Facebook is continuing to push against criticism about the effectiveness of the social network as an advertising platform by honing its targeting and encouraging marketers to look beyond "clicks".
Following Facebook's disappointing IPO performance, the company is under increasing pressure to better monetise its platform and prove its effectiveness to investors. As a result, this year has seen the social network introduce a number of new features for marketers, including mobile advertising and new targeting techniques.
Facebook's privacy engineer, Joey Tyson, says while advertising is necessary in order to maintain Facebook as a free service, maintaining user trust is still a top priority as the site continues to grow.
In a new blog post, Tyson says the new targeting features launched recently have all been carefully designed with user privacy in mind.
One newly-introduced feature is allowing marketers to target individuals on Facebook based on information they already have. Tyson uses the example of a shoe store looking to target customers who have already bought shoes from them: "The store can provide us with 'hashes' of their customers' e-mail addresses so that we can show those same people the ad without the store having to send us the actual e-mail addresses.
"If a hash from the store does not match any of ours, we discard it without ever discovering the corresponding e-mail address and without storing any information that we did not have before. And once we no longer need the hashes that do match, we delete them too."
Data mining
In order to improve the measurement tools which monitor the effectiveness of advertising on Facebook, the social network also recently partnered with Datalogix. Tyson says the new partnership allows marketers to measure exactly how their ads on Facebook drive real-world sales.
"Companies have long used similar studies for newspaper, TV, and radio ads, and our relationship with Datalogix lets us provide the same kind of information to Facebook marketers at scale," says Tyson.
Addressing some of the privacy concerns that have emerged from the announcement of the partnership, Tyson says: "Importantly, we have designed this process with privacy at the forefront. We compare hashes of some Facebook data with hashes provided to us by Datalogix. Once we compare, we are able to send corresponding data on the reach of large-scale ad campaigns, which Datalogix uses to create aggregate reports comparing product purchases by large groups of people who did or did not see an ad.
"Datalogix is not allowed to learn more about you from Facebook profile information. Similarly, Datalogix does not send us any of their purchase data, meaning we cannot specifically tell whether or not you purchased a marketer's product."
Tyson adds that Facebook believes it can create value for the people using its services by providing relevant ads, which incorporate privacy protections. "In our view, this is a win-win situation for marketers and for you."
Click isn't King
According to Reuters, Facebook's head of measurement and insights Brad Smallwood says the concept that "click is king" makes sense for some companies, but clicks are not necessarily as relevant to brand marketers - where figures on actual in-store sales generated by campaigns may be more useful.
A recent study by Facebook and Datalogix showed that fewer than 1% of in-store sales tied to campaigns on Facebook came from people who actually clicked on an ad. Facebook argues that for brand advertisers, fine-tuning the number of times a customer sees an advert and honing the target audience are far more effective than click measurement.
"Using the Datalogix tool, we'll be able to understand what that sweet spot is," says Smallwood, adding that Facebook will soon control how often each user sees an ad.
Managing partner at GroupM, Vik Kathuria, says the advertising industry has long needed new ways to measure the effectiveness of online display ads. Referring to the click-through rate, Kathuria says as a metric it "was probably irrelevant five or six years ago". "Let's talk about bigger brand dollars and in that context how you measure the efficacy, not click-through rates."
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