U.S. advertisers will spend more than 50 billion on digital advertising in 2014 -- $29.61 billion on direct response initiatives alone -- according to eMarketer's recent digital ad spending by industry report. Moreover, digital direct response grew $4.74 billion over last year and the social networks are paying attention.
Facebook took quick notice of direct response's growing role in digital ad spending and updated its ad buying and reporting tools to be objective-based in October of last year. It determined that Facebook advertising wouldn't be primarily about the ad unit or bid type (CPM, CPC) but rather about lower-funnel objectives that matter most to marketers -- objectives like app installs, offsite conversions, video views, and mobile coupon claims. Since then, it has rolled out many new features and tools to position Facebook as an attractive choice for direct response marketers.
Not to be outshined by Facebook's new focus on direct response, Twitter enhanced its ad offerings, quickly pitched its own direct response capabilities, and outlined to marketers how they could use Twitter to reach consumers at each stage of the purchase journey -- from awareness to conversion.
The key to direct response is:
Reach the right people and elicit an immediate response with content that compels action. To do this well, marketers need large data sets for segment creation, compelling content, and conversion actions for the context -- mobile, tablet, or desktop -- and of course, robust analytics to draw actionable insights and iteratively optimize for performance.
Given this definition, let's take a look at the features and tools Facebook and Twitter have rolled out in their quests to deliver direct response channels and, in the process, capture more of the largely Google-owned direct response advertising budgets.
Reaching the right people
It's not just about reaching the right people; it's about reaching people who are most likely to convert. This means that audience targeting and segmentation needs to go beyond demographic, geographic, and device -- which Facebook and Twitter do -- and also account for behavioral indicators of conversion intent.
"Custom audiences" and "lookalike" targeting
A custom audience allows advertisers to segment and target users with whom they already have a connection. This can be done with email addresses from their CRM, Facebook user IDs and app user IDs, and website pixels to name a few. Advertisers can use these advanced targeting capabilities to serve hyper-targeted ads based on users' past purchase behavior, website behavior, etc. It's exciting stuff.
Lookalike audiences are people who Facebook deems as similar to an existing segment -- people who are similar to those that completed a form or added a product to their cart, for example. Advertisers can use them to reach even more people that are likely to engage and convert.
We've seen impressive direct response results when these advanced audience-targeting capabilities are coupled with Facebook's optimized bidding, oCPM.
The majority of digital direct response dollars are allocated to search and as the indisputable leader in the space, AdWords has long served Google as a steady and massive revenue stream. Like Google, Twitter also provides the ability to target keywords by broad phrase and exact matching, but Twitter took it one step further and introduced negative sentiment filtering. This awesome technology analyzes tweets that contain the keywords marketers are bidding against and filters out negative sentiment so promoted tweets only show to people who are more likely to be open to their marketing messages.
Twitter tailored audiences
Twitter's tailored audiences allow advertisers to create and reach segments based on cookie IDs, Twitter user IDs, or from the information provided in a CRM, most commonly an email address. With tailored audiences, advertisers can reach segments based on past purchase behavior, remarket to visitors based on the web pages they visit, or reach existing customers on Twitter with a highly relevant tweet that takes into consideration CRM data.
Interest targeting by username
Twitter allows marketers to target by username, which can be incredibly useful for a variety of marketing goals like branding and engagement, but also for direct response. By targeting followers of a brand handle such as @NeweggHotDeals, marketers can reach people who are likely to purchase electronics and/or subscribe to another deal-orientated feed and serve them content that promotes their product or subscription offer.
Match to trending searches
Along with keyword and username targeting, Twitter has enabled promoted tweets to high-volume trending searches. From a direct response perspective, this means that a tweet promoting a holiday deal may be served in search results for "Black Friday."
Consumers need to see a message multiple times before they are motivated to take action, and these new tools allow advertisers to reach an effective frequency and, as a result, drive outcomes at scale.
Content that compels action
For all direct marketing initiatives, it's imperative that the content converts. Much of this is left up to the marketer, but Facebook and Twitter have tackled one aspect: the call-to-action (CTA). A CTA provides clear direction that prompts a visitor to take action -- a must for marketers looking to increase click through and conversions.
