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Whitepaper adsfor fans-webtrends
Whitepaper adsfor fans-webtrends
Whitepaper adsfor fans-webtrends
Whitepaper adsfor fans-webtrends
Whitepaper adsfor fans-webtrends
Whitepaper adsfor fans-webtrends
Whitepaper adsfor fans-webtrends
Whitepaper adsfor fans-webtrends
Whitepaper adsfor fans-webtrends
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Whitepaper adsfor fans-webtrends

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  • 1. ®WHITEPAPER / SOCIALFacebook’s Best Kept Secret:Building Conversions andRevenue with Ads for FansFacebook advertising is about much more than posting. If you aren’toptimizing Ads for Fans, it can be costing you conversions and revenue.By Justin Kistner, Director of Social Products, Webtrends
  • 2. At a Glance Business Trend • Facebook is now 800 million users strong and has evolved from a community site to the largest advertising opportunity in the world – bigger than Google, Yahoo, AOL and Microsoft. • Customers who like a brand on Facebook provide that company with valuable, opt-in list marketing opportunities, specifically, the ability to target fans with ads. • Fans avidly share their interest in brands with their friends because their engagement is exposed in the newsfeed. At Issue • Wall posts and fan pages with low engagement and affinity are filtered out by Facebook’s EdgeRank algorithm, and will fail to show up in fans’ newsfeeds. • Knowing what encourages engagement and how to optimize fan interest remain elusive to many marketers – who are seeking ways to monetize the channel. • Targeted ads are effective, but are the best kept secret on Facebook. Business Solution • Ads for Fans offer the greatest return on investment. • Brands can gain 7X greater click-through-rates by targeting fans with ads, which keeps cost per click, and cost per fan, at a minimum. • With advanced analytics solutions, marketers can roll-up Facebook data as part of an overall digital marketing performance report.WHITEPAPER / SOCIAL 2
  • 3. Facebook’s Best Kept Secret: Building Conversions and Revenue with Ads for Fans Thanks to a big-draw movie and countless news spots, everyone with an interest in social media knows the story of Facebook. Started in 2004 by college students as a way to connect with their friends, it has grown to a global social networking site of 800 million active users, with 700 million of those coming aboard in just the last three years. According to Edison Research, as of 2011, an estimated 51 percent of the U.S. population is on Facebook. It is expected to reach one billion fans sometime in 2012. Facebook, of course, isn’t all about individuals and friends sharing posts. It’s also about businesses and brands engaging with fans. But as the excitement from meeting your fan growth goals begins to subside, the reality of “Now what?” begins to seep into marketing plans. The executive suite wonders how you plan to engage, nurture and monetize those fans and show a return on investment. This is a point at which marketers often get stuck: How do you deliver real business value from your social campaigns? From community site to performance environment While Facebook is primarily known as a site where friends can communicate, as a business it has evolved. In just a short time, it has become a powerhouse of ad inventory, more than Yahoo!, Microsoft, Google and AOL, with nearly 180 billion U.S. display ad impressions alone. It is now a performance environment filled with media and ad campaigns, and with unprecedented opportunity for click-throughs, conversions and revenue streams. Ne t U.S. Displ ay A d R e v enue: Source: eM a r k e ter; Sep tember 20, 2011 Facebook offers a unique and valuable advertising environment. Why? Fans are 100 percent opt-ins – they want to be your friend and want to hear from you. And, they will tell their friends about you. Then why aren’t you getting better campaign results? The majority of Facebook fans of brands are customers primarily looking for deals, exclusive offers and benefits. This is a good, because customers buy 36 percent more products and services from a brand after becoming a fan. However, a brand’s presence in a fan’s newsfeed is dependent on the level of engagement with a fan page (liking, commenting, posting, sharing). If fans aren’t actively participating, then a brand’s page is filtered out by Facebook’s EdgeRank algorithm. That’s why some wall posts may have disappointing results. WHITEPAPER / SOCIAL 3
