retargeting on facebook

Retargeting on Facebook by the NumbersThe Analysis of Retargeting in the Center of the Social WebJuly 2014

Retargeting on Facebook The Analysis of Retargeting in the Center of the Social Web

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Executive summaryOver the past two years, advertisers have rapidly adopted retargeting on Facebook to drive key metrics like conversions, app downloads, and lead generation. Recognizing how valuable it’s been for advertisers, Facebook expanded their product line and now offers marketers two ways to retarget their website audiences on Facebook: through the Facebook Exchange (FBX) and through Custom Audiences from your Website (WCA).

At AdRoll, the introduction of WCA meant we could give our customers access to Facebook’s mobile inventory. Advertisers who use Facebook on both desktop and mobile for retargeting are better equipped than ever to reach customers where they spend their time online, whether that means smartphones, tablets, desktops, or a combination of all three.

In order to produce the most comprehensive research currently available, we looked at over 800 million impressions from 215 AdRoll advertisers running retargeting campaigns on three channels: FBX (on desktop), WCA (on mobile), and web sources other than Facebook. Our findings show that, by continuing to release high-performance targeted ad products, Facebook has become a proven direct response channel:

Our study demonstrated that the CPM cost of News Feed ad impressions on mobile is 57% lower than

News Feed impressions on desktop, and mobile ads generate a 10% higher CTR. This results in a 61% lower

CPC for ads in the News Feed on mobile compared to the News Feed on desktop.

As a complementary channel, mobile adds an average of 3.8% incremental conversions to an existing

retargeting mix of web and News Feed on desktop.

Much like News Feed on desktop, mobile is ideal for driving direct response through promotions and

content marketing. By adding mobile to an existing campaign mix of web retargeting and News Feed ads

on desktop, advertisers see on average 29% more clicks.

In our three-month study, mobile grew from 0% of impressions on the News Feed to 6.51%. In the sample

we studied, mobile ads through WCA now account for 8.25% of all News Feed clicks.

By layering News Feed campaigns on desktop onto web retargeting, advertisers serve on average 5.7%

more impressions and get an impressive 53% more clicks.

The apparel, beauty, and technology industries have had the quickest adoption of mobile ad sizes, while

media and entertainment serve the highest-performing mobile campaigns.


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Retargeting lets advertisers selectively reach out to consumers who have already visited a company’s site or mobile app with messaging tailored to the type of intent they’ve shown and their interaction with the site. Personalized advertising keeps a company top of mind for the right customers, bringing them back for critical repeat visits that add up to a conversion. According to a recent AdRoll customer survey, 76% of marketers planned to increase their retargeting budget in 2014, bringing it in line with search engine marketing and email marketing as a must-have tactic for reaching and converting potential customers.

What is retargeting?

“AdRoll’s campaign performance of 13.4x ROI is impressive. They’ve helped

us attract new customers that weren’t aware of our brands or our hotels,

while improving our conversion rate and lowering our costs per booking.”

—Casey Ueberroth, Senior Vice President of Marketing, Preferred Hotel Group

Customer

Your Sitewww.yoursite.com www.relatedsite.comYour AD

Buy Now!

A customer comesto your site.

The shop but leavebefore purchasing.

AdRoll displays your ads on sites they visit later,bringing them back and keeping your brand top of mind.

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News FeedFacebook’s News Feed supplies some of the most valuable ad real estate online. By advertising in the News Feed, marketers have the best possible chance of reaching over a billion monthly active Facebook users. These highly engaging native ads combine a large image with social elements (like, comment, and share). And because a single insertion persists in the user’s News Feed, each placed ad gives an advertiser multiple opportunities to reach the customer.

Facebook at a glance

Reach 1.28 billion monthly active users

Mobile reach 1.01 billion monthly active users

Desktop ad formats News Feed and Right-Hand Column

Mobile ad formats Page Post Link and Mobile App Install

Retargeting on Facebook

Message: 500 characters, including spaces

Title: 25 characters, including spaces

Image: 600x315px (displayed as 400x209px)

Body: 90 characters, including spaces

Social elements: like, comment, share

“After a day of running ads on the Facebook News Feed with AdRoll, we saw a 600% increase in conversions.”

