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3 Lessons Facebook Can Teach Ad-Tech Industry

The industry’s favorite infographics, the LUMAscapes, depict how complicated the digital landscape is. There are more than 2,000 companies pictured on the infamous slides, but just how soon will the images need some serious editing? Most likely, the many mergers of the last two years signal more consolidation. Plus, there are fewer venture capital dollars to go around.

It might sound obvious, but one of the best ways to cement your place in the digital advertising ecosystem is to facilitate more effective advertising. Facebook knows this well, and it does so by continually making decisions that preserve the user experience. By analyzing some of Facebook’s most enlightened capabilities, ad-tech businesses can glean important lessons that will help them create more effective advertising solutions.

Let the media do the decision-making. Facebook makes it easy to test the same set of ads with different audiences, and to test different ads across the same target group. Its ad performance conclusions are specific to audience segments — it’s not the creative doing the decision-making, which is the case with ad platforms and optimization tools that provide creative performance data without including specifics on who saw the ad and where it was served.

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On Facebook, marketers can make decisions based on an ad’s performance relative to a specific audience. For the rest of the ad-tech world, the message is clear: It’s not about finding the “best creative” — it’s about finding the creative that works in the context of a specific medium and/or target group.

Market to people. Previously, marketers didn’t know who would see their ad and had to design creative accordingly. Facebook allows us to reach a more precise audience and to craft specific messages. Now, it’s simple to segment based on behavior, demographics, and interests, and to design ad sets tailored to each specific group.

Furthermore, you can customize your campaign based on purpose (i.e., driving clicks to your Web site or app downloads) and device, and even update creative based on the time of day. Thanks to these capabilities, and the resulting data, advertisers can speak to people in a more relevant way.

Of course, we need to make generalizations about our audiences, but the granular nature of Facebook’s optimization options allows us to get pretty personal without getting overwhelmed.

Punish irrelevant ads. Facebook continually makes decisions to preserve the user experience. It even penalizes advertisers by charging them more when they don’t update their ads. Facebook forces advertisers to increase their bids if they want to keep serving the same ad to the same user.

Facebook is sending advertisers a clear message: Update your creative, and if you don’t, you will pay for it, literally.

Facebook also invites users to weigh in on the relevancy of the ads they’re seeing. The resulting Relevancy Score helps dictate how often an ad is served.

The Relevancy Score gives consumers more control than they have in most of the digital advertising landscape. They decide what type of ads they want to see more of. That means advertisers have to work harder to ensure their creative is working, but the result is a more effective campaign and less wasted ad spend.

The system is a virtuous cycle that reflects a pillar that has contributed to Facebook’s success: focus on the end user. The rest of our industry would be wise to take note.

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