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16th March 2012, by Wahida Lakhani

The Evolution of Facebook Advertising, Syncapse Perspective

Content + Ads = Complexity Executive Summary On February 29, 2012, Facebook hosted fMC in New York City, an industry event designed to announce new capabilities across Facebook’s suite of marketing products. Communication centered around new enhancements to Pages, including the introduction of “Timeline”, as well as the evolution of Facebook’s advertising model. Recently, Syncapse provided a perspective on the launch of Timeline for Brand Pages; this week we focus on the changes to Facebook’s ad products, along with opportunities and implications for brand marketers. There are three key ad product takeaways from Facebook’s announcement: 1. Premium on Facebook. The ability to place ads in more places, officially expanding inventory to users’ news feeds on desktop and mobile devices, along with having the option to purchase ads on the log-out screen. 2. Reach Generator. An automated, “always-on” media buy option to help improve the reach of stories published from Facebook Pages, providing more fans with the opportunity to see and engage with brand content. 3. The Marriage Between Content and Paid Media. The need for real-time, seamless management of paid, owned and earned media in the Facebook ecosystem, along with an understanding of how to use analytics to guide content creation, media buying strategies and measure ROI. There is no doubt that this space is quickly becoming incredibly complicated for brands to navigate. Marketers will be pulled in many different directions as a new industry model emerges. Which partners or agencies are in the best position to help their clients succeed? Is there tangible brand value in shifting additional resources and spend to further distribute your brand stories inside the walls of Facebook? Time will tell. Premium on Facebook Highlights Premium on Facebook is an enhanced ad distribution system that provides advertisers with the “most impactful placements on Facebook”: right-hand side of homepage, directly in the news feed on the desktop and mobile homepage, and on the log-out page (available in April 2012). These ads are created from your Page content, more specifically, from six kinds of Page posts: status updates (text), photos, videos, links, questions, and events. For non-fans, this content is distributed through the right-hand side “ad” placement on the homepage. For your fans and their friends, content is delivered as a “sponsored story” on the right-hand side or directly in the news feed itself. A sponsored story adds social context to the message, showing how friends are connected to your brand in an expanded view. Still following? Premium ad placements are bought directly through Facebook and are designed to maximize reach, purchased on a CPM basis. Marketplace ads continue to be offered across “non-premium” ad locations within Facebook’s walls. These are primarily purchased on a CPC basis and are typically direct-response. The Opportunity and Implications Premium on Facebook further moves Page content to the center of Facebook’s ad model, with the goal of creating a more seamless experience between owned, earned and paid content. Facebook touts that premium ad placements result in an average of 5-10x more engagement than other ad inventory locations on the site. It will be important to test and measure if this improvement in performance holds true across your ad buys. Reach Generator Highlights Reach Generator is an “always-on” ad solution that increases the distribution of Page posts among existing fans. It is targeted to brands with larger media budgets, and is designed to improve the reach of Page posts, not to increase the number of Page likes (fans). Distribution occurs through the sponsored stories format. The Opportunity According to comScore research from March 2011, posts published from Pages may only reach 16% of fans each week. Facebook claims that Reach Generator will boost post exposure to an estimated 50% of fans each week, or up to 75% of fans each month. For marketers, Reach Generator provides an automated way to maximize the reach of Facebook Page posts and potentially improve the overall return on time and resources invested in content creation. Implications It is worth noting that the benefits of Reach Generator also come along with some watch-outs. Due to the automated nature of the solution, each Page post is automatically distributed as a sponsored story. Therefore, marketers are signing up to pay for incremental distribution of all Page content. To the best of our knowledge, there is no ability to allocate a greater percentage of spend across posts that are specifically linked to higher priority marketing initiatives. One of the benefits of the pending launch of Facebook’s “Real-time Insights” is the opportunity to analyze Page post metrics and select the best performing content to place in ad copy (in turn maximizing the effectiveness of, what is often, a finite campaign media budget). Reach Generator’s continuous, fixed fee approach, does not allow advertisers to tailor their buys to high-performing content – a key consideration to weigh before committing your budget. The Marriage Between Content and Paid Media: Measuring Success Highlights There is no doubt that the evolution of Facebook’s ad model (and, to a lesser extent, Twitter) will further impact how brands approach social marketing, as well as disrupt the agency and Facebook partnership ecosystem. Will the integration of owned, earned and paid media become an operational reality? Will ad formats with 90-150 characters of text, a thumbnail image and “social context” from friends actually convert to tangible business success? The Opportunity Understanding how Facebook’s advertising