow, campaign manage- ment and optimisa- tion features also mean we save a lot of time and gain a greater focus on ROI in a scalable way.” Cormac Doyle, Senior Online Marketing Manager, Stylistpick
  • 15. The Definitive 2014 Facebook Advertising Playbook: Four Key Trends You Need to Know Copyright © 2014 Marin Software Inc. All rights reserved. 15 (415) 399-2586 info@marinsoftware.com www.marinsoftware.com 123 Mission Street, 25th Floor San Francisco, CA 94105 © 2013 Marin Software. All rights reserved. Other trademarks belong to their respective owners. WP 277_122614 ABOUT MARIN SOFTWARE With more than $6 billion in annualized advertising spend, Marin Software (NYSE: MRIN) is the leading digital ad management platform in the world. Offering an integrated platform for search, display, social, and mobile advertising, Marin helps the world’s best brands and agencies simplify their advertising workflow while dramatically increasing ad performance. Powering advertising campaigns in more than 160 countries, Marin’s technology transforms data into insights and complexity into opportunity for hundreds of global advertisers and agencies. For more information about Marin’s solutions, please visit: www.marinsoftware.com/solutions/overview. United States San Francisco 123 Mission Street 25th Floor San Francisco, CA 94105 Tel: +1 (415) 399-2580 New York 215 Park Avenue South Suite 1801 New York, NY 10003 Tel: +1 (646) 490-2427 Chicago 140 S. Dearborn Street Suite 300-A Chicago, IL 60603 Tel: +1 (312) 267-2083 Austin 800 Brazos Street Suite 320 Austin, TX 78701 Tel: +1 (512) 287-7478 Portland A317 SW Alder Street Suite 850 Portland, OR 97204 Tel: +1 ((971) 302-619 EMEA United Kingdom 1st Floor, Orion House, 5 Upper St Martin’s Lane, London, WC2H 9EA Tel: +44 (0)845 262 0404 France Actualis Level 2 21 and 23 Boulevard Haussmann Paris 75009 Tel: +33 1 80 95 68 60 Germany Am Kaiserkai 1 20457 Hamburg Tel: +49 40 80 80 74-522 Ireland Suite 204 28-32 Upper Pembroke Street Dublin, 2 APAC Singapore One Raffles Quay North Tower, Level 25 048583 Tel: +65 6622 5888 Japan 3rd Floor, Sanno Park Tower 2-11-1 Nagata-cho Chiyoda-ku Tokyo 100-6162 Tel: +81 3 6205 3179 Australia Level 33 Australia Square 264 George Street Sydney NSW 2000 Tel: +61 (0)2 9258 1820