Remarketing with Facebook Exchange

 

Remarketing with Facebook Exc

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Another important new arrow in Facebook’s advertising quiver is its 2012

launch of Facebook Exchange, or FBX, as it’s been nicknamed. Its two big

elements for marketers are 

(1) remarketing ads and (2) real-time bidding.

Remarketing, also known as retargeting, is already a much-used advertising

practice on the web, where site owners install scripts to cookie their visitors and

later display banner ads to them on third-party ad networks throughout the

Internet. The goal is to reel in past website visitors for repeat purchases or to

recover abandoned shopping carts.

With cookie-driven Facebook Exchange ads, you can target your website

abandoners later, on Facebook, with sidebar ads. (Sponsored Stories are not

available in this program.)

Picture a visitor to your website who browsed a few products, performed a

couple of searches, added an item to her shopping cart, but left your website

without checking out. These visitors are identified by cookies, which are used

later by third-party websites (news and entertainment sites, blogs, you name it)

to trigger relevant display ads.

How pertinent are these banners to your marketing efforts? Depending on the

information harvested by your website, your remarketing banner ads can display

the exact items that a particular consumer searched, viewed, or abandoned in the

cart. Personalized ads like these have been shown to produce a 20%-plus lift in

sales conversion over traditional ads.

Google’s Display Network, for instance, reaches 83% of Internet users

worldwide. Remarketing ads are shown only to qualified prospects (identified by

cookies as people who already “raised their hands” by visiting your website).

Note Facebook Exchange remarketing ads bring Facebook closer than ever to

identifying the customer “purchase intent” that all marketers covet. Direct-

response marketers are reporting good results from these new ad units.

Even when consumers don’t click the ads, the impressions can inspire purchases

later. A/B tests, with holdout groups consisting of users who are shown public

service announcements rather than ads, have demonstrated purchase

incrementality of 15–20%. These influenced purchases are called “view-

through” (as opposed to click-through) conversions.

Facebook is now able to use remarketing cookies to trigger ads. “For example,”

explains Facebook, “a travel site may be interested in reaching a person who

searched for a flight but did not complete the purchase. With Facebook

Exchange, this travel website can show that person a related ad on Facebook.”

8

FBX ads are facilitated by demand-side platforms, or DSPs, which are ad-

management networks that harvest the cookie data, then use it to execute online

media buys and manage bids for their clients. The initial DSP partners are

AdRoll, AppNexus, Criteo, DataXu, MediaMath, Nanigans, Optimal, Rocket

Fuel, TellApart, The Trade Desk, Triggit, Turn, Xaxis, and [x+1]. Cookies

dropped by these DSPs contain data on audience segmentation, product

information, and so on, in order to drive more precisely targeted ad buys.

These ad buys are executed on Facebook, using a real-time bidding platform (or

RTB, in the acronym-happy world of Facebook).

As with any remarketing ad buy, the available impressions are directly

proportional to your “cookie pool”—how many unique visitors came to your

website and triggered the cookie-dropping code for Facebook Exchange.

Recommended ad budgets can run from $25,000 to $50,000 per one million

unique users.

Another appeal of the FBX ads is real-time bid management. Because the cookie

tracking code is universal, many merchants will be vying for the same “cookied”

audience. Say Jane visited the websites of Banana Republic, Chevy, and the

Miami Heat. Whether the Heat just won the NBA Finals, or whether Chevy is

having a Labor Day sale, might determine which advertiser will bid the most to

reach Jane at the moment she logs into Facebook.

Facebook Exchange shows promise for direct-response merchants hoping to

achieve positive ROAS. Early advertisers included Orbitz and Nordstrom, and

the initial results look attractive

9—although, since they were reported by the

DSP partners, we might take them with a grain of salt. Early results included:

4x click-through rate compared with traditional Facebook campaigns

10–20x return on investment

300% better return on a cost-per-lead basis

One-fifth the cost per order acquisition (CPA)

18–30% conversion rate lift, compared with a holdout group who did not

see FBX ads

Google AdWords has long enjoyed the advantage of being closer than any other

ad platform to the purchase intent of customers—as indicated by the specific

items for which they’re searching. But with Exchange, Facebook moves much

closer to purchase intent than ever before. That’s a direction that seems

promising indeed for early Facebook Exchange advertisers.

Custom Audiences

If you like the idea of FBX remarketing (which means paying Facebook to target

your own website visitors when they’re on Facebook), you’ll love the new

Facebook Custom Audiences. With Custom Audiences, you actually upload

your own in-house customer database to Facebook, and then use that audience

as a target for Facebook ad campaigns.

With Custom Audiences, unique identifiers from your customer lists are used to

match your customers to their Facebook accounts in order to advertise to those

customers through Facebook. These unique IDs may be e-mail addresses, phone

numbers, or (if you’re a Facebook app developer who has access to them)

Facebook user IDs.

Ad partners see early promise as Facebook brings FBX retargeting system out of beta,”

September 13, 2012, Inside Facebook, http://www.insidefacebook.com/2012/09/13/ad-partners-see-early-

promise-as-facebook-brings-fbx-retargeting-system-out-of-beta/.

First question: why the heck would any business want to trust Facebook with its

customer database?

Second question: why would you pay Facebook for the privilege to advertise to

your own customers—people you already have mailing list and e-mail

permission to contact directly?

I’m not a hundred percent sure you do want to go down this path. It’s a brand-

new opportunity you’ll need to subject to due diligence. It seems fraught with

potential risks, but as I’ll explain, Facebook has taken pains to mitigate privacy

risks and ensure security.

Here are some arguments in favor of Custom Audiences:

Facebook “anonymizes” the data you upload and assures you it cannot and

will not steal your proprietary customer database or sell it to your rivals.

You may reap significant business benefits by finding and engaging more of

your customers on Facebook and turning them into fans of your brand page.

Your online community will grow faster. Your network reach to friends of

fans will grow exponentially.

By strategically building different Custom Audiences on Facebook, you can

add yet another channel to your multichannel campaigns: reaching groups

with offers and messages that are segmented, consistent, and synchronized

with other marketing channels.

Before you resort to Custom Audiences to grow your Facebook fan base, be sure

you use your promotional access to your house list in order to e-mail or send

direct mail exhorting your customers and prospects to “like” your Facebook

page.

But after you’ve covered those promotional bases, consider testing Custom

Audiences.

As Facebook puts it, “Audiences let marketers find their offline audiences

among Facebook users. Using email addresses, phone numbers or Facebook user

IDs to make the match, you can now find the exact people you want to talk to, in

custom audiences that are defined by what you already know.