Efficient Frontier Insights

Sponsored Stories: Adding Efficient Scale to Facebook Campaigns

Our purchase decisions are strongly influenced by what our friends like and recommend. The research to prove this out is available in droves. The influence that friends have on our purchase decisions is one of the primary attraction points for Facebook’s Sponsored Story ads -- ads that derive content directly from friends’ interactions with a brand’s Facebook presence (page, app, place, domain). 

Facebook’s new Sponsored Story advertisements promise enhanced influence via the explicit endorsement of friends. But do they deliver? As we analyzed preliminary advertiser data from Sponsored Story ads, we felt validated by some of the results but were surprised by some others.

Sponsored Story ads vs. Conventional Object Ads

When we looked at the Sponsored Story and object ad data for a set of our clients over a period of four weeks, we found that Sponsored Story ads had a 39% lower CTR (click through rate) than object ads. At first glance, this is counterintuitive (and surprising). We expected users to respond with greater propensity to ads for brands that their friends liked. Hence, intuitively CTRs should be higher for sponsored story ads and not lower. A deeper look at the data unveiled the reasons for lower CTRs.

When we looked at unique CTRs, the Sponsored Story CTRs were 3.4 times that of object ads. In other words, CTRs on Sponsored Stories appear lower because the same users have been ad served many more times in the time period. This is further validated when we look at the average impressions per user. The Sponsored Story ads were ad served more than 10 times that of their object ad counterparts. 

Finally, and most importantly, we were able to drive a 22% lower Cost per Acquisition on Sponsored Story ads vs. object ads in this time period.

Sponsored Story vs. Object Ads: Key Metric Share

How much incremental volume can advertisers drive from Sponsored Story ads economically? As we optimized Facebook campaigns of our clients on both ad formats, we found that we could drive about 33% of conversions from Sponsored Story ads spending 28% of our total budget. What’s more, the impression share and click share were 49% and 25% respectively. Thus Sponsored Story ads are an economical way to gain impression share while at the same time an easy way for advertisers to scale their conversion volume by about 30%.

 
Should you advertise in the Sponsored Story format?

We are optimistic about Sponsored Story ads. Our enthusiasm is echoed by Facebook, which recently unveiled three new Sponsored Story formats, bringing the total to seven. Advertisers would be well advised to try Sponsored Story ads to leverage its three key benefits:

(1)   It’s an economical way to scale Facebook campaigns.

(2)   It’s an easy way of gaining impressions on the Facebook platform.

(3)   It’s a great way to leverage the explicit endorsement of a “like.”

Dr. Siddharth Shah
Sr. Director, Business Analytics

 

Taking the Lead in Social Media Marketing: Efficient Frontier Acquires Context Optional

Today is an exciting day for Efficient Frontier. We’ve just announced that we’ve acquired Context Optional, thereby creating the first comprehensive suite of solutions for social media marketing. Context Optional has quickly become a leader in enterprise social marketing solutions, maintaining and engaging audiences on behalf of major Fortune 500 companies. Joining forces with Context Optional was a natural next step for Efficient Frontier as we continue to become the leading global digital marketing company.

This acquisition will significantly expand our social media offerings and create the first unified solution for managing and optimizing Facebook fan acquisition through to fan retention and engagement. Marketers will also have a complete suite of online marketing solutions available to them across some of their most important social networks -- Facebook, Twitter and LinkedIn.  

By combining our complementary companies, we’ve created a seamless and unique level of efficiency for our clients -- something they’ve repeatedly asked for and we’re thrilled to be able to provide.

As a result of this acquisition, marketers will be able to:

• More efficiently target audiences based on social engagement insights and continually refine their Facebook application experiences to better match their audiences’ interests
• Deliver a seamless and measurable end user experience with consistent, integrated advertising and social marketing content
• Better track their campaigns through integrated analytics to receive a more complete view of performance

We believe that this acquisition will broaden Efficient Frontier’s offerings even further, expanding beyond our roots as a search engine marketing company. While SEM remains core to our business, our scope goes far beyond that, and includes holistically managing and optimizing display and social media advertising on behalf of our clients. We look forward to moving into the (pardon the pun) new frontier of digital marketing with Context Optional as an integral part of our future.

