3/26/13

Facebook lets marketers retarget shoppers in the news feed

That’s where 40% of the social network’s users spend their time, Facebook says.

Zak Stambor , Managing Editor

Facebook Inc. is bringing ads that retarget consumers based on their off-Facebook activity to its desktop users' news feeds. The social network today announced that it is running a small test in which it runs display ads generated from Facebook Exchange, its instant ad-bidding system, in the news feeds of desktop users. The ads had previously appeared on only the right side of Facebook.com.

Facebook is slowly rolling out the feature by only enabling a handful of retargeting firms, including TellApart, MediaMath and Nanigans, to place ads in the news feed and having the ads appear in only the news feeds of desktop users. However, Facebook says that it will later expand the test to more retargeting firms and advertisers.

Enabling advertisers to place retargeting ads in the news feed will make them more effective because they will be more noticeable to Facebook users, says Rebecca Lieb, an analyst at the business research and advisory firm Altimeter Group. “This will make these ads a lot more prominent,” she says. “I couldn’t swear to it, but I think if you used a heat map to show where users are looking on Facebook it would show that they look at the news feed, not the ads on the right-hand side.”

The news feed is where users spend 40% of their time on the social network, Facebook says.

Even when ads were limited to the right-hand side of the page, many advertisers reported success with Facebook Exchange. For instance, OnlineShoes.com, which works with TellApart, has said that its Facebook Exchange ads produce a user click-through rate of more than 15%. TellApart’s average user click-through rate on both the Facebook Exchange and DoubleClick Ad Exchange is 6.6%, it says.

Facebook says that enabling marketers to place Facebook Exchange ads into the news feed will not mean users will see more ads overall. Instead the new ads, which will be more relevant for users, will replace other ads in the news feed, Facebook says.

Advertisers might want to proceed cautiously if trying out the new service as Facebook has yet to implement rules to limit the number of times a consumer might see a retargeted ad in her feed, Lieb says. That isn’t unusual for retargeting networks, she says, but it means that advertisers might be wasting impressions. For instance, Lieb says she bought a couch two years ago and is still seeing retargeted ads based on couch browsing. “That’s wasted spending,” she says.

Facebook Exchange ads are designed to provide a measurable return on investment for advertisers—whether their goal is to drive a purchase or some other objective, such as driving site traffic. Giving that type of insight is important because many advertisers are still uncertain how to measure the success of their ads on the social network. Only 38.7% of advertisers say they believe their social media ads generate a clear return on investment, according to a survey in the Internet Retailer Social Media 300 guide. The guide gives a comprehensive analysis of 300 e-retailers’ social commerce strategies and ranks retailers’ social skills on the percentage of web site traffic they receive from social networks.

Topics:

Altimeter Group, click-through rate, DoubleClick Ad Exchange, e-commerce, Facebook, Facebook ad exchange, Facebook ads, MediaMath, Nanigans, news feed ads, OnlineShoes.com, Rebecca Lieb, social media, Social Media 300 guide, TellApart, web advertising

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