Today’s post is by Chris Zaharias, CRO at Triggit.

Since launching in alpha June 2012, Facebook’s ad exchange (FBX) has tantalized the online marketing community by offering the hope of bringing scale to retargeting and becoming the pound-for-pound direct response advertising ROI leader.

Starting in September of last year, advertisers have been able to retarget on all of Facebook’s right-hand side (RHS) inventory worldwide, and the one thing everyone involved has agreed on is that FBX has massive inventory, costs less, and performs better than any other display inventory source, and better than search in profitability.

newsfeed ad

Can you guess which of these ads draws the most clicks?

What’s held it back, though, is the limited size of RHS ads and the inability of many advertisers to deliver the dynamic ad experience that makes retargeting work so well elsewhere on the Web. With so little ad space to work with, there are only so many intent-laden clicks you can suss out, leaving many to wonder if retargeting on Facebook can actually be the massive conversion channel to give us at least some freedom from the AdWords Toll Booth.

Six weeks ago, Facebook made News Feed inventory available via FBX, and I’ll reduce the cacophony of News Feed retargeting data put out by Triggit and others to the following:

– 10-50X higher CTR than right-hand side FBX ads

– 50% lower eCPCs

– 1-2X more conversion volume

– No mobile News Feed inventory (for now?)

Now that you can retarget on Facebook, the place where more human purchasing power spends more time online than has ever in the history of mankind been assembled in one place, well, how do I put this?

Don’t screw it up.

New direct response marketing channels that can scale come along even less often than world peace, true love, or good presidents, and unfortunately they invariably trend to what startup blogger Andrew Chen calls The Law Of Shitty Clickthroughs, which matter-of-factly states that because “over time, all marketing strategies result in shitty clickthrough rates,” the true role of marketers “is to discover the next untapped marketing channel. In addition to doubling down on traditional forms of online advertising like banners, search, and email, it’s important to work hard to get to the next marketing channel while it’s uncontested.”

FBX is huge, it’s now in the News Feed, and you can’t screw it up, which is why if you’re still reading, you’re in luck. Running FBX News Feed campaigns for many of the early-adopting AdWords 5000 (kind of like the Fortune 5000 but for online ad spenders), we’ve found that dynamic News Feed ads have roughly 2.5X higher CTR and 2.75X higher conversion rates than static News Feed ads.

2.5 x 2.75 = 6.875. Round that up to 7 and you have the lucky number for those gravity-defying AdWords 5000 who will manage to not only escape The Law of Shitty Clickthroughs but also thrive in this temporarily uncontested new frontier.

You all know how thin the efficiency deltas are between advertisers in The AdWords Toll Booth. You know that to a certain extent there are only a couple FastTrak lanes that go to category leaders; if you can convert your way to the top of the page, great – if not, AdWords CTR for SEM’s right-hand side shrinks faster than above-the-fold organic real estate, keyword referrer visibility, or alternative engines’ market share.

To get some measure of freedom from the AdWords Toll Booth, then, you need to quickly extend your retargeting campaigns into the News Feed, and you have to have ads as dynamic as they possibly can be. That is what will make all the difference in the biggest, new direct response channel, and a channel that after this holiday season won’t ever again be so devoid of competition.

7 is your lucky number.

Chris Zaharias triggitChris Zaharias is Chief Revenue Officer at Triggit, a leading FBX company. An 18-year sales veteran, Chris brings a proven track record of building highly successful sales organizations in emerging markets. Most recently, he led Dapper’s global sales team and was VP of Search Sales at Omniture. Prior to Omniture, Chris was employee number two and held VP and SVP positions at Efficient Frontier.

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