Facebook in June announced plans to launch a real-time bidded (RTB) ad marketplace allowing advertisers to reach users on the social network based on their browsing history. Through the Facebook Exchange (FBX), users visiting third-party sites can be shown ads related to their travels around the Web when they go back on Facebook. In short, it's a way for the company to expand advertising beyond its own walls via retargeting. They won't have to rely simply on interests listed in a user's Facebook profile and the pages they “Like” on the social network to target ads. So Expedia, say, could drop a cookie on the browser of a visitor who researches a trip to Iceland but doesn't actually book travel. Expedia could then bid through a participating DSP (demand-side platform) to show that user an ad for a travel package to Iceland. Such an ad would presumably be more relevant than a more generic travel ad, leading ultimately to higher return on investment. And higher ROI is what the Exchange is delivering, according to one Facebook ad partner, based on beta testing so far. Retargeting platform AdRoll says that after running 60 campaigns for clients including Room & Board, HootSuite and GoPro since June, ads sold through the Exchange have resulted in 16 times higher ROI on average than the standard Marketplace ads that run on the right side of Facebook pages. AdRoll declined to provide further details, like eCPMs, click-through rates, cost-per-click in connection with campaigns run through FBX. The company was among the initial group of DSPs selected to trial the system along with AppNexus, DataXu, TellApart, MediaMath, TheTradeDesk, Triggit and Turn. AdRoll on Thursday announced it will begin opening up access to Facebook inventory to all customers after gearing up its RTB infrastructure to begin serving campaigns more widely. “We've invested quite heavily in our RTB technology, which allows for precise bidding decisions based on users' anonymous browsing behavior,” said an AdRoll spokesperson. Rocket Fuel and Nanigans are among other social media ad platforms announcing their support for FBX. Others added to the original group of Exchange parters include Criteo, Optimal, Xaxis and X+1, according to TechCrunch. With FBX, we’re excited to help all of our customers improve the reach and performance of their campaigns through Facebook’s massive inventory supply,” said Adam Berke, president of AdRoll, in a statement. Facebook accounted for about 28% of all display ads served online last year, according to comScore. In a research report earlier this month, JP Morgan analyst Doug Anmuth estimated that site retargeting generally carries a CPM of $2 compared to Facebook's U.S. CPM of about 45 cents. He estimated a 2%-3% gain in Facebook's U.S. ad revenue for each 1% of its impressions that are sold through FBX. In addition to Facebook's top line, the Exchange is expected to benefit direct response marketers especially by opening the door to ads more focused on demand fulfillment than raising brand awareness. But more information about results and costs from early campaigns may be needed to help convince advertisers to get on board en masse when the Exchange gets beyond the test phase.
Facebook in June announced plans to launch a real-time bidded (RTB) ad marketplace allowing advertisers to reach users on the social network based on their browsing history. Through the Facebook Exchange (FBX), users visiting third-party sites can be shown ads related to their travels around the Web when they go back on Facebook. In short, it's a way for the company to expand advertising beyond its own walls via retargeting. They won't have to rely simply on interests listed in a user's Facebook profile and the pages they “Like” on the social network to target ads. So Expedia, say, could drop a cookie on the browser of a visitor who researches a trip to Iceland but doesn't actually book travel. Expedia could then bid through a participating DSP (demand-side platform) to show that user an ad for a travel package to Iceland. Such an ad would presumably be more relevant than a more generic travel ad, leading ultimately to higher return on investment. And higher ROI is what the Exchange is delivering, according to one Facebook ad partner, based on beta testing so far. Retargeting platform AdRoll says that after running 60 campaigns for clients including Room & Board, HootSuite and GoPro since June, ads sold through the Exchange have resulted in 16 times higher ROI on average than the standard Marketplace ads that run on the right side of Facebook pages. AdRoll declined to provide further details, like eCPMs, click-through rates, cost-per-click in connection with campaigns run through FBX. The company was among the initial group of DSPs selected to trial the system along with AppNexus, DataXu, TellApart, MediaMath, TheTradeDesk, Triggit and Turn. AdRoll on Thursday announced it will begin opening up access to Facebook inventory to all customers after gearing up its RTB infrastructure to begin serving campaigns more widely. “We've invested quite heavily in our RTB technology, which allows for precise bidding decisions based on users' anonymous browsing behavior,” said an AdRoll spokesperson. Rocket Fuel and Nanigans are among other social media ad platforms announcing their support for FBX. Others added to the original group of Exchange parters include Criteo, Optimal, Xaxis and X+1, according to TechCrunch. With FBX, we’re excited to help all of our customers improve the reach and performance of their campaigns through Facebook’s massive inventory supply,” said Adam Berke, president of AdRoll, in a statement. Facebook accounted for about 28% of all display ads served online last year, according to comScore. In a research report earlier this month, JP Morgan analyst Doug Anmuth estimated that site retargeting generally carries a CPM of $2 compared to Facebook's U.S. CPM of about 45 cents. He estimated a 2%-3% gain in Facebook's U.S. ad revenue for each 1% of its impressions that are sold through FBX. In addition to Facebook's top line, the Exchange is expected to benefit direct response marketers especially by opening the door to ads more focused on demand fulfillment than raising brand awareness. But more information about results and costs from early campaigns may be needed to help convince advertisers to get on board en masse when the Exchange gets beyond the test phase.
