Direct Response Marketing on Facebook

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1 Direct Response Marketing on Facebook Driving action online, in-store and in mobile app Summer

2 Table of contents Facebook s direct response marketing solution 4 Best practices 14 Campaign prep 16 Targeting 18 Creative and messaging 20 Bidding 21 Measurement 22 2

3 Introduction We live in a transformational time. As the need to stay connected becomes integral to our everyday lives, the use of smartphones, tablets and laptops is becoming increasingly common. Not only are people using multiple devices, they re constantly switching between them throughout the day. Marketers are faced with the challenge of reaching their consumers in this changing environment. With over 1.32 billion people1 on Facebook checking their News Feed an average of 14x per day2, Facebook provides a unique opportunity for businesses to drive positive business results with more of the right people across devices. Marketers can: Reach more of the right people with Facebook s sophisticated suite of targeting products Drive action across devices with ad units in News Feed Make insightful decisions with Facebook s measurement solutions From campaign prep to targeting, creative, bidding, measurement and optimization, this guide will walk you through our entire solution and best practices for setting up an effective direct response campaign. Sincerely, Your Facebook team 1, Facebook internal data, June IDC, Always Connected, March

4 Facebook direct response marketing solution Facebook offers a sophisticated direct response marketing solution for marketers to reach more of the right people, drive action across devices and make more insightful decisions. Whether you re driving sign-ups on your website, sales in store or installs for your mobile app, these products can help drive your business objectives from Facebook across devices. 4

5 Targeting Facebook has a powerful targeting solution that enables you to target based on the data people share on Facebook, your firstparty data and third-party data from trusted partners. Use these tools to find more of the right people you want to reach. Core Audiences Reach people based on interests, demographics, location and behavior. Facebook s core targeting option allows you to target people based on information shared on their profiles and the behavior they exhibit on Facebook. Segment your audiences based on their demographics, location, interests and behaviors. Partner categories are a way to target people based on their off-facebook behavior through our partnerships with trusted third-party data providers such as Datalogix, Epsilon and Acxiom. Success Story Banana Republic used lookalike audiences modeled after its most loyal customers to increase its customer base during the competitive holiday season. Result: A nearly 4X higher return on ad spend. Facebook case study, June 2014 Custom Audiences Reach people based on the data you have. Custom Audiences enable you to target people based on the data you have in a privacy safe way. With Custom Audiences, you can: Target people based on CRM data. Target people based on actions taken on your website or mobile app. Lookalike Audiences Reach people who look like your audiences. Lookalike audiences help you find people with similar characteristics to your existing customers, prospects and Page fans. You can build a lookalike audience from your: CRM database Website visitors Mobile app customers Page fans 5

6 Facebook Exchange: Dynamically remarket to website visitors on desktop Facebook Exchange allows programmatic buying of desktop ad inventory through real-time bidding. You can remarket to website visitors on Facebook based on the activity they exhibit on your website with real-time dynamic product ads. Facebook Exchange is only available for link ads and right-hand column on desktop and can only be purchased through a registered demand side platform (DSP). Custom Audiences and Facebook Exchange are complementary Remarketing through Facebook Exchange and Custom Audiences are similar but can be leveraged in different ways. Custom Audiences Facebook Exchange Mobile Delivery Ad Formats Standard ads, Page post ads, Mobile Standard ads (domain only) Page post ads (link only-beta) Placements All Facebook Facebook desktop only Facebook Lookalike Audiences Exclusion Access to Facebook s Targeting Dynamic Creative Real time bidding 6

7 Placements and Ad Units Facebook offers several ad units for advertisers to capture attention and drive action. News Feed is the most effective placement for advertisers looking to drive direct response objectives because its ad units are in-stream and native to the Facebook experience and across devices. Link ads Drives traffic to your website and store Photo ads Drives traffic to your store Link ads direct people off of Facebook from any device to a specific location on your website that you choose. Link ads offer: A large, clickable real estate in News Feed across devices The ability to add strong call-to-action buttons to drive conversions The ability to showcase multiple products from your inventory within a single link ad unit Creative specs for link ads Recommended text count: 90 characters Recommended image ratio is 1.91:1 Recommended image size is 1200x627px Photo ads are designed to drive brand awareness and engagement from Facebook s News Feed. Photo ads offer: A large real estate for an image in News Feed A compelling canvas for advertisers to capture attention from News Feed Creative specs for photo ads Recommended text count: 90 characters Recommended image ratio is 1.91:1 Recommended image size is 1200x900px 7

