Following the launch of a new measurement system for brand marketers at Advertising Week in New York, Facebook announced another new system tailored to direct response marketers on Friday.
The social network’s new service aims to improve conversion measurement by counting purchases and other actions that happen off its site after a user clicks on an ad. Facebook also created an algorithm that taps into its data on user behaviour to deliver ads to users who are most likely to convert.
David Baser, a San Francisco-based insights and measurement product manager at Facebook, explained the algorithm will learn if, for example, men are more likely to convert on a certain ad and then optimize delivery to include more males.
In testing the product with a handful of advertisers in the U.S., Facebook found the new optimized ads delivered a 40% lower cost per acquisition than identical cost-per-click ads. One retailer, Fab.com, saw a 39% reduction in cost-per-actions with the optimized service.
Baser said the service is a response to a demand for direct feedback marketers can use to tweak their campaigns in real time for the best results. “This has been a long-standing request from marketers,” Baser said. “We know all marketers really want to measure effectiveness and have the ability to directly measure sales. Understanding the ROI they get on their ads is essential.”
Though the system aims to please marketers eager to get more ROI data from Facebook, Baser said he thinks it will also improve user experience by showing users ads that they’re more likely to appreciate and act on.
“At the end of the day, what’s important to Facebook is that users have a positive experience and derive value from their ads,” he said. “When users see ads they care about and take action on, we know we’re doing a good job. That’s our bottom line, what we care most about.”