Show me the ROI: The Balancing Act of Organic and Paid Social
There is no doubt that social advertising is becoming more mainstream.
With nearly 1.8 billion social media users reported in 2014, marketers are taking notice of this global media powerhouse. Facebook will continue to dominate the field with its current base of 1 billion users.
According to eMarketer, Facebook’s platform is expected to continue to see ever more growth, with more than 1.5 billion users projected by 2018.
Organic Reach vs. Paid Advertising: Finding the Right Balance
With Facebook’s announcement that they are limiting the number of promotional page posts effective January 2015, many marketers are left wondering how they can address declining organic reach. The unfortunate reality is that paid advertising will play an increasingly important role if you want to extend your reach on Facebook.
Marketers will need to find the balance between paid and organic impressions. Because paying for reach is now in the mix, proving return on ad spend will be more important than ever.
According to Adobe’s Digital Index report for the third quarter of 2014, there was a 50 percent decline in organic impressions on Facebook from September 2013 to September 2014. At the same time, there was a 5 percent increase in paid impressions.
The frequency of Facebook posts also saw an increase across key verticals, including Media & Entertainment, Retail, and Financial Services.
When search engine optimization first began to be widely used in search marketing, metrics and return on investment (ROI) were not yet well-defined.
Paid search advertising is now a multibillion dollar per year industry, allowing brands to extend and expand their reach and scale. And it has certainly proven itself as a channel that delivers cost efficiencies.
As social has become more and more a paid channel, metrics and ROI have likewise not yet been generally well-defined. We see soft fuzzy metrics like followers, retweets, likes and shares.
So how do you demonstrate tangible value and ultimately measure brand awareness, loyalty, lead generation or conversions?
By using the same guidelines and focus in measuring success that you would with other marketing channels. It all goes back to simply aligning business goals and key performance indicators (KPIs) and using the right tools to manage, optimize, and measure success.
But how do you find out which ad content is working best for you, and who among your audience is engaging with your ad or buying it? You are limited by the fact that attribution and success can’t be fully measured by social in silo.
A typical user will experience multiple touch points on multiple channels and devices when engaging with a brand. Having that single source of truth is an important starting point to being able to answer some important questions:
How does my social ad campaign compare with display and search or even offline?
What role did social play in driving online sales?
Was it mainly an introducer, influencer or closer in the user journey?
To help solve this puzzle, there are a number of measurement tools available, which align user data with business objectives. For example:
- Nielsen for brand building
- Datalogix for in-store sales
- Mobile SDK partners for mobile app installs or engagement
- Web analytics for online sales
Levers That Influence Social ROI
Social networks such as Facebook, Twitter, and LinkedIn have a wealth of data about the users who see your ad. Ideally, you will want to be able to target specific groups of these users—by interests, ages, gender, location, education level, language, devices, company size, etc.
But audience targeting is only one lever that influences success in delivering social ROI.
Let’s look at some of the other levers that influence social ROI, and examine the best practices.
- Ad placement and ad format
Placements include news feeds, right-hand side, or log out experience. In addition, there are different types of ad formats on offer, including video, photo, link posts, and app installs, to name a few.
Best practices: On Facebook, shift placements to the news feeds to take advantage of primary real estate and to capture growing mobile inventory. After all, Facebook is a key leader in mobile display.
Our customers have seen real success here. If scale is an issue, it may make sense to complement news feed activity with right hand side ads.
- Audience targeting
When we look at audience targeting options, we see key social networks like Facebook and Twitter sitting on a goldmine of data—data you would typically find in a data management platform (DMP).
Of course, it’s worth noting the downside: This data is limited to a walled garden vs. a DMP, which offers portability of profile data across different channels and device types.
Nevertheless, leveraging such data in social has proven to reach more of the right people, and drive effective results.
Best practices: Create core audiences, composed of native targeting available on the social networks. These can include:
- Customized or tailored audiences. These leverage your first-party data with user profile data, such as emails and phone numbers, collected by Facebook or Twitter, respectively.
- Look-alike audiences. The social networks can target audiences that have not yet been to your site. They have unique ways to identify users that look a lot like your current customers.
Bid types have evolved tremendously over the years on Facebook. Remember the days when they only had CPC bidding? Facebook has since introduced other bid types, which will be suitable for different types of campaign objectives.
Best practices: It will be important to test and experiment different bid strategies that will reach the right audience and deliver on your specific campaign goals. Bid strategies include:
- CPM (cost per thousand impression)—for when you want to maximize the effective reach of your target audience. This metric aligns with display and TV, where reach and frequency are important metrics.
- CPC (cost per click)—focuses on driving high volume traffic to your website.
- CPA (cost per action)—encourages users to take action within your ad, by clicking a link or installing an app.
- oCPM (optimized CPM)—an increasingly popular bid type for direct response marketers, where you are paying for impressions and optimizing on conversions. You want to show your ads to those most likely to convert.
The above are good levers to test and experiment, on an ongoing basis. Key platforms like Facebook will continually evolve their platform to deliver the best experience for users and those of advertisers.
Finding Success in Social Advertising
For those who are already experimenting with the different levers of driving social success, continue to look at ways you can further enhance social performance.
For example, search data is a powerful source of intent data. And integrating this with your social advertising strategy can deliver powerful results.
Web analytics will also become increasingly important in closing the gap in addressing data sparsity.
Today, marketers often bid based on top-of-the-funnel metrics such as impressions and clicks, and optimize on bottom-of-the-funnel metrics such as online conversions for direct response.
The challenge is that on-site conversion rates are low—just a few percent for many. Introducing middle-of-the-funnel metrics such as additional site-side metrics can help push the right audiences down the funnel to convert.
Think about metrics as total time spent on first visit, pages viewed on the first visit, or bounce rate. The challenge is finding the right metric that correlates with your revenue signals, which will vary from vertical to vertical and with each individual brand.
Our customers have found success in social, even in the ever-growing climate of declining organic reach, through paid ads.
It’s true that the feeling of paying for something you used to largely get for free doesn’t sit well with most.
But if marketers adopt the appropriate levers of social to achieve a clear business objective, have a dynamic test, and learn and iterate culture, then with the right tools in place to measure success, you may well find that social can be one of your most cost-efficient paid channels.
For more information on how some of our customers have delivered success on social using paid advertising, please see the on-demand webinar “Show Me the ROI,” which was held here on December 8, 2014.