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21st September 2012
In The News: Calculate Your 2013 Facebook Ad Spend With This Free Tool
This article originally appeared on Mashable.com
Aiming to take some of the mystery out of calculating ad spending on Facebook, social media marketing firm Syncapse has introduced a free online tool that lets brand managers do the math.
The tool, which went live Thursday morning, takes into account multiple variables that would affect such spending, including target market, market conditions and interests.
In a hypothetical example with a very broad target, Syncapse’s calculator recommended that Kraft Foods’ Oreo brand spend $27.6 million communicating with existing fans next year and $103 million going after friends of fans. Here’s how it got to that number:
First, the calculator asks for the size of your target market. You can also specify interests. Facebook has a database of 8 million or so such interests, which can range from celebrities (Martha Stewart) to sports (mountain biking) to TV shows (The Walking Dead.) In this case, no interest was specified:
Next up, market conditions. The “customer/fan percentage” asks you to figure out how many of your fans actually buy your product. Michael Scissons, president and CEO of Syncapse, says that most brand managers should have a good idea of this figure as well as the other variables.
Finally, there’s “Always On Variables,” which ask you how often you want to hit target consumers with messaging. The CPM figure refers to the cost to reach 1,000 target consumers. Again, brand managers should have a rough idea of this number. In this example, we left the default number, $3.
Finally “Campaign” variables, which ask you how many campaigns you’re planning in the coming year, how long they’ll last and the average length of the campaigns.
In this very speculative example, Syncapse offered the following recommendations:
Scissons acknowledges that the online tool provides a ballpark estimate of spending and that various factors, including Facebook’s steady stream of new advertising products, can’t be anticipated. However, Scissons says his firm created the tool to illustrate that Facebook is more a platform for CRM than traditional marketing. “There are a lot of agencies on the market that are trying to buy cheap fans,” Scissons says. “We’re trying to educate the market that they should be thinking of reach and frequency.”
In the near future, Scissons believes, marketers will begin to think of “frequency” as the new advertising and will bank more on exposure via social media than would-be viral campaigns as a driver of purchases. For example, a woman who is interested in Coach handbags may be a Facebook fan, but she may not be interested in “engaging” with the brand on Facebook very much. However, if she’s exposed to the right amount of messaging at the right frequency, eventually the brand will reach her when she’s in the market for a handbag.
If Scissons is right and marketers begin thinking about social media marketing as CRM, we’ll see fewer out-of-the-box creative campaigns, but marketers may be happier overall with the results.
Try out the new 2013 Syncapse Facebook Ad Spend Calculator for free and let us know your feedback here.
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