NEWS19 November 2012

Facebook unveils new ROI measurement tool for marketers

North America Technology

US — Facebook is announcing a new self-service conversion system for direct response marketers that aims to help them more effectively measure their ad campaign ROI and optimise future campaigns for even greater returns.

The conversion measurement feature is available in Facebook’s Ads Manager, and scrutinises both off-Facebook actions generated from ads – such as e-commerce site check-outs and registrations – and optimised CPM bidding to show ads to people more likely to convert on a business’ site.

Marketers will be able to create a unique snippet of code that they can add to whatever page on their website where they want to measure conversions. When those pages load for a person who has previously clicked on or seen a Facebook ad, the additional code sends a signal to Facebook and the conversion gets counted in the Ads Manager.

Marketers can then see how many people clicked on or viewed their ad and took a desired action in Ads Manager. This can then be used to consider whether or not to use optimised CPM bidding, and the Facebook system will show ads to the people who are most likely to convert.

Facebook says the information is based on standard demographic data and historical click and actions data such as page likes and app installs. No personal user information is shared with marketers, just conversion counts. The aim is to help marketers better understand how their ad campaigns are driving action and how to make their future campaigns even more effective.

The full global launch of this feature will happen at the end of this month. In initial testing of the products, by brands such as, results indicated that ads purchased through optimised CPM had lower cost per action (CPA) than ads purchased using CPC bidding. Facebook says that on average, optimised CPM ads delivered about 40% lower cost per actions than identical CPC ads.

A Facebook spokesperson said: “Measuring ad effectiveness is crucial for all types of marketers, and the goal of this highly requested feature is to help direct response marketers better understand how their ads are doing and how to make their campaigns work even more effectively.”