8 Mobile app install ads Drives installs for your mobile app Mobile app engagement ads Drives conversion in and retention for your mobile app Mobile app install ads drive people directly from News Feed to the App Store or Google Play to install from a strong call-to-action. Mobile app install ads offer: A large, clickable real estate in mobile News Feed Strong call-to-action buttons Install Now, Play Game, Watch Video, Shop Now, Listen Now, and Book Now The option to use video or image Mobile app engagement ads drive existing app users directly from News Feed into your app with a strong call-to-action button. Mobile app engagement ads offer: A large, clickable real estate in mobile News Feed Strong call-to-action buttons Use App, Play Game, Watch Video, Open Link, Shop Now, Listen Now, and Book Now The ability to direct users to a specific location in app Creative specs for mobile app ads Recommended text count: 90 characters Recommended image ratio is 1.91:1 Recommended image size is 1200x627px Creative specs for mobile app ads Recommended text count: 90 characters Recommended image ratio is 1.91:1 Recommended image size is 1200x627px 8

9 Bid types Facebook offers a variety of bidding options to help you pay the right amount per objective and deliver your ads to the right audience. The 4 bidding options offered are cost per impression (CPM), cost per click (CPC), optimized cost per impression (ocpm) and cost per action (CPA). You value You pay for We optimize for Cost per 1000 impressions (CPM) Use CPM if your objective is to drive impressions of your ad. If you care about clicks or conversions and you re targeting a very specific or highly targeted market, you can also bid CPM to gain greater reach for your ad. Impressions Impressions Impressions Cost per click (CPC) CPC is a good option for advertisers targeting a very specific audience. For example, if you want to target your highest LTV customers, you could use CPC bidding to serve ads to your entire audience rather than those likely to convert. Clicks Clicks Impressions For CPC with link ads, you pay for clicks on links, likes, comments and shares. For CPC with mobile app ads, you pay for clicks to the app store. Optimized CPM (OCPM) ocpm enables you to specify the action that you care most about and set a target bid for that action. Facebook will then optimize delivery and bid aggressively to serve ads to users we believe are most likely to take that action. Conversions Impressions Conversions Cost per action (CPA) Designed for mobile app ads campaigns, CPA biding will efficiently spend your budget by delivering ads to users who are most likely to install your mobile app. With CPA, you have full control over what you spend per action and our system will deliver the results you care about. Installs Installs Installs 9

10 Measurement Measure the performance of your campaigns with Facebook s measurement solutions. We were able to identify the type of consumer who will convert, profile that, and use this to find more people to serve those New Feeds adverts to, Henry Arkell, Social Advertising Director, Manning Gottlieb OMD. Facebook case study, April 2014 Facebook conversion pixel Measures website conversions When driving traffic to your desktop or mobile website, the Facebook conversion pixel will measure how your ads perform and provide the granular data needed to optimize your ads. The Facebook conversion pixel will also enable you to utilize other Facebook solutions that leverage pixel data such as Custom Audiences from your website and ocpm bidding. The Facebook conversion pixel measures: Your cross-device conversions on Facebook Any interaction with your ad, such as clicks on the photo, like button, comment button and share button, as click conversions Conversion activity within a 1-day, 7-day or 28-day window based on time the ad is shown While Facebook provides its own conversion pixel for tracking, you can also implement a third-party pixel for measurement beyond Facebook. Generally, third-party pixels will measure: Granular data outside of Facebook such as LTV, KPIs and multi-touch attribution Click conversions as clicks off of Facebook All other clicks prior to a conversion as a view conversion Data across channels with minimized redundancies Data when the conversion takes place within a predefined attribution window Facebook SDK and App Events Measures mobile app conversions The Facebook SDK or Mobile Measurement Partner s SDK will measure the granular data needed to optimize your mobile app ads to meet specific goals. You will need to measure in-app actions to optimize budgets for actions that matter. You can do this via Facebook App Events or through a Mobile Measurement Partner. The Facebook SDK and App Events enable: The ability to measure any action taken in your mobile app ad such as an install or a purchase Conversion activity within a 1-day, 7-day or 28-day window based on time the ad is shown Rich people-based insights such as who buys the most in your app via App Insights While Facebook provides its own SDK for tracking, you can also implement a third-party measurement solution. Generally, our third party mobile measurement partners measure: Cross ad network ad spend Deeper downstream performance metrics and analysis such as funnel analysis 10

