2013 facebook whitepaper

WHITE PAPER

The Marketer’s Guide to Driving
ROI From Facebook Advertising
Top Tips For Building Awareness &
Generating Financial Returns

The Marketer’s Guide to Driving ROI From Facebook Advertising

Table of Contents
Introduction 3
Setting Objectives

4

Audience Targeting

6

Creative 8
User Experience

10

Tracking Conversions, Both Online and Offline

12

Mobile Strategy

13

Bidding 14
Conclusion 15
About Marin

Copyright © 2013 Marin Software Inc. All rights reserved.

16

2


Introduction
Facebook presents marketers with a vast and truly global advertising opportunity:
•

Of the seven billion people living on our planet, 30% have access to the internet
and almost half of those internet users (nearly a billion people) access Facebook1

•

7.5% of global page views are on Facebook2

•

The average user views 18 unique pages on Facebook each
day, spending around 28 minutes on the site3

•

Facebook officially surpassed Google in weekly traffic in 20104

Percentage of population on Facebook by continent:

44%

36%

N. AMERICA

S. AMERICA

5%

30%

AFRICA

EUROPE

7%

40%

ASIA

AUSTRALIA

As Facebook becomes more entrenched in people’s lives, marketers increasingly seek
to engage with Facebook users through ads, fan pages, news feeds, applications, and
events. Facebook’s advertising revenue in the fourth quarter of 2012 grew 41 percent
to $1.33 billion6, a testament to the growth of user adoption and the value of the
channel. According to statistics from Facebook, people who like a brand’s Facebook
Page spend twice as much money on the brand’s products as people who have not
connected.
Following the success of our 2011 white paper, The Search Marketer’s Guide to
Successful Facebook Ads, Marin Software studied our customers—some of the world’s
most recognizable brands and prominent Facebook advertisers—and summarized
various strategies that any advertiser can employ to initiate a Facebook campaign or
improve the performance and ROI of existing Facebook campaigns. This white paper
will guide readers through several key aspects of successful Facebook advertising, from
reaching the right audience, to fine-tuning ads, to ensuring a positive experience for
users, to effective bid management.

1: http://www.iabuk.net/news/facebooks-british-population-reaches-27m
2: alexa.com
3:

alexa.com

4:

http://www.ft.com/cms/s/2/67e89ae8-30f7-11df-b057-00144feabdc0.html#axzz2QUDZgZGx

5:

http://www.socialbakers.com/facebook-statistics/

6. http://news.yahoo.com/facebook-grows-revenue-40-percent-211444700.html

3


Setting Objectives
Getting Started
The key to any successful marketing program is to set clear objectives, and Facebook
marketing is no different. With the proliferation of Facebook advertising products,
marketers are constantly presented with new opportunities to capture the attention of
customers across every stage of the buying cycle. While some advertisers continue to
view Facebook in traditional, transactional, performance marketing terms, successful
Facebook marketers are beginning to adopt a “full funnel” approach. They select their
objectives and use these relatively new creative formats to craft a holistic approach
to marketing in this rapidly growing channel. Marketers can start by answering two
fundamental questions:
1.) What business outcome(s) would you like your Facebook marketing investment
to produce?
2.) How will you measure and optimize these outcomes?

Advanced Tactics
Beyond the standard goal of conversions, consider the awareness amongst your target
audience of a new product line or promotion. Think about how to influence customer
perception of your brand to increase the likelihood of purchase in the future. Consider
building customer loyalty in order to drive repeat purchases from your top customers.
Successful marketers are experimenting with awareness and consideration building
techniques by utilizing new Facebook ad types and destinations, while at the same
time continuing to focus on driving conversions by targeting Facebook users with
purchase intent. Those able to identify and articulate clear “top of the funnel” and
“bottom of the funnel” objectives throughout the organization will ultimately have a
more successful Facebook campaign experience.
1.) Consider the maturity of your brand and degree of equity on Facebook –
How established your brand is on Facebook will shape the goals you select.
For example, a startup may be new to Facebook and therefore may need to focus
on fan acquisition in order to establish a community to engage with over the
long term. Mature companies with a strong fan base may find it more appropriate
to leverage their existing networks for word-of-mouth marketing and driving
brand engagements.
2.) Consider your industry – What goals are appropriate and realistic for your
business, your customers and the products you sell? For example, a marketer
in the retail industry may set a specific sales objective at a target ROI and use
a promotion to achieve this objective. A B2B marketer may instead choose to
use Facebook ads for the objective of increasing awareness through a page post
distribution strategy that promotes thought leadership.
4


