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Finding the ROI in Facebook ads and market research

DECEMBER 21, 2011 – Social media websites have been scoured for their marketing capabilities for years, offering market research opportunities, a forum for building online communities and a way to distribute advertising copy and materials once they have been created.

Facebook is one of the premier options for advertisers, since it has an audience of 800 million members who willingly share their personal information and preferences with the world. Sweetening the deal is the fact that it’s much less expensive to run a social media outreach program – with Facebook pages, Twitter feeds and more – than an email marketing campaign, Tim Peterson writes for Direct Marketing News.

However, some in the advertising and marketing industries were recently shocked to hear that the social networking darling was playing favorites, Peterson says. He points to a report from Techcrunch, which revealed that Facebook was “quietly offering a special downstream conversion tracking system to some of its top advertisers.”

Marketers aren’t allowed to have cookies or tracking pixels on their Facebook display ads, the news outlet explains, because the website has its own tracking device on the advertiser’s conversion page. The outcome, according to Techcrunch, is that the website is able to keep tabs on indirect conversions and the ad click-throughs that result in direct conversions. Then Facebook passes those reports to the advertisers.

The system was previously publicly available, but was discontinued after advertisers were unable to accurately calculate their ROI and third-party developers could not follow the indirect downstream conversions. However, rather than killing the function completely, Facebook brought the program in-house – “hosting and applying the tracking pixels itself to ensure accurate usage,” according to the source – and offering it to certain “prominent advertisers.”

“We run the analysis on our end and then we spit out a Powerpoint deck showing that of this many people that bought this [product], this many people saw this ad on Facebook,” the website’s communications manager for monetization, Brandon McCormick, told the news outlet.

Security and privacy are also concerns, he said. “We make the advertisers sign contracts [to keep the data private], we don’t share the data with other advertisers, and we don’t use this for any ad targeting,” McCormick explained. “It’s purely for ad ROI analysis.”