NEWS23 January 2013

Facebook announces global launch of ROI measurement tool

North America Technology

GLOBAL — Facebook has launched its conversion measurement and optimisation system for direct response marketers globally, allowing advertisers to measure the ROI of their ads.

Facebook has been piloting the system in the US since November and says beta tests have shown that when conversion measurement is used with optimised CPM, ads reduced the cost per conversion by 40% when compared to CPC ads using the same budget. It works by counting relevant user actions, such as registrations and shopping cart checkouts, that are driven by people seeing an ads on Facebook.

A blog post by the social media giant explains: “This means that marketers who are interested in using Facebook ads and sponsored stories to drive specific actions on their websites can now use conversion measurement both to understand the ROI of their ad spend and to improve that ROI on future campaigns. This should be extremely valuable for marketers in e-commerce, retail, travel, financial services, and other direct-response industries that value actions taken on their websites.”

The company cites online retailer as an example of a firm who have been using the tool and was able to reduce its cost per new customer acquisition by 39% when it used conversion measurement and optimisation to serve ads to consumers deemed most likely to convert.

The Democratic Governors Association (DGA) also used conversion measurement with optimised CPM to deliver ads to users who were most likely to sign up for its mailing list. Mark Giangreco, digital director of the DGA, said: “We noticed a dramatic decrease in its cost per conversion – 85% lower than any other campaign the DGA had run online.”