3.) Consider the brand assets you have available to promote – Over the past
year, Facebook has allowed marketers to promote numerous online and offline
activities and assets, including mobile applications, offers, events, and Facebook
applications. Consider which assets you have available to promote and how will
they support each of your objectives. If Facebook-compatible assets are limited,
develop new assets to promote.
4.) Identify the Facebook metrics that align with your objective – Consider the
awareness and conversion metrics that make sense for your business. To fill the
top of the funnel, are you concerned mostly with the reach and frequency of your
message? Does it make more sense to focus on engagement metrics such as
clicks, shares, and likes? Or would it be better to focus on driving leads, sales, or
a combination of both? Have a conversation with your senior-level management
about the short-term and lifetime value of each of these metrics and be sure to
justify the importance of investing towards these objectives.
5.) Confirm tracking and reporting capabilities – Once marketers have identified
success metrics for each campaign objective, they must ensure proper reporting
processes are in place to track progress towards success. Consider utilizing a
social ads management tool that tracks on-Facebook (social) engagement metrics,
off-Facebook (website) conversions, sales, ROI, and Lifetime Value in a single
interface. Doing so will allow the marketer to accurately determine the ROI of their
Facebook program and budget accordingly.
Once business goals are confirmed, develop an action plan that allows other higher-level
stakeholders and media managers to understand how proposed Facebook investments
and targeting strategies align with other company initiatives. This plan will also serve as
a guide for Facebook managers to implement and optimize new campaigns. A sample
action plan can be found below:

BUSINESS GOAL

FACEBOOK CAMPAIGN
OBJECTIVES

SUCCESS METRICS

BRAND ASSETS TO
LEVERAGE

ADS OR STORIES

Increase Awareness

Reach new Facebook
users within
target auidence

Social reach, Likes,
Video plays,
Virality, Image tags

Page, Page posts,
Videos,Images

Stories

Drive Consideration

Acquire new Fans and
increase
engagement with brand

Fan volume, Shares,
Application intalls, Event
RSVPs

Page, Application,
Events

Both

Generate Conversions

Increase sales and drive
installations of new mobile
application

Leads, Sales, CPL, ROI,
Mobile
app installs

Website, Mobile
appliction, Offers
(promotions)

Both

Build Customer
Loyalty

Drive repeat sales of high
value customers and increase
customer advocacy

Sales from current
customers,
Comments on page

Customer data (via
custom
auidences), Page,
Questions

Ads


5


When creating the action plan, consider a mix of ads (voice of your business), stories
(voice of your customers), or a combination of both to communicate the message
to your audience. In short, ads are generally best for targeting a broad audience on
Facebook to promote content or targetingbrand assets to build awareness and/or
acquire new fans. Conversely, sponsored stories allow Facebook users to act as brand
ambassadors by promoting their engagements with your brand to their friends.

Audience Targeting
Getting Started
The demographic of Facebook users is similar to that of the general internet population
— so if your target customers are online, they are on Facebook too. As such, Facebook
has secured a place on the media plan of most online advertisers, but how do they
reach the right Facebook users? How do they ensure that clicks from users turn into
actual engagement with their brands?
At the heart of Facebook’s mission is the concept of sharing information and
advertisers treasure that information. Through their personal profiles, users share
information about age, occupation, hometown, friends, and interests. Through their
actions, users provide key information for advertisers, such as the brands and pages
they like.
Advertisers can leverage this rich information through the plethora of targeting options
available on Facebook, making it easy to reach the right users, at the right time, with
an appropriately engaging message. Search marketers can draw on experience from
other channels for Facebook audience targeting ideas. Analyzing best performing
keywords and best performing placements can provide key insights into what
audiences will likely perform best on Facebook.

