Tests show Facebook performing as an acquisition channel

Tests by performance marketing company, Efficient Frontier, show that Facebook advertising is starting to show real sales results for advertisers.

Efficient Frontier is running a series of tests to measure the performance of Facebook advertising against search advertising. Initial results show that Facebook performs best for brands looking to achieve specific sales conversion targets from their advertising campaigns (as opposed to branding goals), and specifically for higher-spending advertisers who combine Facebook advertising with search.

Its tests show that, for brand advertisers spending more than £2000 on performance marketing advertising (search and display), Facebook advertising gives a lower cost-per-acquisition (CPA) rate than search, becoming a more effective channel to meet CPA goals. However, audience reach in Facebook is lower than search, so the optimum spend ration between the two channels was, on average, between 60 and 75 percent spend on Facebook and between 40 and 25 percent on search.

For brand advertisers spending less - around the £1000 mark - the CPA for Facebook campaigns is marginally lower than it is for search, and so the largest proportion of budget should continue to be spent on search.

Efficient Frontier analysed the spend distribution across Facebook and search advertising, measuring the performance of campaigns on each channel alongside each other. Simulation models show the performance of each campaign at various spend levels, based on the models created by Efficient Frontier’s bidding technology. This examines how each campaign measures up against its original objective (such as gaining the most effective CPA rates, as in these test cases).

Efficient Frontier’s European client services director, Jonathan Beeston, says: “These are initial tests, and we need to do more to establish whether they will be reflected across all brands. But they do show that for the first time, Facebook is starting to perform as an acquisition or sales channel. Facebook is starting to be a real challenger in performance marketing.”

The tests were done by:

· Running two simultaneous campaigns across search and Facebook for test clients. Both campaigns were designed to work together, with similar messages and content (built to the specifications of each test client)

· Measuring the impact of each channel on conversions (focusing on sales and registrations)

· Building and optimising the campaigns on both channels, using Efficient Frontier’s Ad Builder, including testing different versions of an ad to different demographic or interest groups on Facebook

· Using automated bidding technology to assess the performance of each campaign (including the performance of each target audience group on Facebook) and bidding an appropriate amount for each ad

For more information on Efficient Frontier’s Facebook and search campaigns, see www.efrontier.com; or follow Efficient Frontier on Twitter - http://twitter.com/efrontier  or Facebook - http://facebook.com/efrontier.

 

About Efficient Frontier

Efficient Frontier is a leader in online performance marketing managing search marketing, display and social media campaigns for advertisers and agencies around the world. Efficient Frontier currently manages more than $1 billion in annual marketing spend on behalf of their clients globally. Founded in 2002, Efficient Frontier pioneered the application of modern portfolio theory for search engine marketing and today combines its core predictive modelling algorithms and bidding technology with comprehensive strategic and tactical value-added services.  The largest and most sophisticated advertisers and agencies partner with Efficient Frontier to achieve and sustain optimal campaign performance and growth in highly complex and competitive marketplaces. The company is headquartered in Sunnyvale, California, with offices in New York, the United Kingdom, France, Germany, and India, and technology licensing partnerships in Japan, Hong Kong and Australia. Efficient Frontier is a privately held company with funding from Redpoint Ventures and Cambrian Ventures.  For more information, please visit efrontier.com and subscribe to the Efficient Frontier blog at blog.efrontier.com.

 

If you are a journalist or blogger and would like more information on Efficient Frontier, please contact:

Kate Hartley, Carrot Communications

Tel: 0771 406 5233

Email: .(JavaScript must be enabled to view this email address)

Twitter: @katehartley