Facebook Suggested Bid Spiral Effect Part II

by redembermarketing on July 10th, 2009

DON’T CHASE YOUR TAIL
So I got my response from Facebook, and there are some good and some bad parts. The good news is I have a new strategy to try, the bad news is that not only is it extra work, there are implications for people that have different offers targeting the same audience. Let’s start with Facebook’s response:

“I’ve checked your ads and they seem to be functioning well. However, I’ve also noticed that your ads are targeting the same target audience. Please note that for any given ad unit, our ad auction system selects the best ad to run based on the ads’ maximum bids and ad performance. If you have two or more ads in your account, targeting the same audience they will compete against each other in the auction. If one of the ads performs better than the other, it will have more chances of winning the auction while the other ad may get less impressions as a result. Since the bid is influenced by the performance of the ad, this may increase the suggested bid for this ad.”

So I was chasing my own tail? I hadn’t thought of my ads as “competing with each other,” particularly since they are in the same campaign, and like most marketers, I’d like to be able to test the performance of more than one ad, preferably against the same audience. Apparently, that’s not really possible unless you run them exclusively, at different times. Suggestion to Facebook: let advertisers display ads evenly to expedite the process that identifies the best performing ads. Who wants to compete with themselves? I hope this makes its way up the development track for fixing.

Well, I did say there was good news, and it’s that there’s a new approach to try. It’s actually Facebook’s idea:

“We recommend separating your ads to target different states. You can then create ads that are more targeted to each of your audiences. This will ensure that your ads are not only not competing with each other but also that they are more relevant and accurate.”

Since my ads target specific states, but the same demographics in each state, so I guess I could create state-specific ads, but seriously, up to 50 different ads just so they don’t compete with each other?  Yeah, they’ll be more relevant, but perhaps not enough to justify the extra effort of managing so many more ads (and aggregating the data from each for reporting).

4th Mass Innovation Night Another Success

by redembermarketing on July 9th, 2009

I Headed down to Waltham last night for the fourth Mass Innovation Nights event, which is held in the very cool, Charles River Museum of Industry which is still chock full of interesting stuff even when MassInno isn’t in session.

As always, the companies participating didn’t disappoint. The events have taken on a strong software / technology theme, but that might be largely due to the heavy use of social media to promote the events, and the types of companies that are nearby.

July’s presenters included: two SMS Text marketing companies:  KaOoga and Jittergram
A resource sharing site for photographers: StudioShare
A Facebook app out of Intuit Labs: Lasso Deals
An iPhone app for wine: Drync
A start up for crowd-sourcing viral video production: Viralskool
And two others that I didn’t get to spend much time with: IBM Mass Lab and SpaceMax

My favorites were the SMS txt marketing solutions and the Lasso Deals app.  I was unaware that while I was working at Liquid Machines, just two floors up, Intuit wasn’t creating some accounting software tools, but rather innovating some wacky products like their Facebook app called Lasso. If the trend described in my post on the Facebook Suggested Bid Spiral Effect continues to alienate direct advertisers, perhaps Lasso just might catch on – perhaps it will regardless!

It’s in VERY early stages, so the number of local deals are limited in number and region, but if you’re looking for some restaurant deals in Cambridge, check it out. I like the idea a lot, but suggested that they allow the merchants that post deals to control the thank you message that is delivered to people that share or take advantage of the deal. We’ll see if they incorporate that idea.

I’ve been speaking with KaOoga, JitterGram and two other SMS text message marketing platforms about offering the service to small local retailers. JitterGram has a unique approach that incorporates a bit of a social aspect, whereby JitterGram “consumers” (people that are on a list to receive messages from a merchant) can seek out other companies offering text deals and sign up. This means JitterGram merchants can actually see their list grow just by participating in the program.

I hope to have a partner selected and start testing the demand out there for SMS text message campaign management soon.  Stay tuned.

Facebook Suggested Bid Spiral Effect

by redembermarketing on July 9th, 2009

I was debating whether or not to blog about this, but since a few people have confirmed the phenomenon, and I couldn’t find any other blog posts about it, perhaps it will make an interesting story.

Background:
I run some Facebook Ad Campaigns for clients, and have recently noticed that impressions were drying up.   At the beginning of the month, I had created some brand new ads and increased bids slightly, so I didn’t check the suggested bid range before contacting Facebook support.  Their response was that the ads were not being displayed because bids were not in the suggested range.  Of course, they were at the high end of the range when the ads were created, but within just a few days, the range changed fairly drastically.

So I increased the bids a second time and checked back the next day.  Again, almost no impressions – I was surprised to see that the range had increased again!  At this point, I start to get suspicious, and started contacting some other PPC colleagues to see if anyone else was experiencing this.  There were mixed responses, but at least one person confirmed what I am now calling the suggested bid spiral effect:

“I am seeing this spiral effect too. However, unlike with Google’s AdWords, it is impossible to trace it to a specific driver. As you note, Facebook’s lack of transparency is frustrating to say the least. They make changes without telling anyone and come across as totally capricious. I actually wonder if they are in trouble because it is as if some executive is cracking the whip in the background fanatically trying to extract more and more money out of each interaction with zero regard for stakeholders. Until they explain the rules better, Facebook ads will remain an unviable option for serious advertisers IMO.”

With little change in impressions and no change in the CTR, it’s tough to figure out what’s driving the bid range increases.  I decided to continue playing the game though, only this time I’d monitor it more closely.  No sooner than a couple of hours after raising bids, I noticed that the range increased again for some of the ads.

I should have noted this earlier, but all of the ads were set up as CPC.  So my next tactic was to create a similar ad and change the bid type to CPM and see if it made a difference.  Over the next 24 hours, the CPM Ad represented 75% of the clicks among 5 other ads.

Although I have heard nothing back from Facebook support about the issue yet, perhaps others will confirm the same behavior or describe what they did in response.  The mystery surrounding this simply calls attention to the obvious lack of transparency and documentation from Facebook about how they run ad campaigns.  The more information/guidance they can provide to advertisers, the more confidence the market will have in their platform, not to mention less negative commentary like this blog post.