Home Analytics Merkle: $14 Facebook News Feed CPMs Offer Better ROI Than Marketplace Ads

Merkle: $14 Facebook News Feed CPMs Offer Better ROI Than Marketplace Ads

SHARE:

facebook-targetingRecounting an anecdote in his opening keynote yesterday at Merkle’s customer summit, Merkle CEO David Williams illustrated what a “game-changer” Facebook’s Custom Audience product has been for Customer Relationship Marketing (CRM) companies like his.

Williams said that Facebook executives initially told him it would not only never let email addresses match to Facebook login data – it wouldn’t even allow a test to take place.

Times changed and last year, 14 months after the initial meeting according to Williams, along came Facebook’s “Custom Audience” product, which provides marketers a matching capability for online and offline databases that is currently unique among all publishers in terms of its scale and reach (back in the 00’s, Aol and Yahoo trail-blazed this type of matching).

For Merkle, which has been deeply entrenched in the direct mail/offline world, Custom Audiences, along with the launch of FBX ,appears to have been a critical milestone in the development of its own digital strategy.

In a standing-room-only breakout panel today, Merkle’s Digital Media VP/GM Megan Pagliuca and Facebook Product Marketing Director for Data & Targeting Bryan Schroeder took a deep dive for the marketer audience into “Facebook Techniques for Direct-Targeting,” showing off some recent direct response marketing results.

Merkle’s Pagliuca reiterated the huge amount of change and product development that has happened at Facebook in the past year as it relates to her world. She prefaced with a marketer’s quote: “This is the first new channel I’ve seen since paid search that’s worked this well.”

Facebook’s Schroeder took note of the mobile shift for his firm, saying users spend 14 hours a month on Facebook today. This is an important differentiator, because Facebook can continue to target in mobile using identifiable IDs – first-party data that goes beyond cookie challenges and creates the link for CRM databases looking to address audience across devices.

This begs the question: How much longer until Google introduces its own Custom Audience product and ID targeting instead of cookies? Only privacy challenges – and probably the anti-trust buzz (big hurdles!) – seem to be in the way of Google’s ubiquitous, universal login.  Facebook may force Google’s hand into potentially treacherous waters.

A few of the highlights from the presentation – see the PowerPoint at the bottom of the post:

  • Merkle clearly sees the connection between what Google and Facebook offer – unique, scalable addressability in digital.
  • Facebook Exchange provided significant incremental – i.e. unduplicated – reach for a client campaign that showed only 5% overlap between FBX and other real-time bidding display ad sources.
  • In spite of the cost of the News Feed ($14 CPMs), on an ROI basis, Facebook’s News Feed outperformed its right-rail marketplace ads (75 cent CPMs), reducing CPAs by 63%.

Schroeder re-emphasized that News Feed targeting is powerful and affects offline sales, according to past studies through Datalogix.

By the way, somebody do the math on $14 News Feed CPMs at scale. The revenue opportunity here for Facebook seems huge. But there remains a big challenge around providing the optimal user experience, which factors into the reach and frequency marketers love.

For marketing geeks, the most compelling of the slides may be the comparison between the direct mail and the online world for CRM. There are still a lot of tools for both – CRM marketing isn’t easy, apparently. Merkle sees Salesforce and ExactTarget as a significant new player.

It will be interesting to see if Merkle CEO David Williams can flip this unique view on Facebook and CRM, such that CRM marketing gets bumped up to the CMO level. Regardless, other agency CEOs should be taking note. This is D.R.-focused now, but brand and brand awareness understanding seems inevitable down the road.

Towards the end of the panel, display ad manager Elizabeth Seniff from Travelers spoke about her company’s Facebook Exchange-only experience (so no Custom Audience stuff yet) and said that “the incrementaility we saw was huge” and “there was a huge incremental lift.” She reiterated that Facebook inventory is cheap.

Tagged in:

Must Read

Apple Has Far-Reaching Plans To Block Hundreds Of Programmatic Data Companies From iOS

Apple’s WebKit crackdown appears to extend well beyond The Trade Desk, putting hundreds of ad tech, data and identity vendors on a mysterious, dynamically updated block list.

Josh Reed, Zoom's VP of brand and content, speaking at AdExchanger's Programmatic IO event in New York City (September 28, 2006)

Zoom’s Marketing Challenge Is That It’s Too Well Known For Its Own Good

Zoom has 99% unaided brand awareness, which sounds great on paper. But there’s a catch: Most people still think it’s just a video-call app.

Why Agencies Think They Shouldn’t Own Agentic AI Tools Or The Data Used To Build Them

Agencies are differentiating their tech stacks by building custom agentic AI tools for their clients. And they’re rethinking owning those AI tools – particularly since licensing them creates new revenue streams.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Programmatic IO: Insurers Are Building Ad Tech’s AI Accountability Layer

Agencies and marketers discussed the future of AI governance at AdExchanger’s Programmatic IO NYC this week. The main takeaway? Expect insurers to play an increasingly important role in managing AI compliance.

Apple’s Latest Operating System Blocks The Trade Desk From Serving Ads On Safari

The Trade Desk is unable to serve ads to the Safari browser for Apple device owners that have downloaded iOS 27. Apple has been investigating the issue since last week.

Who Will Stand Up For The Open Web?

The open web is done, stick a fork in it. Banner blindness is near universal, search traffic has run dry and publishers are struggling for oxygen. But what if that’s … not true?