Optimization for the Client or for Facebook?
I’m working on a campaign for a client and recently prepared some reports on the level of activity.
As I reviewed the stats, I was surprised by some of the findings.
Here’s a sample report, with obvious confidential client details omitted in order to respect privacy:
NOTE:A� Each line represents a different ad, but all of the targeting criteria are exactly the same (geography, demographics, etc) and all of the ads go to the same landing page. canadian drugs accepting visa card, canadian drugs accepting visa card, canadian drugs accepting visa card, canadian drugs accepting visa card, canadian drugs accepting visa card, canadian drugs accepting visa card.
When I manage digital marketing campaigns for clients, I expect to see ads optimized according to the best Click Through Rate (CTR) or according to another conversion value that is based on post-click activity (eg. Cost Per Acquisition, or CPA).
Either way, the central determinant of the total spend per ad or per keyword (or other advertising component) is usually a function of maximizing the number of clicks that I get with the least amount of spend.
For example, if I spend $100 on two ads and one has an average CTR of 1% and the other has a CTR of 2%, I would expect the ad platform I’m using to optimize to run the ad that gets a 2% CTR more often.A� In fact, I would go further and assume that the ad platform would also shove the 1% CTR ad to the bottom of the pile.
With that in mind, I would have expected the ad in line 2 – which generated a CTR of 0.018% – to generate the bulk of my results in terms of total spend AND in terms of overall activity, as I would have assumed that Facebook would optimize according to the best performing ad.
Based on the data above, this did not happen.
As you can see, the biggest amount spent on the campaign was with the first line, with a total spend of $321 out of $462, or about 70% of the total spend.A� Unfortunately, the CTR was much lower at 0.013%.
What you should also notice is that the average CPC is substantially higher for the Line 1 ad compared to the Line 2 ad.
What Should Have Happened?
It’s hard to know what the results SHOULD have been with this campaign, but if I create an estimate where 30% of the ads should have been delivered to the 2nd ad, 25% to the 3rd and 4th, with the balance going to the rest, I would have wound up with the following results:
- Total spend = $462.99 (no change)
- Total clicks = 499.8 (an increase of 33% in volume)
- Average CTR = $0.93 (a decrease of 24%)
Now, with this example, the difference doesn’t look like much, but with a bigger campaign, you can see that a few hundred clicks can add VERY quickly.
The percentage difference shows this:A� I know advertisers that would wrap me in a big giant hug if they knew I was able to get 33% more clicks for 25% less in cost – other things being equal.
I’m in the process of reviewing a number of other campaigns to see if this is a one-off event or to see if I made an error (which is entirely possible) or to examine whether or not something else happened with the campaign that made Facebook’s ‘optimization’ engine choose the ad with the first line over the second.
A More Thorough Analysis
As mentioned, I’ll be looking at other campaigns that I’ve managed with an objective eye of trying to identify whether or not this was a one-time thing or it’s a trend.
You can help: I’d like to know what your experience has been with Facebook campaigns and whether or not you’re suspicious about the net results that you’ve obtained.A� Have you found yourself asking about the ads, wondering why the worst performing ad got the most visibility, simply because it had the highest CPC bid?
Please feel free to send your results or reports (in confidence, of course) to me at bill AT bottree DOT com for an evaluation.
Also, if you’re with Facebook and you’re reading this, I’d like to know your side of the story.A� Did I miss something critical?A� I certainly want to know if I’ve made an error because I don’t want to get myself in trouble and I’ll retract this article and make a full apology if I’ve made a mistake.
All of this clearly very disconcerting in the wake of news that the average CPC rate on Facebook is up 22% in Q2 alone (after a staggering 40% increase in Q1 2011), so hopefully we can all get to the bottom of this and feel good about our media buys.
Bottree Digital Services