Metrics That Matter in Social
A recent Digiday article notes that “imperfect as they are,” clicks and impressions are nevertheless the benchmarks that most advertisers use to determine the effectiveness of their online display advertising efforts. When executed well, social media can deliver amazing engagement benefits for brands and enable them to create meaningful and measurable relationships with consumers.
The challenge is that social media advertising in general, and Facebook advertising in
particular, is far from an exact science. Facebook continues to launch new ad types,
and with each launch come new data points and insights. In this rapid evolution, brands need metrics that go beyond the old benchmarks to accurately gauge the effectiveness of their social campaigns.
Advertisers would be much better served focusing on new metrics. What percent of
each ad’s target audience has been exposed to the ad? How many times has each person seen it? These metrics not only align with campaign success, but they also gauge the likelihood of purchase. Advertisers should measure ads’ success with KPIs such as likes, shares, sales and other post-engagement events, as well as click-through rates (CTRs) and conversion rates.
With all this in mind, we introduce exposure rate, a new metric enabling brands to measure how much of an ad’s target audience it reaches and exposes to its message. It is calculated by dividing the number of unique impressions by the target audience. Combining exposure rate with frequency, a KPI determined by dividing total impressions by unique impressions, gives advertisers better insights into a campaign’s effectiveness than clicks and impressions do. And, as our research shows, advertisers can significantly improve CTRs and conversion rates with ads that have a high exposure rate and just the right amount of frequency.
High exposure rate alone does not guarantee success, however. The offer must be compelling, and the exposure rate must be balanced with frequency to determine the optimal levels of exposure. From our data, we found a significant drop-off in conversion rates when consumers see an ad more than seven times, which is likely the result of ad exhaustion or decay. In other words, when consumers ignore an ad more than seven times, they tend to keep on ignoring it.
Our research did not uncover a one-size-fits-all metrics solution, and that’s largely
because just as each brand is unique, so are its messages, ads and campaign goals. So, we encourage advertisers to test pricing models to determine which best fits the types of ads they run. As a general rule, advertisers should aim for ads that combine a high exposure rate with a frequency equal to or less than seven. To do so, we suggest they place cost-per-click bids above the Facebook Maximum Recommended Bid. Of the many data points that Facebook marketers can control, the Maximum Recommended Bid was the metric we found to be most correlated to results. Ads with CPCs greater than the Maximum Recommended Bid consistently delivered higher exposure rates and optimal frequency.
Advertisers should also take advantage of sponsored stories. Our research examined four ad types: posted ads, sponsored stories, Web ads and social ads. Of these, sponsored stories had by far the highest exposure rate and the lowest frequency, making them ideal for most campaigns. Advertisers should still use other ad formats for volume and exposure, however, because sponsored stories alone won’t deliver the scale needed for campaign success.
Using precise targeting is also crucial. When no interest targets are set, exposure rate is low due to the size of the available audience. When marketers add a broad category target, the exposure rate increases in response to a more targeted audience. But when a precise target is set, the exposure rate is at its highest. Precise interest targeting shrinks an ad’s target audience, and users get exposed to the ad more often.
Gauging the success of advertising has been a challenge for decades, and social
media makes it all the more confounding with its many new ways of measuring how
consumers engage with brands. Exposure rate and frequency, however, have emerged as the metrics most heavily correlated to campaign success. With that in mind, brands should develop a strong portfolio of owned assets to drive interaction on Facebook and consider the role each ad type can play within their campaigns. While post ads and sponsored stories have the highest response rates and lowest CPCs, Web ads and social ads are helpful for driving volume and off-Facebook activity.
Todd Herrold is senior director of product marketing at Kenshoo Social. Contact him at Todd.Herrold@Kenshoo.com.
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