 

David Karnstedt
President and CEO

 

Facebook 101 – Images/Ads

In case you haven’t heard, you can advertise on Facebook now. Great! So how do you get started? Here are some things we have learned so far (through our own testing, as well as conversations with Facebook reps and engineers). It’s not an exact science yet, and I wouldn’t presume to define it as “best practices,” but it’s a good place to start. Enjoy!

Image Size
Our recommendation is to use a 110 X 80 or 85 X 62 image in your ads. Facebook accepts various sizes, but they are then resized down to the 110 X 80 size, and the image can become foggy or distorted. Therefore we recommend the 110 X 80 size so your image will appear crisp and clean.

Image Quality
There are three main recommendations in regards to which images to use. The first is to try not to use white space in the image. Since the background on Facebook is white, an image with a white background will blend into it, whereas an image with a dark background will be distinguished from the rest of the page. The second two recommendations go hand-in-hand: try to avoid using logos, and product action shots work best. Logos are great, but images where the user can click on the product action shot perform best. For example, if you are offering a travel deal, use a shot of a plane taking off or a picture of the beach. If you are selling laptops, show someone using one, instead of your logo. 

Ad Language
Facebook recommends the following as good drivers of click-through-rate (CTR):

• Ask questions in the ad
• Use third person
• Include a time prompt (now, today, limited time)
• Emphasize discounts & free offers

On the flip side, Facebook suggests avoiding the following pitfalls (so CTR is not diminished):

• Being too wordy
• Being too trendy in verbiage
• Using first person
• USING TOO MANY CAPS
• Percentage signs (it works better to include the actual dollar discount)

We hope these suggestions will help maximize your Facebook advertising campaigns. Happy Facebooking!

Karen Maciolek
Senior Account Manager/Master Social Media Strategizer

The Brand Value of Facebook

In 2010, Facebook topped the list of most visited websites in the U.S., and it is estimated that overall worldwide ad spending on Facebook will likely reach more than $4 billion this year and $5.74 billion by 2012. 

Because of the tremendous potential it holds for our clients, Efficient Frontier has been in the unique position of working up close and personal with Facebook engineers and account reps for the past several months to optimize performance and enhance our clients’ user experience. Thus, we bring you the first in a series of blogs about how to maximize Facebook advertising campaigns, supported by our data so far, and the insights gleaned from working closely with the social networking giant. 

How are Facebook advertising campaigns performing? How do they compare to search? Are they effective? Can we integrate them into other channels? In short, the answers are: the campaigns are performing well thus far; in comparison to search, it depends; yes, Facebook is an effective advertising tool and; yes, campaigns absolutely can and should be integrated.

How are Facebook advertising campaigns performing?

For our clients, Facebook is performing very well. Luckily for Efficient Frontier, our clients tend to be smart, savvy, and open to new strategies, especially the dozen or so forging ahead into the realm of Facebook advertising under Efficient Frontier’s management. Staying open to new strategies is important when advertising with Facebook since you need to be able to move away from the direct marketing results that take place on Google and MSN and into more of a branding mindset. This is not search, it’s Facebook.

Yeah, but how does it compare to search?

It depends. The data varies by industry and client right now and there is no set standard for performance. Facebook is not an advertising platform that has been around for 13 years as search has, so that’s okay. On the cost per click (CPC) side, the performance has varied on either side of the norm. We have seen CPCs on Facebook 3X cheaper than on Google, and with other clients, 1X more expensive. The consistent factor is that the CPCs on Facebook have been relatively competitive with those on Google. On the cost per lead (CPL) side, the performance favors Google because it converts better. But it should convert better because users are looking for you on Google, whereas on Facebook, they are not. Though the CPLs are consistently trending higher on Facebook than on Google, that number varies (between 1 X – 7X) depending on the client, though 3X – 4X tends to be the current average.

So is this effective?

