This is where Graham Mudd comes in. He's the Head of Vertical Measurement at Facebook and one the folks responsible for educating digital marketers on what metrics they should be using and even how to measure effectiveness across various digital channels. I was able to catch up with Graham at the Integrated Marketing Week conference in NYC this week and he in turn provided some pithy insights on this incredibly important topic to anyone spending pennies or millions on Facebook.
Neisser: Many digital media buyers are still obsessed with Likes and Clicks as a measure of ad efficacy. Is this a mistake and if so, what metrics should they be looking at?
Mudd: It's a mistake unless the business outcome they are trying to drive is either directly related or correlated to clicks or likes. If a marketer's goal is to build a community of its strongest customers online or drive people to their website, then likes and clicks are a great measure of success. On the other hand, if they're trying to drive sales, either online or offline, then they should be measuring sales, not likes or clicks. For instance, we've seen that for 99% of sales generated offline are from people seeing an ad online, not clicking on that ad.
Neisser: For several years, marketers and pundits have tried to put a value on a Facebook Like. Is this a fool's errand or have you seen cases where a Like ultimately translates into business value?
Mudd: The degree to which the value of a like is important is really driven by the marketer's goals. If the marketer wants to focus on building a community online or connecting with influencers, then understanding how much those customers are worth is obviously critical to understanding how much to invest.
If a marketer has more traditional goals like customer acquisition or driving online or offline sales, then they shouldn't be paying attention to likes as much as how much their marketing efforts drove sales.
One thing that's abundantly clear is that just like customer LTVs (life time values), there is huge variance from industry to industry and advertiser to advertisers in terms of the value of a fan.
Neisser: Measuring cross-publisher effectiveness seems like a smart idea. Are there any barriers preventing this from happening now?
Mudd: The primary barrier is siloed data. By that, I mean that each publisher is measured using a different technology/methodology so the ability to make comparisons across media partners is inherently limited. While there are definitely options out there, we believe there's a real opportunity to focus on comparability and standardization of measurement across platforms, which is why we acquired Atlas recently.
We really believe in cross publisher measurement for three reasons: (1) our customers are pushing for this and we believe it's good for digital marketing to be as accountable as possible; (2) we're confident that when measured accurately, Facebook will perform really well as a marketing platform; (3) we recognize that marketing budgets generally aren't growing, so in order for us to grow, we need to work closely with brands and agencies to demonstrate that we are a cost effecient and effective channel.
Neisser: How exactly do you measure cross-publsiher effectiveness?
Mudd: Really depends on the marketing objective: If the marketer has direct response goals, then we believe multi-touch attribution is the best methodology for understanding and valuing all the ad exposures that ultimately lead to a conversion. The last click before a purchase shouldn't be getting all the credit for exposures and actions taken along the way to purchase. If the marketer has branding objectives, then we believe they should be measuring and optimizing on reach and frequency using a tool like Nielsen Online Campaign Ratings (OCR) or comScore VCE. They should also measuring brand lift and if possible, offline sales. Our customers are working with a company called Datalogix to measure how ads on Facebook impact lift in advertisers' in-store sales.
Neisser: Can you provide any real world examples of brands/agencies that are measuring cross-publisher effectiveness and how this is working for them? (What kinds of things are they learning?)
Mudd: Many major direct response advertisers in verticals like Telecom, Financial Services and e-Commerce are using highly comparable measurement techniques like multi touch attribution. Within campaigns and from campaign to campaign they are constantly learning how various publishers perform and can reallocate budget accordingly.
Brand advertisers use tools like Nielsen OCR and comScore VCE to understand which publishers are deliver their desired audience with controlled frequency and maximum reach.
Neisser: Marketers tend to look at Facebook as exclusively a B2C channel. Can you give me an example or two of B2B marketing campaigns on Facebook that are moving the needle?
Mudd: HubSpot is one that comes to mind right away. It wanted to promote its brand as a thought-leader in the business-to-business field on Facebook to lead fans to its Page and ultimately engage them with other content and drive customer engagement and generate more leads. The company ran ads that targeted different age segments, including 24-34, 35-44, and 45-44, along with Likes and Interests such as “marketing director,” “marketing manager,” and “marketing manager.” HubSpot increased engagement on its Page by posting updates about marketing conferences and e-commerce tips as well as links to demos and videos. As a result it saw 71% sales increase from Facebook over the course of three months and 39% increase in traffic coming from Facebook during the course of three months
Neisser: Should B2B marketers look at different metrics than B2C brands when putting together a Facebook and/or cross-publisher ad campaign?
Mudd: Just as is the case for B2C marketers, B2B should try to use whatever metric mostly approximates or directly measures their business outcome. Measuring sales leads using MTA is certainly possible if the lead generation occurs online. Recently we've developed the capability to allow advertisers to upload CRM data to Facebook and reach customer segments on Facebook using a targeting feature called custom audiences. This is a really powerful tool for B2B marketers — and because CRM databases typically track transactional data, marketers can effectively connect exposures to ads on Facebook (and other online and offline channels) with conversions.
Neisser: Big companies with big budgets tend to have more sophisticated tools to work with. Can a small advertiser measure cross-publisher effectivenes and if so, how?
Smaller advertisers that have DR objectives often utilize ad products that are more straightforward from a cross publisher perspective. Tools like coupons or discounts, such as our Offers product, can be tracked on a redemption basis, which is easy to compare from publisher to publisher. Same is true for online conversion measurement -- Facebook and others provide conversion pixels which can link ad exposure to buying and be compared across sites.