Here’s my takeaway from TechCrunch’s Disrupt conference this week: Mark Zuckerberg needs to get out more. If you haven’t watched the Facebook founder’s half-hour sitdown the other day with Michael Arrington, the TechCrunch swami, then you should. What you’ll also see is a company, and a CEO, pressing on in some promising ways, and making the case for why Facebook is, as they say, is a very serious play-ah, despite everything you’ve read over the last few months. But, of course, as Zuckerberg has been relatively silent since May -- with the exception of the usual stilted performance on the earnings call -- this fact has been obscured. The haters have been doing the talking. Here, then, five reasons why Mark Zuckerberg needs to get out more:
SEMPO has just released its 2012 marketer survey (disclosure -- I am vice president of SEMPO), and there are many interesting findings among categories of spending, practice, and other key industry data. Just as in last year’s survey, there is another point about search and social synergy that sticks out to me, but this time it is not about paid media. It is about how agencies and in-house marketers differ in their approaches to interdependent search and social marketing. The report states that 60% of companies treat “social media and search marketing separately,” as compared to agencies, where 58% state that “social media is very much a part of our search activity.” Marc Engelsman, SEMPO Research Committee Lead for the previous two State of Search Surveys, had this to say about the findings: “There is a disconnect between companies and agencies on their respective understanding on the impact of social on search. Agencies have embraced the key ingredient of social in their search efforts, but companies seem to be behind.” He continued, “Companies are actively keeping search and social separated, and it is the exact opposite of what agencies are doing. To me, that’s a huge disconnect. The question is ‘why?’” That’s certainly a key question to consider, but only agencies and companies may be starting to determine the answer. If your company or agency has pondered this question at any length, I would be interested in reading your comments below. Here are some additional key findings from the report: - 87% of those surveyed say that the Google updates of the last 12-18 months are “significant or highly significant.” - Rising interest in mobile is still a key concern for marketers, with 88% describing it as “significant or highly significant” -- up from 79% in 2011. – “Data jockeys” are becoming difficult to find, and even harder to keep due to “new money” that is flowing into the interactive marketing space. Hiring and retaining talent was also cited as an important issue. - Many companies that experimented with Facebook PPC in 2010-2011 seem to have stopped. There is a sharp drop in those who run paid campaigns on the social giant, down from 74% to 56%. Small and medium-sized businesses lead the pack of marketers who have left the Facebook spending fold. - 86% of respondents predict growth in their interactive spending budgets, up from 77% in 2011 -- and 37% call this growth “significant.” A mere 4% expect to reduce their interactive spending. - 55% of respondents predict a rise in SEO spending. - Google PPC remained a strong and improving player in terms of campaign performance. 64% of companies and 77% of agency respondents noted an increase in Google ad spend, compared to 51% and 38% respectively for BingHoo. - Only 3% of respondents said they were cutting social marketing budgets, and 43% reported keeping social budgets “about the same,” which is an increase from 32% in 2011. - 56% of respondents said they are using Google+ for social outreach.
The smart aleck answer is, of course, “yes.” But let’s dig further. That loyalty drives referrals is easy enough to recognize. We can see how (some) loyal customers become advocates for a product or brand, and choose to refer others. A lot of loyalty research and practice focuses on this causal link. One – the Net Promoter Score – proposes a single question as its simple loyalty measure: How likely is it that you would recommend our company to a friend or colleague? This approach to loyalty is blessed with supporters, as well as critics. The second part of the question is more provocative and interesting, especially in a socially connected world. Can referrals drive loyalty? Can we make them social? We will use this well-constructed definition of loyalty (per Bob Hayes of Business Over Broadway) below to build our case. 1. Retention Loyalty: Will a customer stay with you? (impacts overall customer growth) 2. Advocacy Loyalty: Will a customer refer others? (impacts new customer growth) 3. Purchasing Loyalty: Will a customer buy more? (impacts average revenue per customer) Now let’s see how referrals might drive each form of loyalty. #2 is the most obvious. A referral is a form of advocacy to others, so referrals are synonymous with advocacy loyalty (and drive new customer growth). Let’s look at #1. Can referrals drive retention? The very act of a referral binds a consumer more tightly with the product or brand. For this reason alone, the consumer is more likely to stay with the brand than make a switch on a future purchase, ceteris paribus. But there’s a bigger reason: A shift in allegiance would make the consumer appear hypocritical or two-faced, even if just to one self. Since human behavior tends to abhor duplicity, one might make the case that a referring consumer is more likely to stay with a brand, post referral. Consider #3. Do acts of referrals make consumers buy more (quantity) of what they refer? I think you will agree that it would be hard to argue otherwise. At the minimum, you might agree that referrers continue to buy at the same level; perhaps some buy more. So, the outcome that referrers (in aggregate) buy more goods (post referrals) is more likely than either of the other two outcomes. Now let’s change a few things. 1. What if the brand provided a proper motivation for a referral – perhaps tying referrals to promotions they would otherwise give away (for example, you get a coupon and the ability to pass it on for referring others to a brand video); or tying them to corporate social responsibility efforts (for example, you refer our program supporting cancer research)? 2. What if brands entered their frequent referrers into a “loyalty” program that conferred special privileges? Both these strategies would serve as catalysts to develop each form of loyalty. We make the case that businesses should proactively generate referrals to drive loyalty, rather than passively accept them as outcomes.In a socially connected world where each consumer is connected to hundreds others, the reach of referrals is unprecedented and its timing immediate. Neither was true even a few years ago. And here’s the icing on the cake. Consumers today overwhelmingly make purchase decisions based on the advice of people they know. So referrals are solicited, rather than tolerated. Programs driving social referrals will transform the practice of consumer loyalty. They allow consumers to build “social credit” with their friends. As argued here, they will also enable businesses drive all forms of customer growth.