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Conversion Optimization
The document discusses the importance of conversion optimization for businesses, highlighting how it can drive more sales and better target advertisements. It outlines the benefits of optimizing for conversions over clicks, providing success stories and best practices for creating effective ad campaigns. Key insights include the recommendation to optimize for conversions to achieve lower costs and higher website actions, as well as steps for setting up and evaluating campaigns.
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Conversion Optimization
- 1. Drive your truebusiness objective with conversion optimization Companion document 2 0 1 7 mm.yy.dd
- 2. Agenda 1. Whento use conversion optimization 4. Success stories 2. How does conversion optimization affect who sees your ads? 5. Setup and best practices 3. Conversion vs. click optimization
- 3. No. 1 When to useconversion optimization
- 4. Jasper’s Boutique A retailerlooking to drive more sales for their unique selection of products
- 5. Objective and Campaign Goal Theseadvertiser controls align their campaign with their business goals Conversion Event Optimization Goal Three major inputs Jasper’s Boutique will need to consider Conversions Purchase Conversions
- 6. Jasper’s Boutique canchoose from a number of campaign objectives
- 7. Then they createan ad set, and select the conversion event (the action on their website) they want to drive
- 8. Then they selecttheir optimization goal
- 9. No. How does conversion optimizationaffect who sees your ads? 2
- 10. What advertiser controlsaffect who sees Jasper’s ads? TARGETING Your defined target audience + OPTIMIZATION GOAL The outcome you tell us is important to you C L I C K S V I D E O V I E W SC O N V E R S I O N SL O C A T I O N I N T E R E S T S D E M O G R A P H I C S = WHO WILL SEE YOUR AD
- 11. When Jasper’s chooses theiroptimization goal, they influence who is most likely to see ad Total Target Audience (US 18-24)
- 12. When Jasper’s chooses theiroptimization goal, they influence who is most likely to see ad People more likely to convert. Some people are more likely to click. Optimizing for clicks means you’ll be more likely to reach these people. Optimizing for conversions means you’ll be more likely to reach these people. Optimizing for reach means you’ll have a better chance of reaching more people overall, whether or not they click or convert after they see your ad. Total Target Audience (US 18-24) People who see your ad, but not likely to take action.
- 13. When Jasper’s chooses theiroptimization goal, they influence who is most likely to see ad Joe JillJoe People more likely to convert. Some people are more likely to click. If you optimize for clicks, Jill and Joe may be equally likely to see your ad If you optimize for conversions, you’re more likely to reach Jill and other likely converters Total Target Audience (US 18-24) People who see your ad, but not likely to take action. Jill is many times more likely to convert than Joe
- 14. Jasper’s Boutique choseconversion optimization because they want purchases, not clicks C O N V E R S I O N O P T I M I Z A T I O N Facebook then shows ads to people in Jasper’s target audience that are likely to convert after seeing the ad
- 15. 15 How exactly doesthat happen?
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- 17. Optimizing for conversionsmeans your ads are more likely to be shown to people likely to convert TOTAL VALUE Advertiser Bid Estimated Action rates User Value× =+ Your bid for the event you selected as your optimization goal – i.e. your desired result How interesting do we think this individual is going to find this ad? Is this a high-quality ad? M A X I M I Z I N G A D V E RT I S E R VA L U E O P T I M I Z I N G CO N S U M E R E X P E R I E N C E For each individual, we rank eligible ads based on a “Total Value” for each ad What’s the likelihood that an impression shown to this person will lead to your desired result? The ad with the highest Total Value wins the auction and shows to the individual
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- 19. 19 Click-optimizedad Advertiser bid for aclick Estimated probability of a click × M A X I M I Z I N G A D V E RT I S E R VA L U E User Value+ O P T I M I Z I N G CO N S U M E R E X P E R I E N C E TOTAL VALUE= When you optimize for clicks, you’re more competitive in auctions for people likely to click When you optimize for conversions, you’re more competitive in auctions for people likely to convert TOTAL VALUE=Advertiser bid for a conversion Conversion-optimizedad M A X I M I Z I N G A D V E RT I S E R VA L U E Estimated probability of a conversion × User Value+ O P T I M I Z I N G CO N S U M E R E X P E R I E N C E
- 20. Deciding between clickor conversion optimization • Choose if clicks are your most important business outcome • Our system will prioritize delivery to people more likely to click (whether or not they’re likely to convert) • Choose if website actions (sales, signups, etc.) are your most important business outcome • Our system will prioritize delivery to people more likely to convert Click optimization Conversion optimization
- 21. 21 Conversion optimization drivesmore website actions Flexibility Optimize for any event you’ve set up on the FB PixelLower costs Shows fewer ads to people who click but don’t convert – minimizing waste More conversions Prioritizes showing ads to people who will increase bottom-line results (purchases, registrations, leads, etc.)
