Facebook tests a new ad format that puts it further ahead of its competitors

Consumers’ fondness for and engagement with social media platforms are often cited as reasons that advertising on these sites is effective. There are even numbers to support those claims, with analytics from Facebook that show the great performance of marketing through the platform. But is Facebook an appropriate bellwether platform to gauge the entire social media industry?

Below, I take a look at some recent studies regarding advertising on social media as a whole, which indicate that with the exception of Facebook, most social media advertising performs rather poorly.

I also look at new advertising products that Facebook is testing that exemplify why it is so successful, and that differentiate it from other social media platforms. Lastly, I provide four takeaways to use whenever planning a social media campaign.

The effectiveness of Facebook ads compared to search and other social media

First, let’s look at Facebook numbers and see how they compare to search marketing. According to data from WordStream, the average click-through rate (CTR) for Facebook ads is 0.9 percent. This compares to the average CTR the company found for Google AdWords on its search network — 1.91 percent. Google AdWords on its display network is much lower, at 0.35 percent, while global display ad CTR is only 0.05 percent.

Conversion rates are relevant, too, and, according to the same research, Facebook boasts a 9.21 percent average conversion rate, compared to Google AdWords (search) at 2.7 percent. While these aren’t a complete picture of ROI, they’re sufficient to point out that Facebook ads are competitive in ad performance.

Unfortunately, it doesn’t appear that other social media platforms have the same success. In a study by CivicScience, 20 percent of consumers surveyed made a purchase in response to an advertisement on four major social media platforms: Facebook, Snapchat, Twitter or Instagram. Sixteen percent made a purchase based on a Facebook ad, while only 1 percent did so on Snapchat, 2 percent on Twitter, and 4 percent on Instagram (presumably, there were some consumers who made multiple choices).

Even accounting for the larger number of Facebook users over the other platforms (Instagram and Twitter, Snapchat), the Facebook number is still many times greater than that of the other platforms.

Consumer Purchases From Social Media Ads (Source: CivicScience)

So, why do social media users generally not respond to ads other than on Facebook? Unlike local search, social media users are generally not looking for purchases or information on businesses or services. Users are busy posting their own content, catching up on what their friends are doing or reading news articles that catch their interest. And while keeping it that way might be appealing to users, it’s not very business-friendly.

Snapchat co-founder and CEO Evan Spiegel shied away from favoring advertising, saying in a Business Insider story that the company “really cares about not being creepy” and thus chose not to emphasize targeting. While that is slowly changing, Snapchat still only targets ads in broader categories, which might explain their 1 percent number in the CivicScience survey.

Failing to make advertising engaging and relevant to both the advertiser and audience results in poorly received ads.

New Facebook predictive targeting

Facebook, on the other hand, has the audience data and targeting capability to make ads highly effective. Social data such as interests, articles read, apps used, pages visited, posts liked, ads clicked, places checked into and posts shared all help form detailed profiles that may be targeted. The ability to serve ads to a specific audience greatly increases the chance of catching consumers in that micro-moment when your ad meets a need or interest of the consumer at the right time.

And Facebook is constantly testing new ways to boost ad performance. Two weeks ago, when traveling out of town, I received a notification from Facebook while on the app. This notification feed is likely the first place most users go to when on the platform to see who liked one of their posts or what friend mentioned them in a comment.

Facebook’s notification to me stated, “You’re near 3 highly rated restaurants you might like,” and clicking on it took me to a map with three pins near my location. Overlaying the map was a Google-like “snack-pack” result listing a restaurant, the cuisine, star rating, number of reviews and a summary of the menu based on Facebook reviews or posts. Swiping the screen took me to the second of three restaurant listings. Clicking on any of the listings took me to the restaurant’s Facebook page.

Facebook Notification Targeted Ad

Such predictive intelligence, where Facebook serves up local search results in anticipation of the user needs before the consumer reveals intent, is only possible with rich and timely data — something Facebook possesses. While I had visited a similar dining establishment to those displayed to me on that particular trip, future ads might consider my past dining habits from past trips and what variety of restaurants I frequent when I travel.

