A Search Marketer’s Guide to Facebook Optimization

Abbas Jaffer
June 27, 2011

Search-marketers extending their marketing expertise to Facebook will first learn that Search and Social are entirely different marketing channels. At first glance, the differences are blatantly obvious: keyword targeting versus demographic/ interest targeting, text creatives versus image creatives, landing pages versus fan pages, to name a few. Despite these differences, there are also similarities – the core values of online marketing carry over from Search to Social. In this post, I will focus on the optimization aspect of the two marketing channels.

How is Facebook (social) Optimization different than that of AdWords (search)?

According to Merriam-Webster, Optimization is defined by the procedure(s) used to make a system or design as effective or functional as possible -- contextual to online marketing, actions taken in ensuring the effectiveness of marketing campaigns quantified by metrics such as conversion volume, ROI, CTR, C/R, etc. I have broken these actions down into 3 categories:

1. Bid Optimization

Bid optimization refers to a mathematical approach of calculating the optimal CPC in order to maximize specific metrics. For this post, we will focus primarily on Revenue Maximization. This algorithm calculates a reserved bid price per click in order to maximize revenue at a target margin. The core calculation is determining the revenue per click, also referred to as the breakeven bid.

Breakeven bid = Revenue/Clicks, given a significant number of clicks.

For maximizing # of conversions at a CPA, substitute revenue with (conversions * CPA target). Thus, Breakeven bid = (conversions* CPA)/Clicks.

This is a common exercise in AdWords, carried out daily (or weekly for low volume terms) to ensure no money is left on the table. The same applies to Facebook ads – the only difference is the approach in attaining the previously mentioned value per click. In addition to a traditional conversion (sale, sign-up etc) that takes place at the resulting landing page, marketers can leverage Fan pages, where users can follow product updates via actions known as Likes. By appropriately determining the values of Fan page conversions + Landing Page conversion, marketers can effectively maximize their revenue,.

Facebook ads need to be bid optimized frequently by regularly keeping track of their revenue per click. This will ensure ROI/CPA targets are maintained.

2. Creative Optimization

Similar to Search, bid optimization is not enough to run an effective marketing campaign on Social. Creatives need to be relevant and fresh in order to capture audiences and sustain a good click-through rate or CTR. In Search, CTR determines keyword impression share – a declining CTR will result in less impressions being served per keyword. In AdWords, this would result in the decline of keyword Quality Score, which in turn would drop keyword position and raise first-page bid (threshold to appear on Google’s first page).

On Facebook, impressions served are a direct function of creative CTR. More specifically, the Effective CPM is the metric to determine impression share

Effective CPM = CPC * CTR * 1000. The higher the eCPM, the higher the impression-share.

When launching a creative, Facebook estimates a starting CTR based loosely on overall account CTR. New data allows a more updated eCPM to be populated. When the same ad reaches a specific demographic multiple times, the CTR is bound to decline. As a best practice, to ensure the freshness of the ad, rotate ads weekly or anytime the data suggests a declining CTR. This involves rotating headlines, creative texts and images to create novel, inviting ads. Third party tools such as Marin Enterprise TM allow marketers to schedule such creative permutation upload.

Similar to Search, running Creative testing on Facebook is a good idea – this allows the marketer to identify what works for their verticals. For example: Images are the biggest driver of CTR (what captures a specific demographic), length of creative (long versus short), exclamation marks, questions etc. Studies have shown that the shorter the ad, the higher the CTR (contrary to Search).

3. Structural Optimization

In Search, bid optimization and relevant creatives allows for an efficiently run campaign. Marketers always look for opportunities to grow existing campaigns -- only a finite amount of volume can come from a static set of keywords. Search marketers engage in structural optimization to take their marketing campaigns to the next level. These actions include adding new keywords using keyword discovery tools, scraping sites etc and/or refining existing keyword sets by regularly running the AdWords Raw Query report s that identify actual keyword phrases being searched. This report translates to action by identifying bad impressions and adding appropriate negatives or reallocating broad-matched traffic to cheaper exact-matched terms.

While not entirely homogeneous, a similar discipline is followed for Facebook structural optimization. Rather than identifying keywords, there are always new ‘targeting gems’ to be discovered. These may include new activities, books, movies, sports etc. Furthermore, running the Facebook Insight tool allows the search marketer to get a better understanding of the end user demographics. Based on the resulting performance across the target buckets, tweaks can be made around the targeting to do away with bad impressions, reallocating the budget to more effective targets.

Facebook marketers are always recommended to engage in Segmentation – breaking down their offer into separate ads each targeting a specific demographic. For example: Rather than targeting Male and Female between the ages of 18 and 51, generate 6 groups with identical creatives: M(18-30), M(31-43), M(44-55), F(18-30), F(31-43), F(44-55). The marketer is then able to dial up or down the bids on any of these segments based on ROI or C/R. Moreover, ads can be adjusted to boost CTR.

In Conclusion

It is safe to say that a search marketer is equipped with the tools necessary for successfully extending their trade skills to Social marketing.

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