Resolution Media, Kenshoo Give Facebook A New Success Metric

by Laurie Sullivan, Jun 21, 2012, 4:07 PM

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Search marketers have rushed into social marketing, applying search metrics to measure success, but executives at Omnicom Media's Resolution Media and Kenshoo believe that doesn't work. Social behaves differently than search marketing, and the industry simply needs a new set of metrics, best practices, and guidelines. The companies explain this in a report released this week called "Social Media Insights: Part 1."

Research teams from the two companies, both heavily entrenched in search engine and digital marketing, introduced a new Facebook metric this week called "exposure rate," measured by the percentage of the target audience that actually sees the targeted advertisement. Most marketers measure the size of the audience and the reach. The target audience is based on data that Facebook provides for average monthly users. The study also determines that the length of time an ad runs live will influence its exposure rate, so those that run for only a few days won't reach 100% exposure.

Identifying the impact of pre-engagement and post-engagement metrics on campaign success, Resolution and Kenshoo examined how exposure rate and frequency affect click-through rates (CTRs) and conversion rates. The ads were grouped by exposure rate into four quartiles that helped to determine success.

For example, Quartile 4 -- which has an exposure rate between 76% and 100% -- also has the highest CTRs, suggesting that a higher exposure rate translates into higher post-engagement metrics. Most of the campaign conversions tracked in the research were likes, shares and other social engagement signals, as opposed to off-Facebook sales -- suggesting that this is the reason that overall conversion rates are higher than typical display or search ad campaigns.

The research -- the first in an ongoing series -- focuses on the relationship between paid, earned and owned media using Facebook Marketplace Ads. The analysis examines ad types and targeting criteria using a statistical model and multiple data points from across Resolution Media clients that advertise on Facebook using Kenshoo Social technology.

Aside from defining a new metric to measure engagement, the report examines how each ad type performs with benchmarks and insights, and at what point the ad views begin to diminish returns.

Interestingly, researchers saw a big dropoff in conversion rates between a frequency of 4-6 and 7-9. The data identifies a dropoff of 32% when ads are shown more than six times. Kenshoo CMO Aaron Goldman said the conversion rate "falls off a cliff," calling it "ad exhaustion." Each person who views the ad is exposed to the same message too many times and eventually tunes it out. Test and learn, he said, because the optimal frequency will vary per ad, per brand, and per campaign.

The study focuses solely on Facebook ads, but the falling-off-the-cliff sentiment could apply to paid-search ads as well, so marketers need to continually optimize and test. 

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