Advanced Tactics
Many brands already have a well-established Facebook page and fan base. Marketers
with this luxury can mine the demographics of an existing fan base for appropriate
targeting criteria for future ad campaigns. Advertisers can expand on this foundation
through root analysis of existing fans’ likes and interests. If existing fans are interested
in “healthy eating,” then it makes sense to explore other lifestyle terms such as
“health foods.” Tools such as the visual thesaurus, Visuwords, can provide visual
inspiration for additional areas of interest to explore.


6


Gardening
Farming | Agriculture | Husbandry

Horticulture | Plantsman

Landscaping | Landscape Gardening

Horticultural
Gardening | Horticulture

Landscape

Flower Gardening | Floriculture
Landscape

Gardening

Market Gardening

In addition to rich demographics, Facebook users bring something even more valuable
to the equation: friends. Social endorsement has always been powerful, but with
Facebook, social endorsement now takes place online. As kids on the playground, we
often wanted the same sneakers our friends wore. As adults, we are more likely to go to
restaurants that our friends recommend. And this same concept applies in the online
world, where friends are more likely to click on ads for brands that are liked by friends.

Top Tip: Focus on themes rather than individual words. For example, use “flowers”
rather than “roses.” Make sure your audience reach is not too small and don’t
forget to save your audience templates for quick re-use.


7


Creative
Getting Started
After identifying appropriate target audiences, it is important to ensure that creatives
match the audience segments. If targeting recent graduates with travel ads, imagery
that depicts groups of young travellers would build empathy with Facebook users who
see the ad. It is also important to stand out from the crowd.
The Paddy Power advertisement below on the left was shown to a male Facebook
user in his 20s who has expressed he likes “football” and “golf” on his user profile.
Not only does the bold color stand out on the page, but it is also well-tailored to the
audience and made even more compelling with a social endorsement. The ad to the
right was shown to a recently engaged female Facebook user. This ad was also welltargeted and stands out with contrasting colors, simple imagery, and that all-important
social endorsement.

The Paddy Power logo has instant brand recognition by millions of people in the UK.
The red and pink ad stands out from the white and blue dominated Facebook user interface.

The Paddy Power ad uses another great tactic – making use of well-known brand
imagery. The green and white logo is instantly familiar to a lot of users in the UK,
which encourages clicks. Macys, a top 40 global retailer, uses a different but equally
effective tactic to appeal to its target audience on Facebook. In the Offer ad below,
they leverage a profile picture of a young female as their creative image. Selecting an
image that directly appeals to your targeted audience is critical as they are responsible
for 70% of your clicks. When using this approach, the person portrayed in your images
should be representative of the specific audience segment that you are targeting with
your offer, as Macys has done below.

Macy’s Facebook Ad


8


Advanced Tactics
With careful selection of target audience and appropriate creative, it is still possible
serve up an ad that misses. Creative rotation is the key to ensuring you capture the
attention of as many users as possible. The only way marketers can combat ad fatigue
is to swap old ads for new. Make sure to keep track of the ads that work best and use
similar themes and messages in future ads.
Facebook promotions act as a reward to users for interacting with a brand on Facebook.
The Now TV ad below is a wonderful example, pulling together many of the best
practices discussed. For example, the bright pink image catches the eye, the familiar
brand imagery provides credibility, and the ad was well-timed, shown within two weeks
of Easter. Furthermore, it attempts to create an emotive response from the audience,
conjuring images of spending time with family, and entices the user to click through by
offering a free trial.

Easter Family Films Ad

Making the best use of the various creative formats available to Facebook advertisers
can be a daunting task. Advertisers must choose between using standard ads, page
post ads, mobile app install ads, or sponsored stories formats alone or in combination.
And with Facebook continually innovating, it is likely that additional creative formats
will be available in the future.
In general, a blend of different ad formats produces the best results. Different users
respond to each ad format in different ways. For example, some will completely ignore
mobile app install ads but will show a high propensity to engage with ads endorsed by
friends. If data indicates little return from a given ad format, remove it from the plan
and consider testing another one. However, make sure you have fully evaluated the
impact of an ad before deciding to remove it.