Yes. There is a branding value to Facebook that can’t be overlooked. It’s the Friends of Connections (FOC) effect, or more simply, the friends of users who like your page. The effect is highlighted below:

If you only account for direct leads from Facebook, you are missing half the story. Looking at the above graph (which I made up for demonstration purposes), giving 100% credit to FOC leads brings a CPL of $50 down to $16.67, or giving only 50% credit to FOC leads, brings the CPL down to $25. Though we can target connections of a brand, the FOC metric on Facebook is currently not something you can track (although there are betas around the corner). So then, how do you measure what you can’t see? You don’t. But, you move towards the branding mindset to understand that the effect is there, and how it impacts your bottom line. And you leave a little leeway in your CPL goals for it, and look to a more holistic, cross-channel CPL.

Should we integrate this into other channels?

Of course you should. How? Efficient Frontier can help.

Was that too obvious? In all seriousness, being able to dissect and analyze data from SEM, SEO, display, and Facebook, and measure the value/impact they have on one another and your business is paramount right now. Being able to look at a forecast at various budget points and from there allocate costs across search, display, and Facebook, so that you are getting the best bang for your buck overall, is key. We’re doing it right now at Efficient Frontier, and it’s exciting!

Accurately measuring your brand value is just one of many important issues to consider in regards to Facebook advertising. Stay tuned for several more blogs on Facebook topics in the coming weeks.

Karen Maciolek
Senior Account Manager

The Next Chapter in the Display Wars -- Google vs. Yahoo!

If search was World War I, we are currently in the middle stages of World War II in display and a similar pattern is emerging. Yahoo! was once the market leader in search and today, Yahoo!’s search is powered by Bing.  As a result, Yahoo! has continued to lose search market share through 2010 (see figure 1).

Figure 1: EF Q3 State of the Market Report

In display, where content is king, initially Yahoo! had a clear head start over Google. It owns some of the most trafficked and highly sort after content on the Internet. It has a long history operating in the display marketplace and understanding advertisers’ mindsets as it relates to that channel. It even first acquired a stake in a dedicated display exchange with the Right Media acquisition a few months prior to Google’s acquisition of DoubleClick largely for a similar purpose.

However, despite all these advantages, in 2010, advertiser spend trends are following what happened in search. Google via the DoubleClick Ad Exchange (now largely merged with the Google Content network to form the Google Display Network), has provided advertisers, agencies and vendor partners alike with a far more straightforward advertising platform to attract ever more of the biddable (aka. Tier 2 or Non Premium) display ad dollars.

Google’s platform incorporating many of the successful features of their AdWords platform for search has in particular allowed marketers who have never operated in the display ecosystem to much more easily begin campaigns on the channel. This includes the large spending direct response marketers who previously limited themselves to channels like search, email and affiliate marketing.

In 2010, according to Efficient Frontier client trends in the U.S .(figure 2 below), Google’s AdX has attracted more advertiser dollars as the year has progressed. In Q4 thus far, this has represented about 70% of advertisers’ display media spend outlay. One point that should be noted is that Yahoo, which makes up a large portion of the RMX inventory, put less of their owned and operated properties’ inventory on the Exchange.

Figure 2: EF US Client Display Proportional Spend 2010

Looks like history is beginning to repeat itself.

Chris Jacob

Efficient Frontier Master Classes - Online Marketing Show

The dynamic nature of online marketing was never more prevalent than at the Marketing Week Live and Online Marketing Show events held in London last week.

The trade show floor was swarming with brands seeking to evolve their strategies to keep up with the fast moving marketplace.  The team at Efficient Frontier hosted two full days of master classes covering best practices, trends and future advancements in search marketing and beyond.

During the show, more than 300 visitors attended the Efficient Frontier Master Class Theatre and stopped by the booth to get tactical advice on how to increase their online performance marketing effectiveness.
 
For those of you who missed the show and would like to view the presentations, please email me and I will be happy to forward them on. Here is a summary of the master classes we presented.

