It's increasingly clear that new school ad broker Facebook has pegged its sales strategy to a decidedly old school way of looking at media – that is, digital reach and frequency planning embodied by Nielsen's Online Campaign Ratings product.
Speaking at the IAB's MIXX conference today, Facebook head of measurement and insights Brad Smallwood preached the gospel of online reach and frequency. He used in-house campaign data to make the case that closely managing these two bastions of broadcast media planning -- in a digital and, yes, social setting -- leads to better ad ROI and ultimately brand/sales lift (or whatever KPI you prefer).
Among Smallwood's key points:
-Campaigns that effectively managed reach had on average 70% greater ROI, he said. What "effectively managed" means isn't clear, but presumably it refers to efforts by large advertisers to manage ad exposure on a market-by-market basis, as well as nationally.
-Fully 70% of campaigns leveraging Facebook's new Datalogix partnership saw 3x or greater return on ad spend (ROAS), and nearly half saw 5x or greater ROAS. Through the Datalogix tie-in, advertisers can match point of sale conversions to Facebook ad impressions that may have happened earlier. (More) This is not exactly a reach/frequency play, but it's in the same ballpark since using Datalogix to track conversions implies a broad-based consumer marketing campaign of the sort that would use R&F.
-Smallwood said 99% of sales that come from marketing campaigns come from people who don't interact with ads. (He didn't provide a source on this, though it's plausible in light of today's miniscule average click and interaction rates.) "Brands should be optimizing to that 99%."
Nestle Facebook Learnings
Smallwood was joined by Tom Buday, Nestle's global head of marketing and consumer communication. Buday outlined Nestle's Facebook approach through the example of its portfolio brand Skinny Cow. Buday said the brand is successful on Facebook because of its perceived authenticity leading to significant "owned" media impressions. Those impressions, in the form of Page Posts, make it to the news feed at a significantly higher rate than the 16 percent or so average that Facebook says most brands on the site can expect, Buday said.
Despite that high penetration rate, or perhaps because of it, Buday argues advertising on the platform is essential. Using Facebook advertising, and not merely organic distribution, he says, "We were able to triple the reach of an already successful post… We do see value in Facebook advertising."
As for measuring offline impact, Buday believes Datalogix is an important step in that direction, but offered little reason to believe Nestle is closely managing frequency on the platform. He summed up Nestle's Facebook philosophy this way: "Reach is really important, clicks less so… Message quality is the most important thing. For frequency, manage things as you see fit."
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