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 1.44 billion people1 on Facebook, the platform 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, 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 Tip Use the Audience Network Reach your target audience beyond Facebook on other mobile apps with the Audience Network. Facebook has a powerful targeting solution that enables you to target based on the data people share on Facebook, your first-party 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. Target people based on engagement with your 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) Right Column ads Placements All Facebook Facebook desktop only Facebook Lookalike Audiences Exclusion Dynamic Creative Bidding across publishers Self-service through Power Editor Cross-device retargeting 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 Mobile app ads Drive installs, conversions, and engagement for your mobile app 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 The option to use video or image Mobile app install ads drive people directly from Facebook and the Audience Network to the Apple App Store, Google Play, or Amazon App Store to install from a strong call-to-action. Mobile app ads offer: A large, clickable real estate in mobile News Feed Strong call-to-action buttons to drive install and engagement The option to use video or image Creative specs for link ads Creative specs for mobile app ads Text count: 90 characters Video file size: up to 1 GB Text count: 90 characters Video file size: up to 1 GB Image ratio is 1.91:1 Video format:.mov files Image ratio is 1.91:1 Video format:.mov files Image size is 1200x627px Video resolution: at least 720p Image size is 1200x627px Video resolution: at least 720p Video aspect ratio: at least 16:9 Video aspect ratio: at least 16:9 7

8 When comparing carousel link ads to single link ads, advertisers saw: Ads in the carousel format Add more creative real estate in News Feed 30-50% decrease in CPA 20-30% decrease in CPC 1 Carousel link ad on desktop Carousel mobile app install ad Designed for any objective, carousel ads give you more creative real estate to showcase compelling imagery for your brand or products, driving people to your website to convert or your app to install or engage. You can showcase up to 10 clickable images within a single ad unit and Facebook can optimize the order of the images based on relevance to each targeted individual. Ads in the carousel format offer: The ability to showcase up to 10 clickable images within a single ad unit The option to let Facebook optimize the order of images for each person Insights on top performing images Creative specs for ads in the carousel format Image size: 600 x 600 pixels Image ratio: 1:1 Text: 90 characters Headline: 25 characters Link description: 30 characters 1. Facebook internal study across 9k ad sets testing multi-product ads and link ads, January 15, 2015 February 15,

9 Dynamic product ads Power of dynamic product ads: Scale: Promote all of your products with unique creative without having to configure each individual ad Always-on: Set up your campaigns once and continually reach people with the right product at the right time based on actions taken on your website or mobile app Cross-device: Reach people with ads on any device they use, regardless of their original touch-point for your business Automatically promote your entire product catalog on Facebook. How dynamic product ads work Dynamic product ads leverage Custom Audiences to help you create targeted audiences of people who have viewed, added to cart or purchased products on your website or mobile app. By uploading your product catalog to Facebook, you can reach shoppers with dynamically generated product ads showcasing relevant products they may be interested in purchasing. Advertise all of your products Many advertisers are already using Facebook to promote their products. But, customizing creative with the right targeting for each and every product takes time, especially when inventory changes frequently. Dynamic product ads enable you to import your entire product catalog to Facebook so that you can automatically promote any product from your inventory to people who visited your website or mobile app, without having to create thousands of individual ads. Capture sales from people already interested in your products With dynamic product ads, you can keep your business top of mind with people already interested in your products by reaching them on Facebook. Automatically bring your potential customers back to your website or mobile app to purchase publishers. You can use dynamic product ads to leverage Facebook native targeting and multi-product ad formats across devices. Highly relevant: Show people ads for products that they have shown interest in from your product catalog 9

10 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), optimize for conversions 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 Clicks 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. 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 Optimize for conversions 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 10

11 Measurement 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 Measure the performance of your campaigns with Facebook s measurement solutions. Facebook Conversion Pixel Measure website conversions The Facebook conversion pixel helps you measure the effectiveness of your Facebook campaigns. With the conversion pixel, you can measure conversions that happen as a result of your Facebook ads - even if the conversion happens on a different device than where your ad was served. The Facebook Conversion Pixel reports on Facebook clicks and impressions that happen within a 1-day, 7-day, or 28-day window after the ad was shown. The Facebook conversion pixel: Measures the actions of people, not cookies Measures conversions that happen across devices Works with Facebook Lift measurement Lets you generate Lookalike audiences of people who convert Allows optimization for conversions Optimize for success The Facebook conversion pixel also helps marketers to optimize their ads for conversions. With conversion optimization, Facebook leverages real time data beyond just clicks or impressions to show your ad to those customers most likely to convert on your specific ad, purchase or sign up for a subscription. With the Facebook conversion pixel you can: Lower your cost per action by showing your ads to people most likely to convert at the most efficient price Automatically optimize the delivery of your ads to increase the number of conversions Optimize for success across all the devices your customers use 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 Mobile Measurement Partner solution. Generally, our Mobile Measurement Partners provide: Cross mobile ad network measurement Deeper downstream performance metrics and analysis such as funnel analysis 11