11 Solution by Objective This is our recommended solution set for marketers looking to acquire customers or remarket to existing customers online, in-store and in mobile app. Driving online traffic from Facebook Targeting Ad units Bid types Measurement Acquiring new customers Core Audiences Custom Audiences Link ads in New Feed ocpm CPC Conversion pixel Lookalike Audiences Remarketing to exisiting customers Custom Audiences Link ads in News Feed ocpm CPC Conversion pixel Driving in-store traffic from Facebook Targeting Ad units Bid types Measurement Acquiring new customers Core Audiences/ Partner Categories Custom Audiences from your website Link ads in New Feed Photo ads Offer ads CPM Conversion lift tests Lookalike Audiences Remarketing to exisiting customers Custom Audiences Link ads in News Feed Photo ads ocpm CPC Conversion lift tests Offer ads Driving mobile app installs and conversions from Facebook Targeting Ad units Bid types Measurement Acquiring new mobile app users Core Audiences Custom Audiences Lookalike Audiences Mobile app install ads CPM ocpm Facebook SDK + App Events or third party mobile measurement partner Remarketing to existing mobile app users Custom Audiences Mobile app engagement ads CPC Facebook SDK + App Events or third party mobile measurement partner 11

12 Best Practices 12

13 Campaign Prep Planning your campaign As you plan your campaign on Facebook, you can start by asking yourself a few questions: What are the business goals I m seeking to achieve and how do they map to the objectives I can drive on Facebook? For instance, your business goals could be acquiring new customers or remarketing to existing customers. How will I measure and track results? Before launching your campaign, identify what metrics will be measured so you and your partners can work towards the same goal. The answers to these questions will define your strategy and help you measure the effectiveness of Facebook alongside other direct response channels. Next, follow these steps: Align Facebook with your other efforts on digital From account planning to the KPIs metrics you ll measure, leverage the same processes and best practices for an apples-to-apples comparison between channels. Consider long-term success metrics It s not too early to set long-term goals for your program. Consider metrics such as lifetime value (LTV), downstream value, average order value (AOV) and share of new customers. Leverage your fans Your business will benefit from having more people who like your Page since Facebook ads show social context, which increases the efficacy of your ads. Audience Insights from your Page such as geographic, demographic and interests data can also enhance your ability to target the right people and refine your creative for specific campaigns. Campaign structure Facebook s campaign structure makes it easier for you to organize, optimize and measure the performance of your ads. The structure has three levels: campaign, ad set and ad. Campaign Campaign best practices 1. Set up campaigns based on advertising objectives 2. Create multiple campaigns within an ad account 3. Cap spend across all campaigns and track spend for each campaign Ad set Ad Ad Ad Ad set best practices Ad set 1. Organize ad sets by audience segment 2. Optimize top performing placements 3. Set bidding to maximize performance 4. Adjust budgets to optimize spend Ad Ad best practices 1. Use ad types that match your campaign objective 2. Create multiple ads to optimize performance 3. Improve the performance of your creative 4. Don t go over the limits for number of campaigns, ads sets and ads 13

14 Set up for measurement To measure the success of your program, you will need to set the proper measurement solutions in place. 1. Know which KPIs (ROAS, average order value, conversion rate, etc.) you want to measure and what metrics you consider a success Make sure your partners (agency and/or PMD) are informed of these success metrics. 2. Bring your conversion data onto Facebook To track online conversions, implement the conversion pixel on the your website. To track conversions in your mobile app, implement the Facebook SDK and set up App Events to measure specific actions in app and attribute ad spend to specific in app actions. 3. Identify where the majority of conversions happen Looking at your data, identify where the majority of conversions occur. If you notice that more conversions occur on desktop than mobile, then increase spend on desktop and use the appropriate ad units and creative to drive your desired action. 4. Set up measurement for lifetime value (LTV) It s not too early to set long-term goals for your program. Consider metrics such as lifetime value (LTV), downstream value and share of new customers. 5. Partner with a third-party solution for cross-channel measurement Encourage advertisers to implement third-party measurement solutions to measure the path-to-conversion for their customers and the impact Facebook has compared to other channels. Because Facebook ads can drive consideration from consumers, a last-click attribution model is not an appropriate measurement solution. 14