Top Tip: Save time and improve performance with an image library and automated
creative rotation tool to keep your ads fresh and to capture the attention of as
much of your target audience as possible.


9


User Experience
Getting Started
Let’s take a moment to walk through a user journey with a brand on Facebook – A user
may see your ad, click “like” and go to your Facebook brand page. In this example,
your brand has acquired a Facebook fan. However, acquiring a new fan alone may
not present clear long-term value to a brand, unless the user is given a compelling
reason to return and re-engage with the brand. A Facebook user does not necessarily
want to be immediately directed away from Facebook to an e-commerce site, so
consider tactics to reward the user for engagement. There are countless ways to reward
Facebook users, including fan-only promotions and vouchers, sale previews, prize
drawings, and competitions.

Voucher from Ocado

The Ocado ad above promotes a voucher to the first 1,500 customers to claim the offer.
This not only rewards existing fans but encourages them to regularly visit the Ocado
Facebook page. Once a user has liked your brand on Facebook you can then open
up dialogue with them. Over time you can send messages and status updates about
forthcoming sales, new products, and events. These messages can be used to send
users to your website and drive sales.


10


Advanced Tactics
Facebook apps provide the marketer with more control over the user experience as well
as the ability to gather detailed demographic data from user profiles. We live in a world
where there is always “an app for that,” and Facebook is a prime portal through which
to reach app-hungry users. Facebook apps are primarily for use within the Facebook
user interface, but you can also drive users to download apps through Apple or Google
Play. While building a Facebook app may be time and resource intensive, the long
term benefits to marketers can be significant; engagement with users is often higher
quality and can be more rewarding compared to other forms of Facebook advertising
and interaction.
As many Facebook advertisers work towards fan acquisition, they are presented with
two distinct problems: how to acquire new fans and how to retain existing fans. In the
Audience and Creative sections of this white paper we discussed ways to acquire new
fans, so now let’s talk about driving interaction and retaining existing fans.
Users need a good reason to interact with your brand, but it doesn’t necessarily have
to be a financial or tangible reward such as a discount or prize. Facebook users love to
share information. We tell our Facebook friends what we’re doing, we let them know
where we’ve been, and we share photos and videos. Ads that encourage users to share
their experiences get great click-through rates.
For example, Discover Ireland’s ad below invites users to share their St Patrick’s Day
celebrations through uploading pictures. This ad alone generated nearly 6,000 likes
and over 450 shares, 100s of users uploaded photos and videos, and the most liked of
these generated an additional 3,000 likes. And it didn’t stop there - the conversation
will continue as Discover Ireland announces the winner through a status update, which
will be seen by all their existing and newly-acquired fans

Discover Ireland Ad

Top Tip: Make the most of the Facebook experience to encourage long-term
interaction with users. Reward your fans with user-generated content and also
tangible rewards from time to time.


11


Tracking Conversions, Both Online and Offline
Getting Started
CMOs love online advertising because it is accountable. It is now commonplace to track
conversions resulting from ad clicks, and Facebook is no exception. Regardless of their
objective, before spending a single dollar, advertisers need to ensure that adequate
tracking is in place. Without proper visibility into revenue streams, it will be difficult to
evaluate the success of Facebook advertising.
Many Facebook campaigns will have short-term goals such as fan acquisition, as
well as long-term goals such as sales. So to fully understand the value of Facebook
advertising, it is important to properly track multiple conversion types. Facebook’s
integrated tracking solution automatically tracks social conversions, such as likes,
RSVPs, and application installs. Combined with cost data, Facebook marketers are
able to determine the cost of a like, an RSVP, or an install and use that information to
increase volume and improve ROI.
However, if there is a need to track off-Facebook conversions, such as account
openings, sales, etc., marketers often rely on a third-party tracking solution to monitor
conversions and tie them back to Facebook clicks. Using revenue-to-click attribution,
marketers can understand how Facebook advertising contributes to actual sales and
revenue.