12 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. Targeting Ad units Bid types Measurement Acquiring new customers Core Audiences Custom Audiences Lookalike Audiences Link ads in New Feed Optimize for conversions CPC Conversion pixel Remarketing to existing customers Custom Audiences Link ads in News Feed Optimize for conversions 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 Lookalike Audiences Link ads in New Feed Photo ads Offer ads CPM Conversion lift tests Remarketing to existing customers Custom Audiences Link ads in News Feed Optimize for conversions CPC Conversion pixel 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 Optimize for conversions CPA CPC Facebook SDK + App Events or third party mobile measurement partner Remarketing to existing mobile app users Custom Audiences Mobile app engagement ads CPC CPM Facebook SDK + App Events or third party mobile measurement partner 12

13 Best Practices 13

14 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 marketing efforts 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 Campaign 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 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 best practices 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 best practices 1. Use ad types that match your campaign objective 2. Create multiple ads to optimize performance 3. Don t go over the limits for number of campaigns, ads sets and ads Ad set Ad set Ad Ad Ad Ad 14

15 Set up for measurement To measure the success of your program, you will need to set the proper measurement solutions in place. 1. Determine your objective for each campaign and define a metric for success Every successful campaign begins with a clear objective in mind. Make sure your marketing team and your partners (agency and/or your Facebook Marketing Partner) are aligned on which metrics you will use to determine success. Common metrics include conversion rate, return on ad spend (ROAS), life time value (LTV), and conversion Lift. 2. Install Facebook conversion pixel on your website and App Events in your app Since many conversions happen on a different device or platform than an ad was displayed it is important to install conversion tools on each touchpoint for your business. To track conversions that happen on your website and mobile website, implement the conversion pixel. To track conversions that happen in your mobile app, implement the Facebook SDK and set up App Events. If you are tracking purchases, add a conversion value to your pixel and app events to understand the total value of purchases attributed to your Facebook ads. 3. Track your ads with the conversion pixel and app events Make sure that each ad you run is configured to track your conversion pixel and, if you have an app, your app events. 4. Look at your cross-device reports After your campaign has finished, view your ad reports in Facebook Ads Manager. Find which campaigns and ads drove the most conversions and allocate your budgets accordingly. Next, compare the Placement Device with the Conversion device to understand how your customers are interacting with your ads and then converting across different devices. Cross device reporting provides vital insights into consumer shopping behavior that can help you optimize your mobile ads. 5. 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 versus returning customers. 6. Partner with a third-party measurement provider to consider alternate attribution models Most marketers today rely on attribution models that give full credit to the last ad clicked on that browser, without considering the cross device behavior of their customers. Facebook conversion reporting measures real people, not cookies, so you can always attribute the success of your ads to people no matter which device they last saw your ad. In addition to Facebook conversion tracking, consider partnering with a measurement provider that can help you explore other attribution models beyond last click. 15

16 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 Audience Lookalike Audience Driving online traffic Acquiring new customers X X X Remarketing to existing customers X Driving in store traffic Acquiring new customers X (Partners Categories) X Remarketing to existing customers X Driving mobile app installs and conversions Acquiring new mobile app users X X X Remarketing to existing mobile app users X X 16

17 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. 17

18 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. 18

19 Bidding Pricing We charge you based on: The position you win in the auction The weighted average of your competitors bids 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. 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 Bid your true value Bid the maximum amount you re willing to pay per objective. 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. 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. Identify high LTV users Find users with high life time value and adjust your bids for those segments that will deliver the greatest return for your business. Don t change bids and budgets too frequently Fluctuations in bids may affect delivery. 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. 19

20 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 Mobile Measurement Partners to determine effectiveness of ads for apps 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... You should apply the pixel.app Event to... Lead generation Main landing pages, loyalty/rewards pages, newsletter pages Mobile app installs Activate App and App Purchase Mobile app re-engagement Activate App, App Purchase, Add to Cart, Initiated Checkout Loyalty 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 Drive people to purchase Conversion pixel on purchase page 20

21 Facebook Conversion Lift Measure additional business driven by Facebook in a cross-channel world Facebook lift measurement determines the true impact Facebook has on real people for any business objective from brand awareness to sales. Using Conversion Lift, advertisers can determine the additional business driven online or offline from people reached by Facebook ads across devices. The power of Facebook lift measurement: Cross platform: Tie cross device ad exposure to cross-channel conversions Accurate: Measure real business outcomes, not proxies Actionable: Make better marketing decisions based on driving additional business From results to action Conversion Lift provides cross-platform, accurate and actionable data that helps advertisers make more informed marketing decisions. With Conversion Lift, you can: Prove ROAS: Determine whether your campaign was successful at driving your desired outcome Understand which channels drive impact: Re-assess your current cross-channel attribution models to more accurately value Facebook Make more informed budgeting decisions: Allocate budget to advertising channels that drive additional impact Optimize campaigns on Facebook: Optimize campaigns post results to improve performance Conversion Lift in 5 easy steps Identify your business objective and campaign to measure Facebook randomizes and splits audience into test and control groups Run campaign to your target audience ads will be delivered to the test group and will not be delivered to the control group Pass your conversion data to Facebook via a Facebook pixel(s) or secure upload Facebook calculates lift by comparing conversions in the test group to conversions in the control group 21

22 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. 22

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 2014 1 Table of contents Facebook s direct response marketing solution 4 Best practices 14 Campaign prep 16

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