Search Meet Display – Display Meet Search
Jonathan Beeston, European Client Services Director, Efficient Frontier
 
Case Study: A practical guide to tracking offline conversions effectively
Robert Levetsky, Senior Account Manager, Efficient Frontier
 
Case Study: How to distinguish new customers vs existing customers in your paid search campaigns
Jimmy Felstead, Account Manager, Efficient Frontier
Sheila Pen, Account Manager, Efficient Frontier
 
Top Tips for Mobile Search
Charlotte Rogers, UK Client Services Director
 
Getting the most out of Search Engine tools
Phil Dance, Client Development Manager
 
Inside PPC Campaign Management
Mark Nall, Business Development Director, Efficient Frontier

Merinda Peppard - Global Marketing Manager

Cannes Lions International Advertising Festival

Last week I was generously invited by Microsoft Advertising to attend the Cannes Lions International Advertising Festival.  Thousands of marketers and advertisers from across the globe meet in Cannes, France, to rub shoulders with the luminaries of the media and creative industries such as Sir Martin Sorrell , Mark Zuckerberg and Spike Jonze.  Yahoo even managed to get Hollywood superstar Ben Stiller to spend time talking about creativity.

As a major sponsor of the event, Microsoft featured heavily throughout the programme.  SVP of Marketing, Mich Mathews, contrasted the different approaches Microsoft takes for dominant brands, such as Windows 7, to challengers, such as Bing.  Of course, it wouldn’t be Microsoft if we didn’t get a sneak peek at some technology.  Windows Mobile 7 is Microsoft’s hope to gain ground on Apple, RIM and Android in the smart phone battle.  The launch of Xbox Kinect in November should bring gaming to a broader audience with its revolutionary no-controller, natural interface.  Both of these technologies will give marketers new ways to connect with their audiences.

With so much going on, it’s impossible for one person to follow everything at Cannes.  There was certainly a sense of optimism compared to last year and no doubt that technology increases to play an important part of creating and delivering effective advertising.

Click on the above image to see a short video live from Cannes with Microsoft's Mel Carson.

Jonathan Beeston | Client Services Director, Europe

Celebratory Cup Cakes at Efficient Frontier Innovation Summit – London

 
Last week, Efficient Frontier hosted its 2010 Innovation Summit in London.   It was a long anticipated event after the original event was postponed due to the Ash Cloud flight chaos.   The purpose of the event, which was attended by more than 70 clients and industry luminaries, was to engage with our UK clients in discussion on improving their digital marketing performance.

As the name of the event would imply, the theme of innovation was front and centre as speakers and delegates alike reflected on how the challenging economic times of the past few years has increased the pace of innovation in the digital marketing industry.
 
David Karnstedt, Efficient Frontier’s CEO kicked off proceedings by pointing out the large gap that still exists between online spend and consumption – some $50 billion per year -  representing  a significant opportunity. 

David was followed by Mark Howe, Country Sales Director, Google who presented Six Pervasive Trends in the Internet, covering timely themes such as Social, Local, Personal, Commerce, Mobile and Enterprise.
 
Our own European Client Services Director Jonathan Beeston then took the stage to moderate his Power Panel of brand advertisers. Special thanks goes to Mark Howe, Graham Donoghue, Managing Director of moneysupermarket.com, Nick Rudge, VP of Marketing at Holiday Cottages Group and Roland Mueller-Buchner Head of Marketing at TUI Germany for sharing their thoughts about the recent economic downturn, their experiences and what might be in store for the future of performance marketing.
 
After celebratory cup cakes marking Efficient Frontier London’s fourth birthday, Google’s product managers presented fascinating best practices on post click strategy for web conversions and wowed delegates with some seriously cool mobile innovation demonstrations, including voice search.
 
Efficient Frontier’s VP of Marketing and New Product Development, Justin Merickel was next up to present on the company’s progress in search innovation and expansion into new business areas. Stand-out innovations included product feeds for automating frequently performed campaign management tasks, as well as the ability to dynamically change numerical values in creatives without causing Google to consider the creative as new. The customised cross channel reporting templates were also a well discussed topic, as were the updates to the Efficient Frontier multi-channel algorithms.
 