  • 4. There are other reasons why brands might be losing engagement. Testing has shown that traditional transactional ad content, containing language such as “percent off,” “coupon” and “sale,” attracts the lowest rates of fan engagement. Again, with low engagement, Facebook’s EdgeRank algorithm filters those posts out of the news stream. What does get the highest engagement? Facebook is a social networking site, so the type of activity that Facebook values most is conversations and sharing between friends. To encourage Facebook engagement and sharing, and not be shunned by Facebook’s EdgeRank filter, it is necessary to increase the “fun to talk about” factor in posts and ads. This is something Webtrends calls the Sociability Index, discovered while doing research about Facebook ads. Wh at clicks, wh at costs. Socia bilit y Ind e x . Source: Webtr ends, 2011. In the Sociability Index graphic above, blue bars represent cost per click (CPC). The longer the blue bar, the more each click costs. Red bars represent click-through-rate (CTR). The longer the red bar, the more clicks. There is a strong relationship between CTR and CPC, which is the higher the CTR, the less the CPC. Topics with long red bars are what people like most to talk about: travel, media, sports, fashion, luxury goods, beauty products, cars, tabloids and blogs. These topics are more social in nature. While a few industries have low sociability index ratings (health care, financial services and telecommunications, for example), knowing what fans like to talk about is important when creating posts or ads. To facilitate engagement, use status updates to ask fans for their opinion or preference. When it’s time to push offers, consider targeted ads. Because fans have opted-in, they are more likely to click on the ads.WHITEPAPER / SOCIAL 4
  • 5. Yet, despite the potential for conversion and revenue, marketers remain relatively unaware about Ads for Fans, even though the impact can be significant. Unfortunately, that is leaving money on the table. Who is a fan? Who Uses Facebook? Before placing ads, it is important to know what type of consumer is on Facebook. More than 60 percent are age 25-55+. Breaking that down even further, 29 percent are age 35-54 – that’s one-third of Facebook fans firmly in the category of greatest spending potential. Currently 25 percent of fans are age 25-34, and they are moving into their lucrative spending years. The age group with the highest CTR and the greatest amount of discretionary spending include those 55-64. Marketers may want to remember the adage, “the older we get the more we click.” If a product is geared to teens 13-17, age may be a reason an ad is not getting desired results on Facebook. They represent just 10 percent of users and the Source: http://www.istrategylabs.com/2010/01/facebook- demographics-and-statistics-report-2010-145-growth-in-1-year/ least likely age group to click on ads. How do Facebook users become your fans? The main drivers: 75 percent come from an invitation or an ad, 59 percent from a friend and 49 percent from search. Clearly, ads can have a significant impact on acquiring a solid fan base. Understanding Ads for Fans There are three common approaches to Facebook ads: 1. Using ads to drive website traffic; 2. Using ads to acquire fans; 3. Using sponsored stories, shared in a form of an ad to friends, such as "David likes this brand," to gain fans. Industries with low sociability index ratings need to carefully consider their ad topic in order to gain better CTR. For instance, if an insurance company sponsors a big football game, an Ad for Fans that highlights the game will prove better CTR than if the ad is directly selling insurance. To improve sharing, Facebook’s “friends of fans” targeting feature allows brands to expand audience reach byWHITEPAPER / SOCIAL 5
  • 6. delivering ads to the friends of people already connected with the page, application, group or event. When friends of fans see the ad, they’ll see that Cold call targeting averages their friends like the brand, and they in turn, will be more likely to become fans .05 percent CTR. Ads for Fans themselves. reap a .35 percent CTR. That’s 7X greater. Two other factors are also important to improving CTR: 1) college educated Facebook fans are twice as likely to click on ads if they see a friend’s name or face in the ad; and, 2) images that inspire “what is that,” or “I want to see more,” are most successful. That’s different from the way Google ads work, which don’t contain images. A bucket plan for success on Facebook Acquiring fans through ads is the first step on the journey to monetizing marketing efforts, and it is one of the most effective methods a company can use to build a customer base and drive conversions. Ads for Fans deliver the best return on investment. Webtrends has worked with brands around the world to optimize Ads for Fans, and has developed a best practices approach to advertising budgets. Rather than place the entire budget into one type of ad, three budget buckets are advised. The Nurture Fans bucket is used to deliver offers to existing fans, driving them to landing pages on your website and fan page. This bucket helps you achieve the greatest return on investment. The Acquire Fans bucket is about building your fan list. If your fan base is already good, spend less than half of your budget on acquiring more fans. If you have a very large fan base (over 1 million fans), use less than 20 percent of your budget for acquisition. The Friend of Fan Targeting bucket is for acquiring and nurturing, reaching out with ads or sponsored stories to friends of your fans. These efforts bring you greater results than simply cold calling for fans. Why? Because your fans are the best brand ambassadors you have and their friends will notice their preferences. It is human nature to associate with people who have things in common with us.WHITEPAPER / SOCIAL 6
