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Why Retailers Are Investing In Facebook For The Holidays

For many retailers, the holiday season is the most important time of the year.  Retailers are gearing up for a busy holiday shopping season, with analysts predicting another year of sizeable growth for online sales in 2013.  eMarketer estimates that online retail sales will grow by 15.1% year over year in November and December, reaching 68.1 billion in the United States alone.  Mobile is also expected to play an important role with its share of U.S. retail ecommerce sales expected to reach 16%.

Advertisers are also increasing their investment in Facebook this holiday season.  A recent RBC Capital/Advertising Age study found that in September 74% of marketers reported buying ads on Facebook as compared to 55% in July 2012. Retailers are increasingly turning to Facebook to engage with their customers, share promotions, introduce new products, drive traffic to their websites, send people to the store and much more.

As retailers start running sales in October and get ready to go full tilt once Halloween is over, we wanted to highlight how Facebook advertising has evolved from last year and how retailers are leveraging Facebook ad products to reach their 2013 holiday marketing goals.

1. Facebook Mobile Ads

Facebook’s breakout 2013 second quarter results surprised everyone.  The key driver behind the success of the company’s record 53% year-over-year growth is mobile, which accounted for 41% of its total ad revenue. Mobile ad units used to be tiny little banners but Facebook has given advertisers a whole new opportunity.  Its mobile ad units (mobile app install ads and mobile Page post ads) are larger and appear in the News Feed- where users spend the majority of their time.  Add in Facebook’s unmatched reach (819 million global mobile users) and advanced targeting capabilities –you have a winner for retailers looking to meet their holiday sales goals.

Recommendations:

  • Provide a cohesive cross channel experience for busy shoppers on the go who are looking for deals by providing easy access to coupons, inventory information, store locations, and product and pricing information.
  • Use your app to combat “showrooming” (evaluating an item in-store but deciding to buy it from a competing retailer) by emphasizing your unique value proposition.
  • Don’t forget about post holiday purchasing. Continue to offer promotions for all those people who received gift cards and inspire them to spend.

2. Facebook Exchange

In June 2012, Facebook launched Facebook Exchange (FBX) its retargeting advertising solution, which allows real-time bidding across its ad inventory. Initial results proved successful with domain ads on the right hand side.  FBX quickly became Facebook’s most successful performing ad units, accounting for nearly 28% of all display impressions in the United States.    A few months ago, Facebook opened up its News Feed to FBX with the promise of providing greater relevancy for users and better performance for advertisers.  Early results have been promising, particularly for FBX real-time dynamic creative functionality (highly-personalized ad creative) available with the social network’s link Page post ad format.

Recommendations:

  • Start acquiring your remarketing groups early and make sure you place a retargeting pixel on all of your landing pages.
  • Create dynamically generated News Feed ads based on the specific SKU/product viewed by the user.

3. Custom Audiences

Custom Audience targeting enables retailers to match their CRM data (email addresses, user IDs) with Facebook user profiles that contain the same information.  With Custom Audiences, retailers can tailor ad creative to specific customer segments such as audiences who have purchased previously, audiences that have purchased similar products and audiences who have purchasing anything.  Nanigans recently rolled out automated Custom Audiences which creates and updates a custom audience every time an event is captured by pixel.  This gives advertisers constant and immediate access to their most relevant audiences without having to manually keep their Custom Audiences up-to-date.

Recommendations:

  • Organize your holiday Custom Audiences early so you can promote gifts for each customer segment  (gender, age, purchase behaviors, price point). For example, users who fall into a discount shopper audience should be shown ads promoting deals whereas users who fall into a high-end shopper audience should see ads featuring luxury products.
  • Target last year’s top purchasers, and build lookalikes off of these user groups to expand reach.
  • Use Custom Audiences to target gift cardholders (post holiday) and inspire them to shop.

4. Page Post Link Ads

Facebook recently improved its ad units to align more closely with marketers’ business objectives.  Facebook Page post link ads are optimized to drive off-site conversions and sales.    Aligned with Facebook’s updates to News Feed, they have enlarged images and the clickable area for Page post link ads on both desktop and mobile.  Facebook also updated the ad units so that the images have the same aspect ratio across desktop and mobile so that advertisers no longer need to create separate campaigns for each device. This allows retailers to more effectively showcase their products and services to meet their branding and direct response objectives.

Recommendations:

  • Focus on imagery whether your campaign is on desktop or on mobile.  Beautiful images of products or people can be presented in a variety of ways to grab the user’s attention and most importantly get them to click.
  • Make your copy concise, exclusive, enticing and worthy of a user stopping what they’re doing and pay attention to you. Think about same day sales/events/ specials, countdown offers, local offers and driving users offline to physical store locations.
  • Inspire Likes, comments and shares by creating content and offers people are excited to pass along.

5. Conversion Tracking

Conversion tracking allows advertisers to measure and optimize their ads leading off Facebook.  It’s enormously valuable to marketers because it provides the ability to measure the true ROI of your campaigns.   With data sharing and downstream revenue tracking, you can optimize your Facebook ads for predictive lifetime value to acquire the most profitable customers and make the best use of your holiday marketing spend.

Recommendations:

  • Install conversion pixels to understand events that happened while people are browsing your website such as viewing a product, registering, adding a product to a shopping cart and purchasing.
  • Rather than relying too heavily on clicks and CPA, leverage predictive lifetime value to understand the quality of your customers as well as their purchasing power.   By optimizing towards your best customers who generate the greatest profits over time, you can protect yourself against low future values and maximize your investment today.

It can be challenging for retailers to break through the noise, especially during the holiday season.  We hope that sharing what we’ve learned by managing campaigns on Facebook  for 200+ of the world’s largest direct response advertisers inspires your success. If you have any questions, don’t hesitate to contact us.  And best of luck with your 2013 holiday marketing campaigns.

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