Facebook announced a way to track ad performance on Tuesday that the company says is more accurate than the standard “click-through rate.”
Advertisers have traditionally tracked the success of an online ad campaign based on whether users click; generally, the more clicks an ad gets, the more successful it’s deemed.
But Facebook has argued for years that the click-through rate doesn’t tell the whole picture.
In fall 2012, Facebook’s VP of Measurement and Insights Brad Smallwood made the case at a conference in New York, pointing to a Nielsen study at the time showing a mere 0.07% correlation between high click-through rates and actual sales.
So the social network is trying to close the gap on its own.
Facebook tracks “conversion lift,” the sales boost generated by users who see an ad in their News Feeds and/or click. To do that, advertisers sign up for a free research study conducted by Facebook.
In each study, the social network creates two groups of Facebook users: a test group and a control group.
Put simply, Facebook displays a particular ad from the advertiser’s campaign in the test group’s News Feeds, while the control group doesn’t see that particular ad in their News Feeds.
Facebook monitors whether members of the test group buy products from the advertiser afterwards — either online or in-store — and compares those sales with those of the control group’s.
The difference is essentially what Facebook is calling a conversion lift. The social network argues this method is more accurate than click-through rates.
When Graze, a company that sells healthy snack boxes, had Facebook conduct a lift study, the results suggested that Graze’s older click-based performance system only tracked 72% of all snack box subscription sales.
Likewise, a study for Land of Nod indicated the children’s furniture business would see an online sales lift of 12% if the brand advertised a particular campaign on Facebook.
To be clear, while Facebook is measuring whether some users glimpse an ad, it isn’t using “eye tracking,” a technology so granular it can tell exactly where people are looking.
Google, for instance, used eye tracking in 2012 to test out how Google Search should look on tablets.
Even if Facebook’s way of tracking ad performance isn’t as high-tech, the benefits for the social network are clear.
If businesses can glean a better idea of how Facebook ads boosts their sales, the business is more likely to buy virtual ad space. That’s vital for Facebook, which derives the vast majority of revenues from ads.
And while ad revenues climbed 64% year-over-year in the most recent quarter to $2.96 billion, Facebook’s new tool may help fuel its bottom line even further.
Source: mashable.com