Facebook is now trying to lure advertisers with an offer of being able to identify a brand’s customer groups. The social site now has the ability to link its users with their shopping habits. It is using this data in its pitch to advertisers.
Before this news turns on the alarm bells in your mind, we would like to make it clear that this doesn’t mean that Facebook is giving users’ names to advertisers. It is actually matching its data with information from its partner, Datalogix. Though Facebook can identify a user and match that data with Datalogix, it does not share particular user information with advertisers.
The head of measurement and insights at Facebook, Brad Smallwood, presented some initial research at the Advertising Research Foundation’s Re:think conference in New York this Wednesday. When Facebook measured 22 recent campaigns with data obtained from 70 million customers, they found that Facebook had provided a 22% increase in ROI.
So Facebook now has access to purchase data. Advertisers can make use of this and customize their campaigns for dedicated buyers, irregular buyers and also customers who buy competing products.
According to Smallwood, as Facebook digs more into data, they are able to get a segment-level understanding of what is working. He also said that you should have a different understanding for heavy shoppers and light shoppers. You need to target different ad messages in higher frequencies for heavy buyers of your products.
When asked if needing a different understanding for heavy and light shoppers means that advertisers should target more ads for light shoppers, Smallwood said that it depends. He also said that there are people with low probabilities for whom you target fewer messages or none.
There can also be people who are heavy buyers of products within your category (especially a competitor’s products). In this case, Smallwood says advertisers may want to run campaigns with an objective of switching the loyalties of such people.
Such audience segmentation is an evolution for Facebook. Marketers who think that half their advertising spend is wasted away on uninterested people will mostly be interested in Facebook’s audience segmentation pitch.
What is your take on Facebook’s audience segmentation capability offer? Will it help brands do a better job of ad targeting? Put down your opinions in the comments section…