model impacts both social and brand health metrics will be critical to improving overall return on social marketing investment. As a result, organizations will need to look at how social data can be integrated into existing analytics dashboards or brand tracking studies. Identifying how paid vs. owned vs. earned exposure contribute to social KPIs, such as fan growth or Page engagements, is the new baseline requirement for optimizing social media activation. Taking it one step further, imagine having access to a unified dashboard that provides you with the means to identify which content themes, placed in which social ad formats, and at what level of media investment, will translate to the most effective social marketing plan – a predictive model to help marketers understand how to leverage paid, owned and earned media hand-in-hand to deliver success. Although it’s not without complexity, Facebook’s new ad strategy, and resulting integration of paid-owned-earned metrics, could help to accelerate and advance the industry as a whole. Implications Organizational Structure. Begin exploring new hybrid models, where media teams work closely with content creators to allocate media budgets to the most impactful Page content. Pre-define minimum performance thresholds across comparative metrics such as “post engagement rate”, in an effort to avoid the mistake of inserting poor performing Page stories in media buys. Or, consider allocating a portion of your media budget to your content team as a test, tasking them to use post-level analytics to help guide Facebook ad formats and buy execution. Helpful tip: ensure that your content team has access to purchase Facebook inventory at your pre-negotiated corporate CPM so that volume discounts are leveraged. In the future, will content creators be the new Facebook media buyers? Or will media buyers become the new social content strategists, selecting the best performing stories to ‘pin’ to the top of a brand’s timeline based on ad metrics? The jury is out. The best bet is to leverage the strongest partnerships across your agency network and experiment with various models to learn what works and what doesn’t. Tailor your approach to meet the specific needs and realities of your organizational structure. Proving the Value. The question remains, will the insertion of paid brand stories into a social networking experience convert to meaningful success (e.g., an increase in desired brand attributes or preference)? Will marketers see value in shifting digital media budgets to promote content to their existing circle of fans? It is important to note that these same fans, or “direct consumer connections,” were previously acquired at a significant investment in the hope that future communication could occur organically, and at scale, without the support of paid media dollars. We expect that more marketers will begin to measure the ROI of integrated social marketing activities, looking to understand relationships between owned, earned and paid media in an effort to improve effectiveness and decrease “non-working” dollars. On the journey to understanding return on social investment, it is recommended to implement a measurement approach that is best suited to your organization’s social media maturity. As a first step, consider selecting a 3rd party partner to collect, standardize and integrate owned, earned and paid media data. Immediate benefits include the ability to benchmark performance across markets, brands or agencies. This data can then be exported for a deeper level analysis, helping to answer questions, such as, “What level of paid investment is required to re-engage lapsed fans, while reversing negative trends in earned media value?” Conclusion As Facebook continues to evolve their suite of marketing products to create a “frictionless” user experience between ads and content, marketers can take two paths – continue executing social strategy as if nothing has changed, or quickly understand the impact of Facebook’s evolution from “ads to stories” and adjust how social content is planned, published, purchased, measured & optimized to capitalize on the shift. Recognizing that Facebook is still only one piece of the total digital media ecosystem, it will be no easy feat to keep up with the changes and find resources to create custom, engaging brand stories that fans will want to share. The challenge for brand marketers and connections teams is that this is a much less scalable proposition when compared to developing creative for IAB standard digital display buys or Google AdWords. To justify investment in time and resources, organizations will need to look closer at the value of the “opinion marketplace” (the Facebook ecosystem), and show ROI in the context of results that matter (conversions, increase in purchase intent, sales, etc.) Over the next few months, there will be a renewed focus on understanding the relationship between paid, owned and earned media. As the social ad model shifts over the coming year and beyond, this space will continue to rapidly evolve (Facebook has recently started to beta test “Open Graph action spec targeting”, a form of behavioral ad targeting based on in-app activity). What won’t change in the immediate future is the reality that Facebook’s advertising business is at the core of their product strategy, with growth in ad revenue integral to their future market value. As a result, Facebook will be keeping a close eye on which of their new products will be most valued by marketers, and most importantly, if brands can manage the organizational complexity that these new opportunities will create. Resources • Facebook Timeline for Brand Pages, Syncapse Perspective: • Premium on Facebook Guide: • Reach Generator Guide: • Facebook Marketing Classroom:

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