15 Targeting With the right targeting strategy, you can reach consumers on Facebook in meaningful numbers to drive scalable results across devices. Though Facebook has more targeting options than other channels, the same audience planning process applies. Think about the goal you ve set for your business on Facebook. Are you acquiring new customers or remarketing to existing customers? Your objective will define the audience you want to target. Ask yourself the following questions to help develop your audience strategy on Facebook: Who are your target audiences? How do you segment your audiences? What types of data/insights do you have about them? What are your key focus markets now and in the future? Who manages your CRM database? How do you use your database for marketing purposes today? What offline data do you use for targeting in other campaigns? These questions should help determine what audiences you want to reach on Facebook. Next, use Facebook targeting to find your audience. Recommended targeting solution by objective Core Audience Custom Audiences Lookalike Audience Driving online traffic Acquiring new customers Remarketing to existing customers Driving in stores traffic Acquiring new customers Remarketing to existing customers (Partners Categories) (Custom Audiences from your websites) Driving mobile app installs and conversions Acquiring new mobile app users Remarketing to existing mobile app users 15

16 Success Story 20Jeans used Custom Audiences to remarket to people who abandoned their shopping cart on their website. Result: Saw a 300% decrease in CPA and a 2-3X higher conversion rate than other display platforms Facebook case study, June 2014 Best practices for targeting Use the following best practices to efficiently reach the people in your target audience. 1. Reach audiences based on where they are in the lifecycle Identify audiences by where they are in the lifecycle. For example, remarket to people who demonstrated purchase intent on your website, target existing customers who are likely to churn and reach your highest LTV customers to keep them engaged. 2. Minimize overlapping audiences Overlapping target audiences mean multiple ads are competing for the same auctions, thus cannibalizing the delivery for your campaign. Consider consolidating target audiences into larger but fewer audience segments. Also, evaluate the timing of ad sets as they may not need to run at the same time 3. Use Audience Insights and App Insights to better understand the demographics of your most engaged audiences Advertisers can leverage data from Audience Insights and App Insights to identify audiences that may be interested in purchasing their products and are most engaged. 4. Exclude current customers from acquisition campaigns If you re running a campaign with the goal of acquiring new customers, use Custom Audiences to exclude your existing customers from your campaign. 5. Use specific seed lists to build lookalike audience When building a lookalike audience, start with a seed list that is specific to the objective you re seeking to achieve. For example, build a seed list of people who tend to convert online versus offline and find people who look like them. 16

17 Creative and messaging After you ve identified your goal and target audience, reach them with compelling creative that drives them to your website, store or mobile app. Great creative drives engagement and can sometimes lead to higher delivery and cheaper costs. Take advantage of the visual and native canvas in News Feed to drive your direct response objectives. Best practices for direct response creative 1. Stick to one strong focal point Keep to one focal point within your creative so that it s obvious to your audience what your objective is. For example, if you re a retailer, showcase the product you re looking to sell and provide a clear directive within the ad. 2. Make your ad noticeable Use creative that captures attention and gets people to stop scrolling through their News Feed. 3. Insert brand personality Add your brand personality into your creative. For example, insert your logo or stick to colors from your brand. 4. Create informational reward Make sure the product or service you re promoting is something the audience might be interested in. For example, an events business can promote tickets for a concert to people who have previously purchased concert tickets from their website. 5. Create emotional reward Think of ways to connect with your audience emotionally. Humor is a great emotional trigger. 6. Mirror creative to where your audience is in the sales funnel If your audience is in the consideration phase, use creative to drive interest in your products or services. If your audience has demonstrated intent on your website, use creative with a strong call-to-action to drive the outcome you care about. 7. Use a strong call to action Vital to direct response campaigns, ensure you have a single, clear call-to-action that drives the objective you re looking to achieve on Facebook. Do not confuse the call-to-action by asking them to purchase a product and like your Page. 8. Create consistency across the path-to-conversion When driving a conversion on your website or mobile app, keep the look and feel of the experience seamless from the ad itself all the way to the conversion page. 9. Consider refreshing the creative Campaigns will begin to fatigue over time given the frequency with your target audience. Review performance over time and update creative often to maximize results. 10. Test, test, test! Ensure you re using the best performing creative by testing continuously. 17