Whether the goal is to drive purchases or capture emails, the introduction of the CTA button sends a strong signal that Facebook advertising has moved beyond "likes," comments, and shares and graduated to capturing the interest (and budgets) of direct response marketers.
CTA links for video ads
In an effort to draw brand dollars away from TV, Facebook introduced premium video ads last December, and recently it announced a new enhancement to these video ad units that direct response marketers should take note of: the option to add a CTA link at the video's conclusion. The CTA link creates the option for advertisers to continue engagement by urging users to take further, lower-funnel actions such as learn more or shop.
Before the advent of Twitter Cards, direct response marketers using Twitter had to rely on minimal characters and a link to accomplish their goals. The options were limited and the results were unpredictable. With Twitter Cards, marketers are able to attach rich media experiences like video, a large photo, or even an auto-fill form to a tweet, occupying more in-stream real estate and allowing for a richer, more engaging experience. There are seven standard Twitter Cards, each of which can be coupled with a text CTA and link to create a successful ad unit for driving real business outcomes. This is a big improvement.
In addition to these, Twitter recently introduced two cards purpose-built to drive direct response outcomes: Website Cards and Lead Generation Cards. Like the other card types, both use rich media to capture the attention of users and have clear calls-to-action to propel further action. The Website Card allows advertisers to couple web content with a clear CTA button, driving traffic to any page on a site. The Lead Generation Card makes it easy to offer enticing content -- an offer, promotion, etc. -- in exchange for a user's email address. Content, imagery, and a clear CTA coupled with Twitter's advanced targeting features, make these ad units ideal for direct response advertisers trying to drive more traffic to their websites or capture more high-value leads.
Facebook and Twitter enable the presentation of content in new and compelling ways, but it's on marketers to make sure the campaign is timely, evokes emotion, creates a sense of urgency, and is relevant to those with whom we would like to interact.
Mobile has revolutionized the way consumers discover and buy products. It's no longer a purchase funnel; it's a purchase journey where multiple touch points -- across platforms and devices -- all work together to influence and drive purchases. This new way of marketing is more complicated. It requires clear and consistent insights and, for direct response marketing especially, a clear view into which channels are delivering the highest returns.
Facebook conversion pixels place a snippet of code on a website, giving insight into conversions that occur one, seven, and 28 days after an ad is viewed. Combined with objective-based bidding, Facebook pixels allow marketers to track cross-device behavior, measure performance against marketing objectives, and optimize for best results.
Twitter launched its version of conversion tracking in December 2013 and added a tab titled "Conversion metrics" in the Twitter ads dashboard to show tweet-level conversions, impressions, engagements, spend, and cost per acquisition (CPA).
Both these tracking methods are important because they allow advertisers to attribute conversions beyond last-click. Facebook and Twitter conversions can be compared to website conversions by channel. Marketers can see which campaigns drove last-click conversions and which influenced conversion, an attribution model can be made, and advertisers can optimize their social direct response campaigns accordingly.
As for the future of social direct response advertising, we will continue to see both Facebook and Twitter develop tools that help marketers drive lower-funnel conversions like lead capture and purchases. We have already seen other social networks emerge to take a stronger step into direct response. Instagram tiptoed into advertising in November 2013 and rolled out advertising globally just this month. Many (including me) are excited to see how Facebook applies its social advertising chops to the photo-sharing social network. For the past year, Pinterest has offered big brands, with big ad budgets, display ads based on a CPM model. This month it announced a new self-serve ad tool which allows advertisers to serve promoted pins on a CPC model, thereby opening up Pinterest to a whole new market -- direct response advertisers.
According to a recent report by KPCB, U.S. mobile advertising is up 47 percent year over year and continues to grow. And while U.S. consumers spend 20 percent of their time there, mobile advertising only accounts for 4 percent of spend. As advertisers get better at ensuring their budgets reflect the channels where consumers spend their time, mobile advertising spend will continue to rise. Social platforms have the unique ability to deliver ads where consumers spend their time -- in the social mobile stream -- and with the new push toward direct response, social is emerging as the best place to not only reach mobile dominant social consumers, but convert them as well.
While there is no argument that Google dominates the desktop web experience, to keep its current mobile market share it will need to create new ad products that help brands target and convert social mobile consumers.
Google -- it looks like the competition is closing in.
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