Thursday, February 21, 2013

AdRoll Warns Against Betting Too Heavily On Facebook’s Ad Exchange

The link to the full story is here

Retargeting company AdRoll has released some data today intended to suggest that advertisers shouldn’t rush too quickly to embrace Facebook Exchange (the ad retargeting service that the social network launched last year) — at least not at the expense of other forms of retargeting.

That’s probably what you’d expect to hear from a company with a profitable business in web retargeting (where ads are targeted based on your previous online behavior). However, AdRoll was also an early Facebook Exchange partner, and it says that it has run Exchange campaigns for more than 700 advertisers. Facebook said last month that there are more than 1,300 total advertisers on Exchange. So the data it’s releasing today is based on 468 campaigns from the past six months that ran simultaneously on Facebook and the web.

What did AdRoll find? Well, some of the costs for advertisers were much lower on Facebook Exchange campaigns — CPMs (cost per thousand impressions) were 82 percent lower, while CPCs (cost per clicks) were 70 percent lower. However, clickthrough rates were 40.18 percent lower on Facebook than on the Web, and Facebook Exchange ads also had an 86 percent higher cost per unique.

“There were some things that we expected, like the lower CPM and CPC on FBX, but other things were surprising,” said CEO Adam Berke in an email interview. “In particular, the fact that the cost per unique user is actually better in standard web retargeting. This basically tells us that you can reach highly engaged users very efficiently at a low CPC on Facebook, but you really need to tap into the rest of the web to reach as much of your valuable retargeting audience as possible.”

That ties into Berke’s larger message: That it might be “tempting to overweight FBX as percent of media spend” based on the initial data, but that temptation should be resisted. (For example, Triggit reported more consistently positive results on Facebook, and said that’s where it’s betting its business.) Backing that up is another data point from AdRoll that there was only an 8.3 percent overlap between the audiences reached by the Facebook campaigns and the web campaigns.

“No doubt that based on the performance of FBX, it’s a crucial component of a retargeting campaign,” Berke said. “However, you don’t want to forget about the rest of the web.”

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