There are two primary types of online advertising: direct sales marketing and branded ad campaigns. Direct sales models like online affiliate marketing or email marketing have already been proven. However large brands have only begun spending billions of dollars online, because there have been very few ways to monitor the effectiveness of campaigns. Let’s say that you set up a Facebook application which millions of users interacted with. How do you then measure the ROI of that program once it’s complete? Given that large companies spend hundreds of millions if not billions of dollars on advertising everywhere, it’s difficult to track the impact of a single advertising program on a user’s awareness of a product or service. That could all change with Facebook’s announcement tomorrow.
Facebook’s solution is one that is combined with Nielsen, the company which is most dominant in the medium which Facebook is attempting to steal branded ad dollars from: television. The goal of the program is to let Nielsen customers “measure the impact of the ads they buy on Facebook”. Advertisers can perform market research among two primary user groups: those that have viewed their advertisements and those who haven’t.
Back in June Fred Vogelstein wrote about Facebook’s plan to dominate the internet by helping to reach the “promised land of online brand advertising.” Television already has a solution: Nielsen metrics. Now Facebook is looking to leverage the company’s diverse set of Fortune 500 clients to get them to pour their money into what should be the worlds largest social platform. It’s something Google has failed to accomplish as Vogelstein wrote:
Google has courted them for four years, to no avail. That’s because, while search ads are great at delivering advertising to users who are seeking specific products, they are less effective at creating demand for stuff users don’t yet know they want.
Now Facebook will provide brands with something television never had the capacity to deliver: immediate feedback. After users are exposed to a brand’s campaign, various polls will be run to test what the impact was. Tie in Facebook Connect as a tool for measuring branded campaign exposure in locations off the site and you begin to understand what Facebook is attempting to accomplish.
Reprise From Beacon
Facebook’s last experiment to attract brand dollars, Facebook Beacon, was essentially a disaster with users fighting back against the program and numerous companies suing for consumer privacy issues. Last week those suits were finally settled and now Facebook is preparing to return to New York City in an attempt to court the largest brand advertisers once again. Tomorrow the company will officially announce “Brand Lift” in partnership with Nielsen, but in contrast to Beacon in which the results unfolded for all to see, Brand Lift won’t have a public facing component.
Instead, advertisers will be able to work with Facebook privately without the public knowing who’s testing out the system (unless of course they decide to announce it). If the results go well Facebook may just have the key to unlock the brand advertisers large vaults of advertising dollars. If the results don’t go well, Facebook will be able to take another shot at it because after all, more than 6 billion minutes are spent on Facebook each day.
It’s a service that no company has been able to provide as of yet. While the theory behind it, ask study participants to respond to questions before and after they are exposed to ad campaigns, makes a lot of sense, it’s still just theory. Facebook wouldn’t be presenting the program without testing it out though. Just last week I saw a poll for a product that I’ve never heard of. The question was essentially “Which of these brands are owned by Purina”.
However I don’t have a cat, wasn’t quite sure why I was seeing it, and didn’t know the answer. My guess is that a follow-up poll will soon show up to see if my ability to answer the question properly has changed based on exposure to some advertisement. The idea is simple yet powerful and if all goes well, Facebook may be able to coax brand advertisers into opening up their wallets just a little bit more and be the first to crack the online brand advertising nut.