One of the core themes to the day was Efficient Frontier’s move into the display exchange marketplace. After hearing from Laurent Cordier, Google’s EMEA Director for ad exchange and display partnerships, Justin talked about how Efficient Frontier has built the first integrated Search and Display management and optimisation platform by integrating with the largest ad exchanges, including Yahoo!’s Right Media and Google’s AdEx. He went on to cover real-time bidding capabilities and seamless reporting and attribution spanning search and display.
 
Signing off the day we were privileged to hear from special guest speaker Richard Eyre, Chairman of the IAB who presented his thoughts on innovation and change as the recession recedes.

If you would like a copy of any of the presentations from Efficient Frontier’s Client Innovation Summit, please get in contact via twitter @efrontier.

Merinda Peppard | Global Marketing Manager

Where were the head honchos at SMX Advanced London?

This week was a busy one for online marketers.  Google’s annual Zeitgeist attracted diverse speakers such as Archbishop Desmond Tutu, Howard Schultz and Sir Tim Berners-Lee who spoke to a crowd of Europe’s leading CEOs and CMOs.  Over in Munich performance marketers gathered for the a4u Affiliate Marketing Conference.  And on the doorstep of Efficient Frontier’s London office, SEM practitioners flocked from far and wide to SMX Advanced.

SMX London attracted an enormous number of industry folk from continental Europe and also the US to take part in the event.   No doubt this underlines that search conferences are just as valuable for networking as they are for learning.

Jonathan Beeston, Efficient Frontier’s search guru, spoke on two panels. His first session “PPC Logistics”, covered structuring accounts in a scalable fashion through a multitude of dimensions. Importantly to Jonathan’s presentation was the illustration of Efficient Frontier’s advanced campaign management features including;

• Dynamically creating keywords from product feeds
• Using feed columns as dynamic parameters for use in account structure creation, mapping
• Automatically creating ad variations tailored to the ad group them
• Integrating with Google Live Ads to dynamically update ads with NO impact on QS

His session, Making Sense of All the Numbers began with the principle that “Errors using inadequate data are much less than those using no data at all” and drew some controversial but substantiated conclusions;

• Don’t worry about click assists. They form a small part of all conversions.
• Do not use last event attribution models for sales funnels that are long and multi-point.
• Use multimetric regression models and multi-point attribution models to estimate the value of long tail keywords.

If you would like a copy of the Efficient Frontier presentations by Jonathan Beeston, please get in touch via twitter @efrontier. We now look ahead to SMX Advanced in Seattle where our own Dr. Siddharth Shah will present Targeting The Search Funnel on Day One and on the Mad Scientists of Paid Search Panel on Day Two.

Merinda Peppard, Global Marketing Manager

Efficient Frontier Wins TiE50 Award

I attended the TiEcon 2010 conference in Santa Clara, CA this past weekend where Efficient Frontier was honored as a winner of the TiE50 Award. Our co-founder, Anand Ranganathan, accepted the award which was given to the most enterprising companies worldwide in five sectors that are driving today’s economy: Internet, Software, Wireless, Cleantech, and BioSciences. We are honored that Efficient Frontier was chosen as a winner in the Internet Sector.

TiEcon is the world’s biggest conference for entrepreneurs, and the 2010  conference was packed with illuminating sessions on entrepreneurship, and state of the technology industry across different verticals. I felt privileged to meet and learn from business leaders such as Jeffrey Hayzlett, CMO and VP of Eastman Kodak Company, Dr. Anji Reddy, founder of Dr. Reddy's Laboratories, Reid Hoffman, Co-Founder & Executive Chairman of LinkedIn, and executives of companies such as Google, Facebook and Twitter.  There were exciting discussions about several different topics such as the future of the social web and mobile applications, innovation in services, how to raise funding and build an entrepreneurial venture, exit strategies for startups,  the new rules of marketing in the digital age, and even the inner workings of the human mind!

All in all, we were excited to participate in such a prestigious event and look forward to next year.

Sameera Inapakutika
Business Analyst