—Gokce Cozen, Marketing Manager, Udemy

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Right-Hand Column (RHC)Facebook’s Right-Hand Column ads give advertisers more chances to reach the massive Facebook audience. Though the ad unit itself is smaller and doesn’t have all the native social functions of its larger News Feed cousin, its prominent placement, lower cost, and more readily available inventory make it an effective tactic for driving results.

Title: 25 characters, including spaces

Image: 600x315px (displayed as 244x133px)

Body: 90 characters, including spaces

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What is WCA?Facebook’s WCA lets advertisers match visitors who came to a website with the Facebook audience in order to retarget them with personalized ads in the News Feed on mobile, as well as desktop. Since Facebook users are just as likely to check in from a phone, a tablet, or a desktop, WCA represents an early opportunity for cross-device retargeting.

WCA also lets advertisers layer additional Facebook demographics, like age and relationship status, onto their campaigns. This gives advertisers more options than ever for refining high-performance, highly relevant retargeting campaigns.

WCA ad formatsThrough WCA, advertisers have access to inventory specifically built to achieve mobile goals:

Page Post Link ads help drive traffic to an advertiser’s mobile-optimized site by targeting desktop site visitors when they browse the Facebook News Feed from a phone or tablet.

Mobile App Install ads improve mobile app adoption with ads that send users to the Apple App Store or Google Play where they can install the app with a single click.

Facebook’s Custom Audiences from your Website (WCA)

Mobile App Install ad Page Post Link ad


WCA vs. Facebook Exchange (FBX)As retargeting on Facebook continues to evolve, the advertisers who get the best results are the ones who understand the most effective ways to take advantage of Facebook inventory. Here are some of the key differences between FBX and WCA:

For more information, visit

http://blog.adroll.com/deciphering-retargeting-on-facebook-fbx-wca

“At Jane, we’ve always been very active on social media and had a strong focus on

driving revenue in our social media marketing. After partnering with AdRoll to

leverage Facebook, we saw an ROI on our click-through conversions of over 200%.”

—JD Stice, Chief Operations Officer, Jane

Desktop News Feed and Right-Hand Column Desktop and mobile

User-level real-time bidding optimized to any metric:

CPC, CPA, reach, etc.

RTB-level segmentation based on products viewed, time spent on site, pages

viewed, etc.

URL-based segmentation

Proprietary Facebook bidding algorithms:

CPM, CPC, and oCPM (for larger segments)

X

X

X

X

X

FBX WCA

Bidding

Segmentation

Inventory

Dynamic creative

Ability to layer on additional FB data

Lookalike retargeting

Cross-device conversion tracking

Granular conversion tracking

To see how mobile retargeting on Facebook performs in relation to News

Feed ads on desktop and web retargeting, we looked at over 800 million

impressions from 215 AdRoll advertisers. We selected these advertisers

because they were running retargeting campaigns on Facebook on

desktop and mobile, and web sources other than Facebook from March to

July, 2014. The advertisers included in this analysis spanned all industries

and had budgets ranging from $20/month to over $5,000/month.

Click-through rates (CTR)

While we were impressed with News Feed ad performance on desktop, we

found that mobile had even higher average click-through rates. Mobile ads,

within the engaging Facebook app, are driving the highest response rates

we’ve seen yet.

News Feed campaigns on mobile and desktop show higher CTRs than web

retargeting, contributing to more efficient costs per click (CPC).

Cost per click (CPC)

Given the higher social engagement of News Feed ads, it’s no surprise

that both desktop and mobile campaigns performed strongly compared to

display inventory sources on the web.

Mobile ad sizes, with their larger display relative to screen size and

generally higher engagement than desktop, give advertisers a

cost-effective channel for reaching consumers.

“Our app installs

definitelyimproved

once we turned

on AdRoll’s mobile

retargeting product.

We’ve seen a 160%

spike in app installs

since starting.”— Casey Kohner, Web Product Manager, Trek

www.adroll.com 8


Key performance metrics

CTR over web retargeting




News Feed on desktop

News Feed on desktop

News Feed on mobile

News Feed on mobile

8.1x

24%

9.1x

70%


Adding News Feed on desktop: 5.7% more impressions, 53% more clicks, 58% more conversions

Adding News Feed on mobile: 4% more impressions, 29% more clicks, 15% more conversions

News Feed is 60% of total Facebook advertising spend, and mobile ads generate 2x the clicks of desktop.