18 Bidding Facebook s auction is designed to give you the least expensive delivery possible regardless of your bid. On Facebook, the bid is assumed to be the value (e.g. revenue) captured from each click, impression or action. Pricing We charge you based on: The position you win in the auction The weighted average of your competitors bids Prices are calculated based on the position won in the auction and the weighted average of your competitors bids. This means that the price charged is almost always less than the bid. Figure out what the max bid is by calculating the average profit from a click or action (this varies by target audience, and possibly other factors, and should be adjusted over time). Best practices for bidding 1. Bid your true value Bid the maximum amount you re willing to pay per objective. 2. Increase your bid if you re willing to pay more per objective You will almost always be charged less than your bid. So if you re willing to spend more, increase your bid to maximize delivery. 3. Set accurate end times for your ad sets You might get slower delivery if the system thinks it has to spread your spend out over a long period of time. 4. Set different bids for low and high LTV users Create different LTV audience segments. Bid higher for people that bring more value in the long run, while bidding less for people that have a lower LTV. 5. Don t change bids and budgets too frequently Fluctuations in bids may affect delivery. 6. Don t try for the cheapest clicks or impressions You will reach people that are easier reached, but don t necessarily provide the LTV you expect. In addition, you might not be able to scale your campaign properly. 18

19 Measurement For a complete view of your efforts on Facebook, we recommend a combination of measurement solutions: Track your Facebook ad performance with the Facebook conversion pixel and SDK Measure the incremental lift you receive from advertising on Facebook using conversion lift tests Utilize third-party tracking and measurement to determine attribution across publishers Track Facebook ad performance online and in mobile Properly measuring and optimizing your ad campaigns is a core to success on Facebook. The Facebook conversion pixel or App Events should be placed on each key aspect in the conversion flow. By placing the conversion pixel/app Events across the funnel, you will be able to test several optimization techniques that could lead to additional conversions. In addition, you will be able to measure the downstream effect of our ads in relation to key conversion events. If your goal is... General remarketing Lead generation Mobile app installs Mobile app re-engagement Loyalty You should apply the pixel/app Event to... Main landing pages, search pages, category pages Main landing pages, loyalty/rewards pages, newsletter pages Activate App and App Purchase Activate App, App Purchase, Add to Cart, Initated Checkout Loyalty/rewards pages Retention with lapse customers Loyalty/rewards pages, shopping cart (exclude purchasers via Custom Audiences pixel on checkout/ thank you pages) Upselling Category/product pages Fan acquisition Main landing pages 19

20 Conversion lift test Lift measurement determines the true incremental impact you receive from your advertising efforts by comparing a test group of people who saw the ads to a control group who didn t see ads. While brand advertisers care about determining the lift in awareness and perceptions, direct response advertisers care about driving actions, events and conversions, so we measure the lift in these key actions. Conversion lift measurement is a true experimental design approach which enables advertisers to determine the value of all Facebook impressions (views and clicks) beyond the last touch and determine the incremental impact Facebook advertising had on their business. How to implement a conversion lift test: 1. Before uploading your Custom Audience from a data file to Facebook, randomly divide your audience into two groups This creates a test group and a control group. Only include people you want target for your specific objective. For example, if you re a travel company promoting hotels to people who recently booked airfare, run a conversion lift test to people within that campaign. 2. Upload the two groups as separate Custom Audiences Do not make any changes to the Custom Audiences during the test to maintain accuracy. 3. When running your campaign, only show ads to the test group Make sure to exclude the control group from your campaign. Make sure to reach more than 75% of people in your test cell to get a good read on the impact of your advertising. 4. Analyze your point-of-sale data from both groups When measuring the results of your campaign, look at the data of all people within your test and control group. 5. Calculate the lift between the two groups Compare the delta in conversion rate and sales volume between the test and control group. For more information on conversion lift tests and details on our managed conversion lift test solution, reach out to your Facebook contact. 20

21 Conclusion Whether you are a new or experienced advertiser on Facebook, we hope this guide provided helpful tips to improve the performance of your campaigns. In summary, keep the following recommendations in mind: Use the recommended suite of Facebook ads products that align with your direct response objectives Ensure your campaigns are structured efficiently according to Facebook s best practices Use compelling creative with strong call-to-actions to drive attention and conversion Follow Facebook s bidding best practices to ensure you re paying the right amount per objective. Use the Facebook conversion pixel and/or SDK as well as experimental design tests for a complete view of your ad performance. Test targeting, creative, placement, ad unit and bids often to optimize for better results. For more information about Facebook Advertising, visit facebook.com/business. 21

Direct Response Marketing on Facebook

Direct Response Marketing on Facebook Direct Response Marketing on Facebook Driving action online, in-store and in mobile app Summer 2015 1 Table of contents Facebook s direct response marketing solution 4 Best practices 14 Campaign prep 16

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