- 22. 1. Results reflect:(1) All ad sets with 5+ daily conversions that were switched from conversion optimization to click optimization during a 1-month period in Q1 2016; only ad sets with non-zero conversions before and after the switch were considered. (2) 2.4x CPA increase reflects the CPA difference observed at the 50th percentile of all ad sets considered. (3) CPA measured on 1-day post-click basis. 2. Results from two-week tests with 3 EMEA, 3 NA, and 1 APAC-based advertisers. Verticals included health & fitness, media, travel, eCommerce and retail. 22 Lower costs A 2016 Facebook study across 130K ad accounts found that campaigns optimized for clicks had a cost per conversion that was More conversions A 2017 Facebook study in partnership with 7 advertisers across different regions and verticals found that conversion optimization drove an average of 74% more conversions than click optimization 2 2.4xhigher than when optimized for conversions 1 Conversion optimization drives more website actions
- 23. Our platform hasevolved from focusing on proxy events (like ad clicks) to true business goals 2007 2012 2013 2014 2015 2016 2017… Mobile app installs Website conversions Reach and frequency In-app actions, Store visits … Impressions, Clicks Video views Return on ad spend (ROAS) Note: The momentum from clicks and other proxies to real business outcomes isn’t limited to Facebook. While bidding for clicks has been the norm on search for years, even search platforms are acknowledging1 that some clicks are less profitable than other clicks, and are offering more ways to optimize directly for conversions. 1. e.g. https://adwords.googleblog.com/2016/07/more-powerful-bid-automation-with-smart-bidding.html
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- 25. Source: https://www.facebook.com/business/success/current-meditation/ Enrolling morepeople with conversion-optimized ads Current Meditation The meditation studio tested conversion-optimized ads to encourage people to sign-up for its free trial class. 5xmore memberships from conversion-optimized ads 2.6xmore leads from conversion-optimized ads “We have seen significant traffic come from advertising on Facebook, after testing and finding the right formula—optimizing for conversions. The increase in guest volume has allowed us to prove out our model within a brand new industry.” Ross Weisman CEO, CURRENT MEDITATION
- 26. Source: https://www.facebook.com/business/success/alex-and-ani 26 Designingsuccess with more website conversions on Facebook ALEX AND ANI ALEX AND ANI partnered with Facebook to to test the performance of ads optimized for conversions compared to ads optimized for website clicks and traffic. After running a campaign to test whether ads optimized for conversions would drive more online sales than ads optimized for clicks, this jewelry brand discovered that conversion-optimized ads resulted in a higher return on ad spend. 22% more online sales from conversion- optimized ads than for click- optimized ads 18% lower cost per purchase for conversion-optimized ads 3.3Xreturn on ad spend with conversion- optimized ads “Get creative and test, test, test! We’re always looking for ways to improve and innovate, and Facebook gives us a lot of flexibility to try new things from many angles, including creative, targeting and optimization.” Torrie Belknap Digital Marketing Manager, ALEX AND ANI
- 27. Source: Placeholder text.2727 A new approach to boosting sales: In a bid to increase conversions, Tiket.com wanted to compare and understand the effectiveness of optimising for conversions versus optimising for clicks. Tiket.com For click-optimised ads, Facebook targets people who are more likely to click as an action. Ads optimised for checkout events reach people who are most likely to initiate checkouts, which is a stronger indicator of actual sales. While the cost per click was lower for click-optimised ads, Tiket.com achieved more website traffic, bookings and transactions with ads optimised for checkout events. 2.8xincrease in revenue 2xincrease in transactions 6xincrease in flight bookings Source: https://www.facebook.com/business/success/tiket-dot-com
- 28. Source: https://www.facebook.com/business/success/topix 28 Maximizingpage views Topix The entertainment media company ran a test campaign to determine whether optimizing for conversions or clicks would draw more people to its website. The week-long campaign, which ran March 10–17, 2017, unveiled clear results for the Topix team. Optimizing for conversions significantly outperformed optimizing for clicks. 4.6xmore content views using conversion optimization 79% lower cost per content view using conversion optimization 5.8xmore link clicks using conversion optimization “We will continue to experiment with optimizing for conversions, and use this strategy in our daily buying. We also plan to experiment with other custom conversions to see how we can continue to improve our traffic quality and lower our cost per visit.” Sara Davis DIRECTOR OF AUDIENCE ACQUISITION, TOPIX
