Marketers: Stop Griping About Facebook And Embrace Segmentation

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"Social Exchange" is a column focused on the evolving roles of social media in online advertising.

Ed Kats is president of MediaWhiz, a performance marketing and integrated digital media agency. MediaWhiz is part of the Hyper Marketing Inc. network. 

Some marketers love to bash Facebook ads. We saw it in the immediate aftermath of General Motors pulling its $10 million cache of ad buys just days before Facebook’s IPO. We continue to see it as the company’s stock price stumbles.

The truth is, Facebook is finally developing new, exciting ways to deliver real value to online advertisers. It’s time for marketers to recognize that value and get serious about Facebook ads.

In recent weeks, the company has announced a number of prominent changes to its ad platform, including a real-time bidding exchange, mobile-only ads, and a rumored "want" button that would "only work with content identified as relating to a purchasable product."

Facebook also has increased its outreach to the advertising industry. Through various public and private campaigns, it is working to educate marketers about its multitude of ad options and addressing their concerns about the need for more precise data and analytics. At the Cannes Lions festival last month, Carolyn Everson, Facebook’s vice president of global marketing solutions, made the rounds touting the social network’s various ad options.

The key to the success of all of Facebook’s new ad options is segmentation. Segmentation gives marketers the ability to analyze and make real-time media buying decisions based on data available through Facebook’s interface. For agencies, segmentation marks another opportunity to optimize, target deeper and increase conversion rates. The segmentation and retargeting opportunities now exist that will enable Facebook ads to be profitable for brands.

Mobile: Facebook has given agencies some ability to target consumers at the point where they are increasingly spending their time — mobile. As AdExchanger reported in June, Facebook is rolling out an option that allows marketers to “serve ads only to [users’] news feed — or even only to the mobile news feed.”

It makes complete sense for Facebook to break out and segment its ad options by mobile and desktop. This will allow Facebook — and the brands that want to market on the social network — to monetize its mobile ad campaigns far more effectively than many other Web- and app-based platforms allow.

Third-party Apps: Facebook is beginning to generate revenue from the third-party apps that helped propel its explosive growth. In June, it announced that it has begun placing ads on Zynga’s website. That move, seen by some as a no-brainer given their longstanding partnership, prompted some analysts to predict Facebook will soon launch its own ad network. A Facebook ad network would have the effect of extending the company’s ad reach and improving inline and out-of-network segmentation and optimization.

Logout Ads: Undervalued by some marketers because only a small percentage of Facebook users log out daily, this relatively new ad option offers marketers a prime segmentation opportunity. Its value is tempered, however, by a steep $700,000 per day asking price. And like all Facebook ads, better data and the ability to target based on users’ experience would make this offering more appealing.

Facebook Exchange: Opening Facebook's network to using data and retargeting will help both advertisers and consumers. It will empower marketers to deliver more relevant ads through the use of previously learned information and social data.

Facebook advertising is highly targeted on demographics, geography and consumer interests. Its nascent ad exchange adds retargeting capabilities on a product level. It also ties in consumers’ product interest outside of the Facebook environment, allowing for deeper and more relevant retargeting. This increases the knowledge and effectiveness of marketers’ retargeting campaigns.

With all these options now available, what is still missing?

First, Facebook must continue to evolve in terms of how agencies can access its ad inventory.

Any rational analysis of its display advertising offerings shows that its conversion rates are subpar compared with other digital networks.

Second, it needs to expand its inline ad offerings across multiple third-party apps. If we are to believe the experts at Apple, the app-based Web is the future of the Internet. Facebook and other social networks need to provide brands with opportunities to advertise across every app-based touchpoint where consumers interact with a social network. Twitter’s success with its inline ads across Tweetdeck, HootSuite and others offers a good example.

Finally, it will be interesting to see how Facebook develops scalability in terms of media spend across its ad exchange. Marketers want to know how they can efficiently analyze the present targeted demographics into other age groups and gender. These options currently are not available. An additional ad segmentation consideration is the mirroring of users’ behavior within Facebook and what that may portend for their product and brand interest outside of the Facebook environment.

There will never be the perfect ad platform. Facebook’s recent moves, however, indicate the company is beginning to place advertisers’ interests in line with those of its users.

It’s time for our industry’s complaining about Facebook ads to stop. We can and should do everything we can to help Facebook understand our value to its users and its value to our brands.

The platform is evolving and is no longer the problem. It’s marketers’ understanding of Facebook’s place in the sales funnel and CRM ecosystem that needs correction.

Follow MediaWhiz (@mediawhizllc) and AdExchanger (@adexchanger) on Twitter.

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