Best of 2012: New Facebook Ad Formats Prompt Measurement of New KPIs
Marketers are still analyzing what kind of return their Facebook marketing investment is bringing them. At the same time, the social media company is rolling out new types of ads for marketers to use. Resolution Media and Kenshoo Social try to make sense of these changes and offer up some new ideas about measuring KPIs, key performance indicators, in their new Metrics that Matter Report.
This report primarily focuses on Facebook’s Marketplace Ads. Some of these ad types were measured and found to deliver the following click-through rates (CTRs):
- Post Ad .07%
- Sponsored Story .07%
- Web ad .03%
- Social ad .04%
The data also shows that higher CTRs leads to lower cost-per-click rates:
- Post ad $0.24
- Sponsored story $0.46
- Web ad $0.59
- Social ad $0.79
Resolution Media also recommends that marketers consider the cost-per-thousand (CPM) rates the company offers. In general, Sponsored Stories are most expensive at a rate of $0.31 CPM while web ads are the least expensive at $0.18 CPM.
There are many parts to sponsored stories and the related CTR rates vary. For example, it’s easy to like a brand’s post and that method sees a .09% CTR rate. But sharing an app is a little more complicated and the CTR is .02%. But since deeper engagement is generated by an app share, the CPC is also price highest at $1.17.
The analysts remind readers that one of social’s advantage over something like search is “the ability to serve customized graphical ads based on individual interests.”
The study also covers exposure statistics. In the pre-engagement world, marketers should consider how much of the target audience “is exposed to the brand” and how often exposure takes place once the campaign begins. This sounds pretty much like the kind of data marketers have long counted on traditional media companies to provide. Measuring this in the social media world is different though. In this study, exposure rate is calculated as the percentage of the total Facebook monthly audience. Frequency is divided into quartiles and analysts show how high exposure rates lead, not surprisingly, to higher conversion rates. What’s more interesting about this study is how it pinpoints the optimal exposure rate. During the first 1–3 exposures, the conversion rate is 57.17%. The rate drops steadily to 11.95% after 10 impressions.
So what’s a marketer to do? Among other things, realize that conversion peaks at the exposure frequency of 7 times.
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