- 29. 2929 Testing ad objectivesto support charitable donations through Facebook The charitable organization tested conversion-optimized ads and traffic-optimized ads to determine the most effective way to encourage people to donate to its cause. 76% decrease in cost per acquisition for conversion- optimized ads, compared to traffic-optimized ads 4Xmore donations (from choosing the most appropriate objective for the campaign), compared to traffic-optimized ads Save the Children US Source: https://www.facebook.com/business/success/save-the-children-us “We’re excited about being able to reach new audiences, grow our global movement and continue our tradition of innovation. Facebook advertising gives us the ability to target donor look-alikes at a relatively low cost with a fast speed to market, which is key for responding to emergencies.” Ettore Rossetti SENIOR DIRECTOR, SOCIAL BUSINESS STRATEGY & INNOVATION, SAVE THE CHILDREN
- 30. 3030 The entertainment companyincreased video views on its website by optimizing for conversions versus clicks. Watchable Watchable tested conversion-optimized ads and click-optimized ads to see which approach was most effective at increasing video views on its website. Using a multi-cell lift test, it created 2 identical campaigns and used the same ad creative which linked to a video hosted on the Watchable site. When it set a video view on its website as a conversion, Watchable saw better results with conversion optimization. 1.3Mpeople reached 12% increase in incremental unique people playing the video on mobile Source: https://www.facebook.com/business/success/watchable 16% increase in incremental mobile video views with conversion optimization
- 31. Social Blue Social Bluemoved their clients' entire budgets from CPC-website clicks campaigns to website conversion campaigns. Because of conversion optimization they increased the volume of conversions in 2016 by 18.6% compared to 2015 and decreased the CPA by 22%. They also achieved significant Efficiency gains: by having a lower number of ads being created in combination with conversion optimization as well as longer retention of the campaigns and broader audiences. Source: https://www.facebook.com/business/success/social-blue 19% Increase in the volume of conversions in 2016 thanks to Conversion Optimization 22% Decrease in CPA thanks to Conversion Optimization “We continually tailor our strategies to new developments in order to achieve the best ROIs for our clients. In 2016 we switched to conversion optimization with the Facebook Pixel and used it in combination with automatic bidding, which is a lot less time consuming than manually optimizing bids and campaigns. We saw that optimization towards conversions helps our clients reach their audiences with the highest probability to convert at the right time and through the most effective placements..” Tim Roemer CEO SOCIAL BLUE
- 32. No. 5 Conversion optimization setup andbest practices
- 33. Step 1: Create yourcampaigns with the the Conversions objective Guide: • Go to your Ads Manager • Select Create New Campaign • Choose the Conversions objective This will also work with the Product catalog sales objective Creating a conversion-optimized campaign Step-by-step guide
- 34. ) Step 2: Choose theconversion event you wish track Guide: • Create new ad set • Chose the desired conversion event (e.g. Purchase, Complete Registration, Lead) • Create the rest of the ad set as usual The event should be green to indicate that it has received traffic within the last 7 days Creating a conversion-optimized campaign Step-by-step guide
- 35. ) Step 3: Tell thesystem to optimize towards Conversions Guide: • Choose to optimize towards Conversions (the default selection) Optimizing towards conversions will find the people most likely to convert Creating a conversion-optimized campaign Step-by-step guide
- 36. Evaluate Conversion optimization bestpractices Edit Ad 1. Bid strategy Choose the right bid strategy for your campaign (e.g. lowest cost, target cost) 2. Delivery controls Set fewer constraints on your budget, targeting, bid, and placement 3. Conversion windows Set the appropriate conversion window 5. Switching conversion events If needed, switch conversion events, or to landing page views optimization 4. Conversion volume Try to capture the recommended number of conversions per ad set 6. User experience Monitor feedback and improve your landing page Create Ad 7. Measure the right things Track and evaluate performance based on the lower-funnel metrics that are most important to your business
