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Content of Friends: How Facebook Transformed Advertising Content

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This Q&A with Nanigans’ SVP of Marketing, Dan Slagen, was originally published in Lead Digital.

1. What is your definition of native advertising?

Native advertising involves ad products built specifically around the unique attributes in a given publisher environment.

Facebook is a prime example of this. Sponsored Stories – arguably the first native ad broadly introduced by Facebook – incorporated the benefits of social context: the Likes and comments of people to whom you are connected. These social attributes (the mapping of people to one another as well as to groups, Pages, Apps and other Facebook actions and entities) are unique to the Facebook environment. Not only are they unique, but early academic studies indicated they were effective in driving heightened relevancy and thus engagement with a marketer’s message.

More recently Facebook has released native ad products like unpublished page post ads, which feature a large creative canvas in the News Feed and unlimited targeting opportunities from psychographics to behaviors. The ads are unique to Facebook in that they act like any other content being shared from friends on Facebook, and are coupled with the unique data that Facebook offers in its targeting arsenal.

2. Is the creation and format of native ads highly efficient?

There’s three core aspects to any successful online advertising campaign, which are no different in a native ad environment: creative, targeting and optimization. When it comes to creative, are you showcasing remarkable visuals and a strong call to action in your messaging? Are there effective targeting tactics to place various flavors of this creative in front of the right, relevant audience at the right time? With optimization, are you able to measure, predict and attribute downstream behavior like purchase revenue from the native environment in order to effectively scale campaign performance in an automated fashion?

Facebook offers a blueprint not only for what makes an effective native ad, but how to scale and make more efficient a native advertising ecosystem. For example, Facebook recently enabled advertisers through Facebook Exchange to leverage unpublished page post link ads in remarketing efforts at the individual impression level – offering an intersection between real-time bidding and native advertising.

An important consideration in native environments outside of Facebook is whether the signals generated will in fact drive enhanced programmatic buying. As far as efficiency goes, it will also be critical (in this new age of personalization and technological ability to bid at the individual impression level) for these environments to pass attributes through a real-time biddable exchange. As we’ve seen with Facebook Exchange, when done right, ads perform better, demand increases, rates strengthen and the native ad environment is able to continue to invest in the user experience.

3. Could you tell us about a recent case study?

We recently published a case study showcasing how online design store Fab.com leveraged our predictive lifetime value platform and Facebook’s native custom audience targeting to expand its customer base into Europe, drive product sales, and achieve a high return on their ad spend investment.

Custom audiences enable marketers to remarket to their current customer base on Facebook, and thus provide a base to expand to lookalike audiences who share similar attributes. With custom audiences marketers take the information in their CRM databases (such as email addresses and phone numbers), and match this (through an anonymized process called hashing) with Facebook profiles containing the same information – thus creating targetable, “custom audience” of known customers on Facebook.

Fab’s custom audience ultimately was 10X more likely to purchase than audiences who had no prior awareness of the company’s brand. Beyond this, using Nanigans’ lookalike tool for affinity analysis, Fab was able to expand their marketing dollars to audiences who shared similar characteristics with this custom audience. This strategy resulted in acquiring customers with50% greater LTV than standard targeting on Facebook.

Overall, Facebook’s native ad tools resulted in customers with 2X greater LTV than customers acquired via other, non-Facebook advertising channels.

4. Emarketer is predicting a “gold rush” for native ads.  What does your forecast look like?

While we can’t speak to other native advertising channels, both Facebook ad budgets for current customers and the pace of onboarding new customers have been growing steadily — especially in the retail, ecommerce 2.0 and travel verticals. These verticals are turning to Facebook as core channel to acquire high quality customers and drive incremental revenue.

Unpublished page post ads have been one of the most popular ad types leveraged by these verticals, and were just released broadly in March so we anticipate the adoption growth trend to continue. Facebook’s native mobile offerings – mobile app install ads in particular – are also growing quickly. In fact on any given day, mobile can comprise nearly fifty-percent of the Facebook ad spend marketers manage through our software. And much of this is with thanks to the challenges Facebook is solving on mobile with regard to creative, targeting and measurement.

5. With Yahoo buying Tumblr display and social advertising are coming together. What new kinds of ads would you like to see?

Closing the loop between paid, owned and earned media is certainly one of the promises and has been one of the main draws of native advertising – no matter the channel. Facebook has innovated and tested a wide variety of ad types in the last several years, and is now actually working to simplify their offerings down to ad types that meet specific marketer business goals — from driving awareness to direct response. Advertisers leveraging our platform are happy to see this simplification, as it allows them to focus on core units that provide the greatest relevancy and response rather than allocating test budgets across a variety of products. The simplification also works to extend and make the most effective aspects of ad units like Sponsored Stories available across all native ad offerings.

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