3 Things Facebook wants you to know about advertising

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With the release of a new tool, built in collaboration with, Datalogix, Facebook reckons it can change the way people look at online campaigns.

Advertisers, it says, should forget about the number of clicks their ads get and instead focus on how many people they get into their retail spaces because of them. Using the tool, Facebook conducted a study of 50 ad campaigns, releasing three key findings:

1. Impressions create value

Ninety-nine percent of sales generated from online branding ad campaigns were from people who saw, but did not interact with, ads— proof that it is the delivery of the marketing message to the right consumer, not the click, that creates real value for brand advertisers.

2. Reach drives revenue for online brand marketers

This is a concept very familiar to TV marketers, who often start with a reach objective—but until now hadn’t been proven for online. When applied to digital brand campaigns, the study demonstrated that campaigns that maximized reach had on average a 70% higher return-on-investment.

3. Finding the right message frequency is key

The study revealed that for online brand campaigns, if you reallocated high frequency impressions to people seeing too few impressions, you would see a 40% increase in ROI with the same budget. What this means is that for every online campaign there is a “sweetspot” of effective frequency that maximizes return on investment, and that the DataLogix tool can help marketers empirically isolate that sweetspot for each brand and campaign.

The social networking giant says that “findings demonstrate a clear roadmap to success for digital marketers, focused on reaching the right consumers at the right frequency.”

It’s worth bearing in mind however that Facebook is under pressure to show that its advertising platform is viable. It has to prove to advertisers that spending money on the platform is worthwhile. Changing the model might just work, but only of advertisers buy the message its selling. Right now, the perception is that engagement with Facebook is ads is low and sinking fast.

Right now, there should probably still be a degree of scepticism, but at least it seems to have taken veteran Silicon Valley reporter Tom Formeski’s message on board and is helping advertisers with the tools, shared knowledge and best practices they need.

Watch live streaming video from fbmarketingtalks at livestream.com
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