News Feed costs: desktop vs. mobile

Demand hasn’t yet fully ramped up for the newly available mobile ad sizes.

Perhaps because advertisers are not yet bidding as aggressively for these

units, we noticed a 57% drop in CPM for mobile compared to desktop.

Incremental reach and performance

News Feed inventory introduced advertisers to a new way to retarget

customers. By layering News Feed on desktop onto web retargeting

campaigns, advertisers in our study generally saw 5.7% more impressions,

53% more clicks, and 58% more click-through conversions.

Adding Facebook results in 73% increase in conversion.

Impressions ConversionsClicks

News Feed on mobile is proving to be a strong direct-response channel.

News Feed accounted for 60% of the Facebook advertising spend in our

study, with mobile ads generating twice the clicks of ads on desktop.

These strong results may be the result of the improved ratio of ad unit

to screen size: the highly visible, highly engaging mobile ad unit is ideal

for driving performance-based goals.

We wondered: since the News Feed audience is the same on

mobile and desktop, would mobile campaigns still drive additional

traffic and conversions? As our advertisers launched retargeting

campaigns on mobile, we confirmed that it does. When adding

mobile ad sizes, advertisers saw approximately 4% more

impressions, 29% more clicks, and a 15% increase in

conversions—and that’s from early test budgets. As budgets grow,

we expect incremental impressions and conversions to increase.

“News Feed ad impressions cost 57% less on mobile than on desktop”

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AdRoll inventory analysis

Mobile: 6.51% of News Feed insertions, but 8.25% of clicks

News Feed insertions News Feed clicksNews Feed insertions

Based on the success of our mobile pilot program, we rolled out mobile ad sizes on Facebook across our entire customer base. The apparel, beauty, and technology industries have been the quickest adopters; meanwhile, businesses in the media and entertainment industry have run the highest-performing mobile campaigns.

Mobile is still growing, and it’s already off to a very promising start—as we’ve seen with the advertisers included in this analysis. Although only 6.51% of ad insertions in the News Feed came from mobile, they have driven an impressive 8.25% of clicks across all advertiser News Feed campaigns.

News Feed clicks

6.51%6.51%

93.49%93.49%

8.25%8.25%

91.75%91.75%

FBXFBX WCAWCA FBXFBX WCAWCA

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We’ve seen growth in retargeting everywhere, but the steady increase of retargeting on the web has been surpassed by an even more rapid adoption of targeted advertising on Facebook. Though still a comparatively small percentage of total clicks, the introduction of mobile ad sizes will only increase advertisers’ efficacy and reach.

The key takeaway for marketers is that most successful advertisers take advantage of all available options for

retargeting, maintaining cross-device reach. Although mobile is still a growing channel, retargeting across

desktop and mobile through Facebook is becoming part of every always-on marketing strategy.

Clicks by channel (month over month)

Facebook

Web

Conclusion

July-

12

Aug-12

Sep-12

Oct-12

Nov-12

Dec-12

Jan-1

3

Feb-13

Mar-1

3

Apr-13

May-1

3

Jun-1

3

Jul-1

3

Aug-13

Sep-13

Oct-13

Nov-13

Dec-13

Jan-1

4

Feb-14

Mar-1

4

Apr-14

May-1

4

Jun-1

4


About the authors

Kexin Chen

Associate Marketing Manager, AdRoll

With a background in customer advocacy and international communication, Kexin manages integrated marketing for AdRoll’s global expansion. She pioneered AdRoll’s customer marketing program, Power Brands, and today drives our advocate marketing programs.

Priya Gopalakrishnan

Solutions Analyst, AdRoll

Priya is a data analyst on the Solutions team, conducting in-depth reporting and analysis around our full stack of products. She uses her background in business intelligence, big data, and data visualization to illuminate industry trends in AdRoll’s campaign and customer data.

About AdRoll AdRoll is the world’s largest retargeting platform, with over 15,000 active advertisers worldwide and a 97% customer retention rate. AdRoll provides unmatched transparency and reach across the largest display inventory sources, including Google AdX, Twitter, and Facebook. For more information, please visit http://www.adroll.com.

Facebook® is a registered trademark of Facebook Inc.

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