Advanced Tactics
What happens when users convert offline? When promoting an in-store sale or event,
how do advertisers measure the number of people who take advantage of the offer? One
possible answer is to utilize a third-party solution to generate unique voucher codes.
The codes can be distributed to Facebook users and can be redeemed by them at the
point of sale (either electronically or in paper form) in exchange for a discount. This
will provide direct evidence of Facebook-influenced sales and provide insights into
whether those customers were more or less profitable than average. Facebook marketers
can combine this offline revenue data with CRM data overlaying demographic data to
further inform analysis.

Top Tip: Think about all possible touch points you create with users and
deploy third-party tracking solutions to understand the full impact of Facebook
advertising.

12


Mobile Strategy
Getting Started
Today, more than half of Facebook users access Facebook via a mobile device7.
As mobile usage continues to increase, so does Facebook’s revenue from mobile
advertising. At the time of this writing, 23% of Facebook’s advertising revenue comes
from ads targeted to mobile devices8.
Separating ads that target mobile devices and those that target desktop devices into
different campaigns is a must in order to understand how performance varies across
different devices. Additionally, by creating different campaigns with different ads, you
can tailor the ads to mobile or desktop users. Today, mobile ads have a lower CPC
(compared to desktop ads) and can be a good way of gaining low-cost likes, thus
providing a growing list of fans to target in the future.
It is worth noting that mobile ads are shown exclusively in the Facebook News Feed.
Therefore, advertisers should think carefully about timing, as many people use the
work commute time to catch up on Facebook activities or share new information with
friends. Advertisers should also think carefully about landing pages and destination
URLs because mobile users will be frustrated if an ad takes them to a non-mobilefriendly destination. Therefore, one effective mobile strategy could be to focus on
simple Facebook engagement conversions that are contained entirely within the
Facebook environment.

Advanced Tactics
Mobile app install ads are similar in look and feel to other ad formats, with a key
difference being that they invite users to engage with games and apps rather than
Facebook pages. Clearly, this type of ad is limited to companies that have developed
Android or IOS apps, but it provides marketers with both a new way to interact with
customers and a valuable stream of analytics. Mobile offer ads also provide a great
way to engage with on-the-go mobile users, such as by offering a discount at a store or
restaurant while mobile users are near that location. As with all Facebook marketing
efforts, revenue tracking is especially important with mobile creative formats. Reports
show that users who have downloaded a retailer’s Facebook app spend more than those
who have not and are more likely to be repeat customers.

Top Tip: Take advantage of the growth in mobile with mobile-specific campaigns.
Track long-term engagement, sales, and revenue using a sophisticated tracking
solution.

7. http://www.nytimes.com/2012/05/15/technology/facebook-needs-to-turn-data-trove-into-investor-gold.html
8.

http://www.reuters.com/article/2013/01/30/us-facebook-results-idUSBRE90T1DA20130130


13


Bidding
Getting Started
Facebook offers advertisers a chance to buy ads on a CPM, CPC, or “OCPM” model.
The majority of advertisers opt for a CPC model, taking advantage of the opportunity to
pay only for clicks. The CPM or OCPM models are worth testing if you are targeting a
very niche audience and are facing low levels of competition.
For advertisers wishing to take advantage of the CPC pricing, Facebook provides a
suggested bid range, which will ensure visibility. If advertisers set bids too low, there
is a risk that Facebook will not show the ads very frequently. If impression volume is
limited, advertisers may not be able to achieve optimal audience reach and campaigns
may flounder despite well-crafted audiences and ads. Alternatively, implementing
bids at the top end of Facebook’s recommended bid range could result in paying more
than necessary. As a general guideline, advertisers should pick a mid-point in the
recommended bid range and adjust from there based on performance.

