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).

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.

How is Social Media Influencing Email Marketing?

by redembermarketing on May 10th, 2009

While there are still many companies that are still working on improving their email marketing processes let alone social media, those that have already augmented their approach with social media are quickly realizing that email still plays an important role.  Personally, I believe that email marketing will remain a relevant and important component of most organizations’ marketing strategies, but without a doubt, the influence of social media will be felt throughout most marketing teams.

Last week, MarketingProfs spoke with IBM’s Sandy Carter, who will be speaking at their upcoming MarketingProfs B2B Forum.  She rightly points out that “the use of Web 2.0 technology should be core to all integrated marketing going forward,” warning that isolating your social media team from the rest of your marketing staff could result in sub-standard results.  When asked about common misconceptions organizations have about social media, her first answer was that many companies believe that social media is a magical elixir, when it’s actually just a new (and important) component in the marketing tool box.  She suggests that we all keep in mind that our objective is to drive business, which can sometimes get lost when an organization or team becomes enamored with the tools themselves.  Amen, Sandy!

Without a doubt, social media is ideal for coordinating and executing public conversations with individuals you might otherwise have never had the chance to reach.  In some cases, like direct messages on Twitter, etc., it can even help facilitate private conversations. The pubic part of these dialogs represent a real pportunity to get your message or at least your perspective out into the open in what many are calling a more “trusted environment.”   Tracking how much each individual effort is impacting the bottom line, however, is another story.  Sandy herself admits that it’s hard to measure the value of the relationships that are formed online, but it doesn’t stop people from trying.  Some companies coordinate coupon codes that are targeted at specific social sites, others do their best to analyze traffic sources and purchasing influences.  According to Sandy, “IBM Research and MIT’s Sloan School of Management found that the average e-mail contact was worth $948 in revenue.”  They did so by tracking the influence of more than 2,600 IBM consultants’ email address books over the course of a year!

So we all know that social media provides a very efficient way to develop inbound traffic, but what companies do with that traffic is key.  Those that capitalize on their social media efforts find ways to continue the dialog with an audience that expects to be part of a conversation.  It’s important to note here that relevance has just become much more important, since mass marketed messages that have historically been the trademark of email marketing will no longer suffice.  Messages now must provide the personal or targeted conversation that audiences are coming to expect.

So what does that mean for email marketers?  Processes must be refined to accomodate more granular segmentation, triggered emails should be designed to efficiently and accurately respond to certain activities, and more specific nurturing campaigns should take historical behavior or prospect profile characteristics into consideration.  All of these steps are intended to increase the relevance and timeliness of your communications.

I think the amaboston.org social site itself is a good example. It’s a social site (albeit, semi-private) but email notifications play an important part in keeping members informed about what’s going on. In many cases, Myles is writing content to us that we’re likely to find highly relevant, and uses the site to promote the AMA chapter’s objectives, deliver value and ultimately increase membership.

Creating or participating in niche communities within larger public social media sites not only helps with SEO (as many SEO and social media advisors have rightly pointed out) but can also assist with outbound communications as well.  Social media is an opportunity for new prospects to learn your company’s style, perspective and (gasp) value proposition- yes, somewhere in between posts about your latest networking event and why your local Starbucks just doesn’t make ‘em like they used to, you can contribute some real content that’s directly tied to what your organization does.

Social media can actually make your email marketing activities much easier: your participation in a social site gives you the opportunity to discover (or create) new content that’s perfect for a campaign that continues, extends or introduces the conversation to someone that was previously unaware via email.  There is so much more relevant information made available by social media, that there are literally unlimited opportunities to create email marketing messages that deliver value, engage an audience and drive action, all through improved relevance.

I certainly don’t think email marketing is going away, but it’s likely to be held to a higher standard as social media continues to become more influential.