Can Audience Insights Boost the ROI of Social Media Ads?

  |  September 6, 2011   |  Comments

Savvy marketers can use data and insights from Facebook campaigns to optimize media plans on the "open web."

Historically, marketers have adopted a boomerang strategy when forced to deal with a new media channel. Step one: spin up a division to deal with the new channel. Step two: mainstream the division when everyone starts to realize that the new channel is just an extension of the consumer's life. Remember Young & Rubicam's Y&R 2.1 or Ogilvy's Ogilvy Interactive? Didn't think so. They were early agency responses to this new thing called the Internet. How about the early agency efforts at mobile marketing, Omnicom's IPSH, Publicis' Phonevalley, or IPG's Ansible? Sensing a pattern here?

History appears to be repeating itself with social media and its poster child, Facebook. Facebook media shops are springing up like zits on the face of a Facebook-addled teen. With more than 750 million users around the world, Facebook offers marketers an immense and granular audience. According to recent comScore data, Facebook accounted for 346 billion ad impressions in Q1 2011, putting it at the top of all online display ad publishers with 31.2 percent share of all impressions served in the U.S. But does Facebook even belong in the category of "display ad publishers"? Many observe that Facebook has built a "closed" web - its treasure trove of user demographic and psychographic information in a walled-off garden - where advertisers can sow seeds but grow their business largely in Facebook's garden.

This doesn't have to be a bad thing - 30 percent of Internet users are on Facebook, and advertisers can do a lot worse than reaching them within the platform. However, a little knowledge can be a dangerous thing, and many brand advertisers are spending boatloads of money on Facebook advertising without understanding how the platform advances their core business objectives. How many times in the last 12 months have we heard a CXO say "I want one million 'likes' on Facebook!" Ugh. To successfully integrate social media ads with the broader marketing plan, Facebook media needs to be measured and normalized with display media buying in other parts of the connected consumer's life.

This is a challenge because marketers cannot at this time measure who saw their ads on Facebook (just clicks). Nevertheless, savvy marketers can use data and insights from Facebook campaigns to optimize media plans on the "open web." For example, the Facebook-targeting parameters most correlated with subsequent "like" actions can be entered into a DSP to more effectively engage the 60 percent of users not on Facebook. Similarly, an advertiser that has indexed the affinities, demographics, and behaviors of top-converting consumers from their DSP campaign can reuse the insights to create non-obvious targeting schemes in Facebook that increase click-through rates and lower cost per click.

So think about skipping the "silo phase" of social media and moving straight to mainstreaming it. It's not about channels anymore; it's about using the data to seamlessly engage with consumers across connected experiences. By orchestrating a data- and insights-driven approach to social media advertising, you better deliver on the promise of social, rather than repeat past mistakes.

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ABOUT THE AUTHOR

Mike Baker

Mike Baker is president and CEO of DataXu. He has been pioneering digital media platforms for 20 years and is a widely recognized thought leader in interactive advertising. Before cofounding DataXu, he was vice president at Nokia, where he created and ran Nokia Interactive. Baker came to Nokia through its acquisition of mobile advertising leader Enpocket in 2007, where he was the founding investor and CEO. Baker was previously a partner at venture capital firm GrandBanks Capital. He has also been executive vice president at CMGI and Engage Technologies, an innovator in online advertising and behavioral targeting. Baker holds degrees in law and telecommunications management.

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