From Likes to BuysJune 10, 2012 | By Fluent
Since Facebook’s recent IPO, all eyes and ears are focused on one thing – how much are they really worth? 85% of Facebook’s $3.71B in annual revenue is derived from advertising sales, and with the increasing skepticism around Facebook’s ability to drive purchases, the company is more adamant than ever to keep sales up. One approach they’ve taken is Sponsored Stories, which, according to Marin Software, improved click-through-rates by 20%, CPM by 51% and CPC by 26% from April 2011 to March 2012.
Sponsored Stories for Mobile
Most recently, Facebook has begun monetizing its mobile app (a huge step for them as adult US smartphone users spend an average of 15 minutes per day on Facebook mobile) by introducing Sponsored Stories for mobile that can be purchased by advertisers as a separate buy. And according to a Webtrends 2010 estimate, mobile ads on Facebook have so far outperformed desktop ads, with click-through-rates of 1% or higher compared to 0.05%, most likely due to their novelty and their ability to monopolize screen space on mobile devices without the competing for real estate with other ads.
Currently, demand for mobile Sponsored Stories is highest among mobile app and game developers looking to drive people to the App Store or Google Play; however, Facebook is currently testing location-based mobile ads using real-time data for targeting, and large brands such as Heineken and Hugo Boss have started making larger mobile buys on Facebook.
Converting Earned Media to Purchases
If Facebook continues on its current path, Marin predicts that by the end of 2012, advertisers will allocate 50% of their budgets to social ad formats such as Sponsored Stories. However, advertisers know that regardless of how big they build their fan base on Facebook, their efforts are meaningless if earned media doesn’t convert to actual purchases.
Fully aware of this, Facebook is making a large effort to show that the two do in fact correlate. They recently published a three part report with comScore called The Power of Like. As part of the study, they investigated the impact of earned media exposure on online and in-store purchasing at Target, and results indicated an undeniable lift in purchasing among both Fans and Friends of Fans of the brand. Fans were 19% more likely to purchase after being exposed to earned media, and Friends of Fans were 27% more likely to purchase.
How Fluent Can Help
Performance marketing companies like Fluent also play a large role in engaging customers through social channels. We recently created a social lead generation campaign for Pepsi by leveraging the Facebook Connect API to run across their performance network of online, mobile web and in-app placements. The use of that API pulled in users’ social network adding communal value to a previously standard lead generation initiative and making them 80% more likely to engage with the ad.