  • 7. When creating Facebook campaigns, it is good practice to have a variety of ad creative ready available for rotation. Facebook ads have a quick burnout rate. An average ad will have a peak CTR in the first three days it appears; after that, it becomes more costly to run. That means if you have a 30-day campaign, plan for at least 10 creative refreshes. Driving traffic for Ads for Fans Unlike other online ad environments, Facebook is a destination site. While your fans may click through to your website, data shows they will return to Facebook. You will experience higher conversion rates if the initial landing page experience stays within Facebook. That’s because after context is provided within Facebook, fans are more willing to take action on your website. Custom tabs, placed in the left sidebar on Facebook pages, make effective landing pages. If a “ Gordmans, an Omaha- customer conversion takes place within Facebook, thats all the better based apparel and home for engagement. 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   Drive ads first within Facebook, using friends of fans, landing pages, events or custom tabs. 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! Custom  tabs Sponsored Likes also decreased the cost per click by 70% and cost per fan by   Custom Tabs 83% overall. That’s like getting a 77% discount off from Facebook! To read the entire Gordmans Facebook case study, go to www.webtrends.comWHITEPAPER / SOCIAL 7
  • 8. Tracking campaign activity and conversions from Facebook Whether ads drive fans to another Facebook page or to a website, it is important to track activity with campaign ID urls. To accomplish this, you’ll need to use an analytics solution, such as Webtrends, that allows conversion tracking through Facebook’s unique environment. Typical conversion goals may include downloading white papers, case studies, webinars, trial software downloads, Ecommerce, coupons or trial products, depending on the industry.   Like Ad   App Post     Tweet Site Email Choosing a robust analytics solution for Facebook advertising The analytics solution you choose to track, test and target Facebook advertising must be able to support passing campaign data, allowing brands to track a Facebook campaign as is done on a standard website. And, to follow a Facebook visitor through to another property, such as a website, the analytics solution has to support cross- domain tracking. With Webtrends, brands can: • Track conversions through iframe tabs, an HTML structure that allows an external page to be embedded on Facebook fan pages • Maintain visit history even as visitors cross domains • Collect Facebook-specific data such as fan status, gender, language, and more • Measure and compare performance across all digital channel • Enjoy open, flexible analysis for visual reporting In addition, Webtrends allows brands to create and manage ad spend, segment with micro-targeting and set up ad rotation.WHITEPAPER / SOCIAL 8
  • 9. Unified reporting in Webtrends gives marketers a comprehensive view of all digital marketing performance. Rolling up Facebook data into a unified performance reporting Ads for Fans campaigns can be measured, tested, targeted and optimized to gain better performance, just as marketers have done with websites for years. But, it is also important to know how the results of advertising in Facebook compares to and fits into your overall digital marketing strategy. This is one the major challenges of the new digital landscape. Advanced analytics, such as the solutions offered by Webtrends, allow data to be compared and unified across all channels –web, mobile and social. This offers the senior marketer the best business case for justification of investment, a path for achieving marketing performance, and a competitive advantage in the marketplace. For more information on Ads for Fans as well as other Webtrends solutions for social marketing and measurement, visit http://webtrends.com/solutions/social/ About Webtrends Inc. Webtrends is the global leader in unified mobile, social and web analytics and engagement. We help marketers create, measure and improve campaigns for more than 3,500 global brands including: The New York Times, Microsoft, BMW, RIM, China Telecom, China Mobile, CCTV, Tencent QQ, Hitachi, The Associated Press, HSBC, Barclays, Vivo Cellular and Petrobras. Our leadership extends beyond the web analytics industry we founded to the measurement, optimization and integration of all digital content and customer intelligence, including web sites, social media, mobile and paid-search advertising. Webtrends is a registered trademark of Webtrends Inc. in the United States and other countries. All other trademarks and registered trademarks are the properties of their respective owners. 851 SW 6th Ave., Suite 1600 Webtrends Sales Europe, Middle East, Africa For offices worldwide, visit: Portland, OR 97204 1.888.932.8736 +44 (0) 1784 415 700 www.Webtrends.com 1.503.294.7025 sales@Webtrends.com emea@Webtrends.com fax: 1.503.294.7130WHITEPAPER / SOCIAL 9

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