Advanced Tactics
Tracking is essential for automated Facebook bidding solutions. In general, the more
data points an algorithm has to use for decision-making, the better the results. For
example, if an advertiser seeks both likes and sales, it is important to select a tracking
provider that can distinguish between on- and off-Facebook conversions, and weight
them independently. A tracking solution that treats all conversion types equally will
prove problematic, diverting budget away from ads that drive more high-value sales.
Marketers must also account for “noise” produced by short-term campaigns when
optimizing Facebook creatives across an entire portfolio. For example, the Marks &
Spencer ad below was part of a one-day sale promotional campaign designed to instill a
sense of urgency and drive a short-term spike in sales. Although short-term promotional
sales may produce a quick lift in sales volume, manually bidding on these types of
creatives can be expensive in terms of time and unnecessary spend.

Marks & Spencer Ad


14


Facebook would deem this creative as a new ad upon creation and, as such, marketers
would have no historical data upon which to select an appropriate starting bid. In this
example, marketers would need to analyze their creative portfolio to find other creatives
with a similar message and goal and then base their bids on the performance of those
previous ads. This process can be time-consuming and prone to error. Sophisticated
third-party bidding solutions enable marketers to create custom groups of ads based on
business goals and will then use data from other ads to calculate the best bid. This can
be done at scale within a few clicks, saving time and improving ROI.

Top Tip: Choose an automated bid technology that can integrate multiple
conversion types and conversion data from multiple sources.

Conclusion
It is clear that there is a significant opportunity to drive incremental ROI through
Facebook advertising. Whether this white paper prompts you to set up your very first
Facebook campaign, give Facebook another go after a shaky start, or fine-tune your
successful campaigns, we recommend keeping the following concepts in mind:
•

Don’t be afraid to experiment with new targeting options and ad formats

•

Remember that Facebook advertising is often about measuring
long-term engagement rather than short-term sales

•

Consider Facebook alongside the rest of your online and offline activity for a full picture
of the success and uplift

Marin software is fully integrated with the Facebook advertising API and enables
marketers to efficiently follow the best practices outlined in this white paper.


15


ABOUT MARIN SOFTWARE
Marin offers the complete revenue acquisition management platform, incorporating
the workflow, analytics, and optimization tools necessary to enable marketers to save
time, make better decisions, and improve financial results. Marin represents a natural
evolution for the marketer, offering tools that measure, manage, and optimize digital
advertising campaigns to achieve desired revenue outcomes. With Marin, advertisers
can transform data into actionable business information and complexity into
opportunity- which is the simplest equation to drive revenue. Our customers, including
many of the world’s largest interactive agencies and advertisers, rely on Marin
Software’s platform to manage more than $4.7 billion of annual marketing spend.
Leading advertisers using Marin include University of Phoenix, Macy’s, Razorfish,
Neo@Ogilvy, PriceGrabber, Symantec and Salesforce.com.

United States

EMEA

APAC

San Francisco
123 Mission Street
25th Floor
San Francisco, CA 94105
415-399-2580

United Kingdom
1st Floor, Orion House,
5 Upper St Martin’s Lane,
London, WC2H 9EA
+44 (0)203 595 1595

Japan
3rd Floor, Sanno Park Tower
2-11-1 Nagata-cho
Chiyoda-ku
Tokyo 100-6162
Tel: +81 3 6205 3179

New York
215 Park Avenue South
Suite 1801
New York, NY 10003
Tel: (646) 490-2427

France
Actualis Level 2
21 and 23 Boulevard Haussmann
Paris 75009
Tel: +33 1 80 95 68 60

Singapore
One Raffles Quay
North Tower, Level 25
048583
Tel: +65 6622 5888

Chicago
203 N. LaSalle St,
Suite 300-A
Chicago, IL 60603
Tel: (312) 267-2083

Germany
Am Kaiserkai 1
20457 Hamburg
Tel: +49 40 80 80 74-522

Australia
Level 33
Australia Square
264 George Street
Sydney NSW 2000
Tel: +61 (0)2 9258 1820

(415) 399-2586
info@marinsoftware.com
www.marinsoftware.com

123 Mission Street,
25th Floor
San Francisco, CA 94105 16

© 2013 Marin Software. All rights reserved. Other trademarks belong to their respective owners. WP 267_0620613

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