- 37. Bid strategy Choose abid strategy that aligns with your goals and cost requirements More conversions More control Lowest cost Lets Facebook set a bid for your given conversion event (formerly Automatic bid) Lowest cost with a bid cap Set a bid cap to control your cost per conversion event (formerly ‘Maximum’ bid) Target cost Set an average cost per conversion event (formerly ‘Average’ bid) Bid Strategy and Description Recommended Use Case When unsure of how much to bid, and/or get the lowest cost per conversion event possible while spending full budget When you want to maintain a stable cost per conversion event as you increase your budget When you want to set a maximum bid to control your costs and want the lowest cost per conversion event possible 1 1
- 38. DAILY AVERAGE BUDGET> BID TARGETING EXPANSION AVOID UNDERBIDDING AUTOMATIC PLACEMENTS Delivery controls Set fewer constraints on delivery to allow the system to explore more options and find more of your desired result 2
- 39. Conversion windows CONSIDER PURCHASE CYCLES Alignthe conversion window to the purchase cycle for your product/service MEASURE CORRECTLY Align your delivery conversion windows and reporting attribution windows to understand the value of your ads 3 Set the right conversion window
- 40. Conversion volume Lowest costper result 50 conversions per ad set per week Target cost per result Recommended Minimum Number of Conversions Bid Strategy Facebook algorithms need a minimal number of conversions to optimize your ads efficiently. 4 More about bid strategies and bidding best practices: https://www.facebook.com/gms_hub/share/bidding_strategy_guide.pdf
- 41. CLICK ADD TO CART LANDING PAGE VIEW/ VIEW CONTENT PURCHASE INITIATE CHECKOUT A typical customer journey HIGHER INTENT Switching conversion events Conversion Event Funnel Landing Page View / View Content Leads Add to cart Purchase Initiate Checkout Add payment info 5 Consider optimizing for a higher-funnel event to reach the recommended number of conversions for learning 5
- 42. User experience Monitor feedbackand improve your landing page Monitor the positive and negative feedback for your ads 1. In-feed experience 2. Post-click experience 6 • Minimize landing page redirects, plugins and link shorteners • Compress files to decrease rendering time • Improve server response time by utilizing multi- region hosting • Use a high-quality Content Delivery Network to reach audiences quickly Improve the user experience by optimizing your landing page for mobile:
- 43. Measure the rightthings Track and evaluate performance based on the lower-funnel metrics that are most important to your business 7 • Even when you’re optimizing for higher-funnel pixel events (e.g. add to cart, landing page views), it’s important to evaluate campaign success based on your ultimate business objective • Be sure to track and measure the lower-funnel events that are most important to your business (e.g. Purchases, Leads, Complete Registrations). Tips: • Follow the full pixel implementation guide here if you haven’t defined lower funnel events on your pixel • Full conversions guide can be found here • Guidance on how to use reporting to analyze conversion campaigns can be found here.
- 44. 1. Optimization goal(i.e. the outcome you tell us is important to you) is critical in determining who sees your ads 2. Conversion optimization drives more website actions at lower costs than click optimization (not all clickers will convert on your website) 3. Broader targeting/placements and higher budgets per ad set allows the system to explore more options and find more of your desired result 4. With conversion optimization, always optimize towards the event closest to your desired result where there is enough conversion data (aim for 50 conversions per ad set per week) 5. Track/measure campaigns based on the event that’s most valuable to your business, even if you’re not optimizing towards it Things to remember
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- 47. • For advertiserslooking to drive website traffic, Landing Page Views optimization helps advertisers find more people likely to actually visit a website, instead of dropping off before the page has loaded • When compared to Link Click optimization, Landing Page View optimization increases the overall land rate (portion of clicks that actually result in landing page views) and decreases the cost per Landing Page View Landing page views optimization