The ads were still successful in engaging me as I was visiting a city I don’t travel to often, and the ads provided relevant information — I was definitely going to look for a place to eat. The targeting was on point and delivered in a timely manner, making it an effective advertisement.

What about Instagram?

Some might question the above attribution of Facebook ad success, since Instagram has access to the same social data and similar targeting capabilities. Yet CivicScience’s survey indicates that Instagram’s ads, while more effective than others, didn’t come close to Facebook’s performance.

The difference likely comes down to the narrower interests of Instagram’s audience. Facebook itself acknowledges that the visual medium is most appropriate for brands in categories like fashion and beauty, food, arts and music. And Pinterest, which likewise depends on visual media, narrowed ad support to Retail and Consumer Goods in recognition of its core business categories. It would be interesting to see the performance metrics of ads in these core areas for Instagram.

Additionally, Facebook is simply a more business-oriented platform with business pages, listings and reviews. And Instagram accounts are often linked to Facebook accounts.

Takeaways

The point of this article is not to say that Facebook is the only social media platform where advertising works. Rather, the goal is to analyze what makes Facebook effective and apply those principles to advertising on other social media or any other ad campaign.

Below are four takeaways based on how well Facebook advertising works, and what it is that makes it effective:

1. Social media data is rich and will only grow in depth as consumers continue to spend more time on platforms, post more personal experiences, click on more content, share more articles and check into more places. Use these detailed profiles to target your ideal audience and spend less by reaching only those who need to hear your message.

2. Different platforms require different strategies based on the way consumers access and consume social media on that platform. Plumbers and electricians likely won’t find Instagram to be a good outlet for their marketing. Retirement communities and heart surgeons don’t want to use Snapchat. And amusement parks don’t want to advertise on LinkedIn.

   Likewise, you wouldn’t do a podcast on Musical.ly or a 2-minute-39-second “short film” featuring Kendall Jenner with a Pepsi can on Snapchat. Well, you shouldn’t do that at all (more on that below). These are obvious examples, but they make the point that you need to customize your marketing to the social media platform format.

3. Targeting the right audience is only half the battle. Failing to engage them with a message that is relevant to the consumer and feels natural within the context of the surrounding content is simply a bad ad. Zhong notes that even kids can tell the difference between a good and bad ad. An example would be the aforementioned Jenner-Pepsi ad, where soda as the solution to injustice and conflict was universally hailed as bad.

   The days of one creative being used universally are gone. Message to your target audience according to their interests and based on the factors by which you targeted them. And consider the circumstances of the audience. The story about HEB, a Texas grocery chain, and how it kept stores open and stocked after Hurricane Harvey to provide for the needs of Texas residents has generated more positive conversation about the brand on social media than any marketing effort could.

   Running product ads on Twitter targeting #HurricaneHarvey probably won’t get a lot of attention from those trying to catch coverage of the storm and its aftermath. But a campaign about your brand’s charitable response effort and ways Twitter users can join in likely would.

4. It’s important to measure the ROI of your marketing so you know which audience targeting worked. It may not be as intuitive as you think. Ninth Decimal and Ansira found in a case study that fast food diners were not in fact an ideal target audience for a Quick Service Restaurant client. Rather, DIY enthusiasts, movie enthusiasts and leisure travelers responded best to advertising for their client. Analyzing purchases from the case study campaign helped better target future campaigns and further boost the performance of the client’s ads.

In closing, local businesses often feel like they don’t have time to customize marketing campaigns whether they be on social media, paid search or any other media channel. But if you don’t take the time to customize those campaigns and target your audience, it’s likely you won’t get a good return either. Doing it right is worth the effort.

Some opinions expressed in this article may be those of a guest author and not necessarily Marketing Land. Staff authors are listed here.

About The Author

Wesley Young

Wesley Young is the Local Search Association’s vice president of Public Policy. He blogs about the industry on the Local Search Insider blog.