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Targeting, and Why Facebook is Poised to Win Mobile

At the highest level, when we think about what makes a successful ad campaign it comes down to three core factors: targeting, creative, and bidding. That is to say, as an advertiser are you:

  1. Reaching the right audience
  2. Showing that audience the correct messaging
  3. Paying the right amount to reach that audience (such that you can still make a profit).

When an advertiser thinks about targeting, there are a few different avenues into which their budgets are allocated:

  1. Search – Google, Bing, etc., where they find people actively searching for their products/services
  2. Contextual (display) – that is, showing ads for diapers on a blog for moms or a luxury car on a financial news site
  3. Demographic/psychographic – the one we’re most familiar with on Facebook, where we specify ages, interests, and affinities of our desired audience.
  4. Retargeting/user-level targeting – using an advertiser’s first part data or third party data to reach individual users.

Retargeting is obviously a huge piece of any advertiser’s online strategy, with companies building huge businesses around it –- and all based off recognizing a user via a cookie.

When retargeting on Facebook through Facebook Exchange (FBX), Nanigans also uses cookies to recognize users; however, the majority of our spend is actually done using custom audiences. Facebook is one of the only companies in the world with a large enough registered user base to make use of this targeting, and in many cases is the key holder of the user’s ‘identity’. In other words, people are increasingly using their Facebook account as their primary online identity with which they sign in to other services.

Jumping over to mobile, everyone knows the amount of mobile browsing is skyrocketing (and by extension, the amount of mobile ad inventory). We’ve also seen mobile clickthrough rates (CTRs) prove to be significantly higher than desktop, and we know that last year mobile ecommerce grew by 212% (compared to 20% for online ecommerce growth). So all in all, mobile seems like the place to be for forward thinking advertisers.

The one catch to all this is targeting. Mobile targeting is extremely limited when compared to desktop, and the large mobile networks out there offer primitive targeting options comparatively. Additionally, retargeting is nearly impossible and if you want to track/target a user as they browse from desktop to mobile, forget about it.

Enter Facebook.

Because Facebook owns user ‘identity’, the company is not dependent on cookies to recognize and reach people. When a user opens their Clash of Clans app on iPhone, Facebook knows it — and recognizes exactly who that user is (because Clash of Clans has the Facebook SDK installed). And when an advertiser says they want to reach a specific user on mobile, Facebook is uniquely able to find and serve that user an ad.

Right now, this only happens within the Facebook mobile app itself, and only via custom audiences – but we can imagine Facebook very easily making this level of targeting available within other applications or mobile ad networks, and perhaps even offering cookie-to-user_id matching.

If Facebook does decide to go down this path, they’ll be in a position to provide unmatched targeting options to mobile advertisers. And if ROI follows targeting (as we’ve seen), than it’s no wonder why Zuckerberg said, “There’s no argument, Facebook is a mobile company”.

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