Facebook Embraces Direct Response
Facebook dominates the Web, but it's never really cracked the direct response puzzle. That looks like it will change in 2013 with an avalanche of new measurement and targeting tools.
As a marketing platform, Facebook has traditionally thrived at top-of-the-funnel advertising. Unlike search, which hits people just as they express an interest in buying a certain product or service, social media marketing at its best builds relationships, and there's compelling evidence for its value.
The heavy lifting for this type of advertising, however, happens on the advertisers' own media—their brand pages. Although Facebook doesn't charge for brand pages, it can still make money from them by selling ad units that encourage users to become fans, or that amplify the reach of content shared on the page. In a lot of ways, these are straight direct response ads, but with a call-to-action for a "like" or "share" and not a sale.
Showing marketers how many likes or conversations an ad produces is one thing, but proving ultimate sales is another, much more difficult job. Because Facebook advertising traditionally operated high in the funnel, the platform has long suffered from a "last-touch" bias. Click rates and conversions probably underestimate the actual impact of advertising on the Facebook platform, especially for the small display ads that appear to the right of the newsfeed. If people see an ad while they're checking in on their friends, they may not click. Or they may click on it and do nothing. Later, however, they may decide to go to the website or a store and make a purchase. It's often this last channel that gets outsized credit for this sale.
Overcoming this last-touch bias has become an imperative for Facebook. First of all, Facebook has developed "sponsored stories," a native ad format that appears in the newsfeed and refers to how a friend interacted with a brand—becoming a friend, commenting on an article, redeeming an offer, etc. They still pivot off the relationships within Facebook's social graph but have much higher CTRs and engagement. With these ads, Facebook has a more powerful format, where CTR becomes their ally as opposed to an obstacle.
Yblog identifies emerging trends in the fast-changing landscape of media and marketing and finds fun and often surprising connections—with real-time implications for direct marketers.
Yory Wurmser currently writes and consults on marketing and media trends for clients interested in innovating through new media and the data it produces. This is an extension of what he did for six years at the Direct Marketing Association, ultimately as the head of the Research Department. As director of marketing and media insights, he revamped DMA's publications to focus more on digital media and developed partnerships with leading research companies, including Econsultancy, Ipsos and Winterberry Group. He also developed internal strategic research and recommendations to help DMA adapt to the new marketing world. Prior to DMA, Wurmser ran a boutique management consulting and coaching firm and, in an earlier lifetime, earned a Ph.D. in political science from Columbia University. He lives near New York City with his wife and three daughters.
Reach him at Ywurmser@gmail.com.