Last week, I moderated a panel at ad:space
(an ad:tech satellite conference centered on performance advertising)
focused on how performance advertisers can be successful in social
networks. The discussion from panelists Ro Choy (Chief Revenue Officer
at Rock You, a Lightspeed portfolio company), Seth Goldstein (CEO of Social Media) and Tim Kendall (Director of Monetization at Facebook) was very enlightening.
Comscore recently noted that performance advertising adopts online media faster than brand advertising
because it is easier to measure results over short time periods. The
knock on social media ad inventory has been that CTRs are low. This is
less relevant for performance advertisers who only pay on the click or
the action anyway. We heard about some terrific success stories for
performance advertisers in social media on the panel who are seeing ROI
on their ad spend comparable to Google.
The panelists called out two particular examples of advertisers
seeing real scale results. Seth highlighted mobile services as a
category that has seen terrific success in customer acquisition in
social networks (if you’ve seen the “crush” or “IQ test” ads on
Facebook or Myspace you’ll know what he is referring to) and is
generating hundred of millions in incremental revenue from this
channel. Ro mentioned that Rockyou generated 1.5m new users for an
online game advertiser in just one month. Although not represented on
the panel, MySpace is selling hundred of millions of dollars worth of
performance advertising per year. These are impressive numbers.
The panelists highlighted one key difference between social media
performance advertising and Google AdSense style performance
advertising. AdSense uses contextual targeting to improve performance.
Social media uses demographic, behavioral and social targeting to
improve performance.
In the open web much demographic targeting is inferred from
behavior. For example a user who visits ESPN.com, Nascar.com and
NFL.com might be inferred to be male. This is often, but not always,
correct. Social networks take a different approach. On their profile
pages, users declare many key aspects of their demographics, including
age, gender and location, the three key elements for targeting.
Targeting based on these self declared demographic elements can be very
effective for performance advertisers within social media. Ro related
the example of Rachel’s yoghurt, an advertiser that targeted coupons to
women living within 5 miles of Whole Foods in 10 cities through Rock
You. The campaign delivered 0.20% CTRs to the Rachel’s Yoghurt site,
with a 35% coupon download rate. These are impressive numbers, and led
the advertiser to renew the campaign for an additional 12 weeks. Doing
such a high level of targeting can result in relatively small numbers
of impressions, but this is one area in which social media excels.
Because of the high reach and high number of pageviews, social media
sites can still deliver sizable campaigns to even highly targeted
campaigns.
Behavioral targeting also benefits from the scale of social networks
as even tightly targeted campaigns can still deliver meaningful reach.
Retargeting works well, as it does for the open web, but once again
this can be combined with declared interests on user profile pages. Tim
described a very detailed campaign that a politician, Patrick Mara, ran
on Facebook to defeat a 16-year incumbent in a DC city council primary
last year. Mara was in favor of allowing gay marriage, so he pushed
information about his stance out to DC Facebook users who’d listed
their sexual orientation as gay. If Facebookers had kids, he targeted
them with ads about the school system, and if they were Republicans, he
hit them with information about taxes, school vouchers and similar
conservative favorites. Very clever! And apparently quite cheap for the
results — Patrick found Facebook advertising to be a great way to
recruit volunteers. Future local campaigns, take notice.
Social targeting is one area that is unique to social networks.
Integrating knowledge of social ties into the creative of the ad can
really lift response rates. Seth described one campaign that Social
Media ran for Live Nation, the concert promoter. Seth himself saw an ad
with the name and picture of a friend of his saying “Dan is going to
see Cold Play at Shoreline this summer. Do you want to go with him?”.
This is a great example of an ad that takes advantage of knowledge of
behavior (Dan is going to see Coldplay), location (the concert is near
where Seth is) and friendship ties (Dan is a friend of Seths) to build
a very compelling piece of creative.
The theme of customizing ad creative for social media came up
repeatedly during the panel. While good results could come from running
standard web creative and using the targeting that social media
provides, the best results came from building campaigns that appeal to
behaviors that are native to social networks. Often this had to do with
identifying friends (names and pictures) in the creative, as well as
integrating a compelling social call to action. Ro described a campaign
that Rockyou ran for Pentel Pens that asked users to enter “their
smoothest (pickup) line” into a sweepstake. The rich media with video
campaign led to real engagement with a 22.5% engagement rate (2x av
performance for the category), a 0.6% CTR and 60% of users watching at
least half of the video. The campaign drive over a million entries into
the contest and worked well to drive high engagement with an “unsexy”
CPG brand because it was well crafted for a social environment.
It is clear that social networks provide a real opportunity for
performance advertisers. Smart targeting allows the first level of
performance lift, and custom campaigns and creative that are “native”
to social media can deliver even further lift. I think we’ll see much
more adoption of this channel by performance advertisers over the
coming months.
(For more from Jeremy, visit his blog)
(Image source: optimizeandprophesize.com)
