So I'm scrolling through the news this morning, and you know what I saw? News of another Facebook feature test! And this one's definitely an interesting one -- an ad ROI tracking tool.
They will begin rolling the tool out on Friday, and it will allow advertisers to track the actions of Facebook users post-click . Pretty groovy, eh? This tool will help advertisers track conversions to their external pages, and allow all businesses to track their success on Facebook.
Let's dive into some more detail on what the tool is, how it'll work, and why marketers might want to get excited about it.
Facebook's ROI Tracking Tool
Like we said, the tracking tool will allow marketers to see how their Facebook ads perform post-click, tracking the actions of users after they convert on the ad and go to the landing page to which your ad directs them. In order for this ROI tracking tool to work, all advertisers will need to do is place code on pages on their website that users access after making a conversion. These pages might include the check out page for an ecommerce business, or a thank-you page after filling out a form on a landing page. Once a Facebook user views this page, the Facebook ads platform is alerted that someone who viewed and clicked on a Facebook ad has converted off-site on the advertiser's page. Even better, advertisers will then have the option to target ads at the segments who have responded positively to certain ads in the past.
Along with this tool, the optimized CPM (cost per thousand impressions) bidding tool -- which was released earlier this year -- helps advertisers optimize their campaigns for better results. The current CPM tool allows advertisers to tell Facebook their goal, and Facebook will adjust the CPM of ads based on the current demand. Similar to Google AdWords, the CPM on Facebook varies throughout the day; advertisers who use the optimized CPM tool don't need to worry about constantly changing the pricing, because Facebook does it for them.
This tool is currently in beta , being tested by various advertisers. One online retailer, Fab.com, has already reduced ad costs by 39% using this tool to optimize their advertising campaigns. Once we test out this tool, we will let you know our results, too!
Why Marketers Should Love Facebook's ROI Tool
Tracking the success of marketing campaigns is critical -- you know that. By bringing a tracking tool in-house, Facebook will allow advertisers to use the Facebook platform for all aspects of the campaign, instead of relying on a third party company to track success and ROI. By tracking the number of conversions -- including sales, leads, or downloads -- advertisers will be able to measure if their Facebook campaigns are working, and if not, what they can be doing to optimize their campaigns for better results.
The conversion tool when used along with the CPM tool will be beneficial to advertisers who are not able to see or identify the return on investment of their Facebook ads. Advertisers are often disappointed with Facebook ads because they can't track if they've been successful past the metrics Facebook currently gives, like mere clicks and impressions. This new tool in Facebook will give people an easy way to track conversions in the same platform as the ads.
This tool will be most beneficial to "direct marketers" who are looking for an increase in immediate sales, something Facebook has struggled to monetize since thier IPO. While the tool won't provide identifying information about a user, it will provide information long after someone views an ad -- whether it's hours or weeks. That kind of information helps advertisers understand how much of a role their Facebook ad played in a customer conversion.
The best part is that this all seems like perfect timing for the holiday shopping season! Coincidence? Maybe not ;-)
Do you think this tool will help you better prove (or disprove) the ROI of your Facebook ads?