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Facebook’s Small Biz Metric: Outcomes Are All That Matters

Facebook's Doug Stotland is working to expand the social net's value to small business advertisers. To satisfy them, the metrics are both simple and complicated.

Doug Stotland
Facebook’s Doug Stotland

When it comes to social media advertising, particularly for local, independent businesses, the usual ad tech solutions don’t suffice, said Doug Stotland, product marketing director for monetization at Facebook. Offline and online ad effectiveness need to be synthesized, as the only thing small businesses want to know is whether or not their ads drive people to their store or not.

During a Q&A with Opus Research’s Senior Analyst, Greg Sterling, at this past week’s Place conference, Stotland also called on agencies to continue to break down the “silos” that separate online, social, print, TV, and out-of-home.

While Stotland’s views about tearing down the barriers between media channels are widely shared throughout the digital marketing industry, the fact that mobile now accounts for 62-percent of Facebook’s ad revenues makes the social net’s push for a more comprehensive range of ad effectiveness measurements. And since there are now an estimated 30 million businesses on Facebook, the ability to track mobile to desktop, online t0 offline, is an enormous opportunity for the company, which posted another quarter of stellar earnings performance this week.

Small business advertisers were called out during Facebook’s earnings call this week, with 1.5 million active companies now advertising on the platform, noted Brian Wieser, senior analyst for Pivotal Research Group. The chance to continue growing this segment of the advertising market appears to offer “much more room for future growth as one among many of the key drivers of Facebook’s overall growth,” Wieser added.

It’s An Online/Offline World

Being able to capture that local, offline ad growth was clear from the discussion of the social network’s revenue, which was $2.9 billion, a gain of 67 percent over the same period last year. As COO Sheryl Sandberg said during Facebook’s Q2 earnings call on Wednesday, attribution — the ability to figure out what drove consumers to a purchase decision — is something that the social network can help solve for local businesses, which are increasingly interested in seeing the impact of online-to-offline marketing.

“Our goal with all of our clients, from the biggest to the smallest, is to drive their business results and sell a product, sometimes online, but often in stores,” Sandberg told analysts, according to the Seeking Alpha transcript. “We’ve done a lot of work over the last year in measurement. Investing in measurement and connecting not just [desktop to mobile], but online to offline, is super important. Because we can prove those results to our marketers large and small, they’ll continue to invest.”

Facebook’s ultimate advantage is that it contains users’ actual identities across desktop and mobile. “We have found ways — very privacy protective ways — to work with third party users of data to connect offline sales to online ads. That remains a very big focus for us,” she added.

Mobile Is Behavior

Being able to take data from one channel and match it to another is where entities like Facebook can produce fuller insights into consumers’ purchase intent and shopping habits, Stotland noted. But the focus on cookies, a PC-based targeting and data tool for the most part, or on gross ratings points, a standard TV metric, force businesses to cobble together very different measurements when determining their marketing budgets. Even online ad tech companies have done a poor job of connecting all the dots that go into understanding why consumers buy something at a particular moment and place.

“It’s looking at your [customer relationship management] systems and saying, ‘These are customers I’d like to get in front of,’ and not being able to follow through,” Stotland said. “[The advertising industry] is great at doing that with catalogs and direct mail. But people are spending more time looking at their phones. How do we get that experience, that understanding, from catalogs and direct mail, on to people’s smartphones? That’s the question we’re working on answering.”

The only answer marketers — the local, small- to medium sized ones, especially — want is the return on investment. The outcome is all that matters, Stotland said.

Brick and mortar marketers know exactly who their customers are. And they know most of those people are on Facebook. The social network’s Custom Audiences targeting product was launched for all Facebook advertisers last October with the promise of giving clients more control on the kind of outcomes they want to achieve.

It also reflects consumers’ evolving relationship with marketing, privacy, and the level of receptivity to certain kinds of marketing messages, Stotland said.

“Look at people’s behavior and how that’s changed the path to purchase,” Stotland told the Place conference crowd. “It’s completely different from not just five years ago, but [from] a year-and-a-half ago. There’s no such thing as an ‘in-store purchaser.’ People are doing research for products on their laptops and then checking prices on their phones as they’re out shopping. So omni-channel is becoming a behavior. Mobile is a behavior. If we want to be able to measure this stuff and make some smart marketing decisions, we have to be able to look across devices and channels. Of course, none of this is easy. But we’re getting there.”

About The Author
David Kaplan David Kaplan @davidakaplan

A New York City-based journalist for over 20 years, David Kaplan is managing editor of GeoMarketing.com. A former editor and reporter at AdExchanger, paidContent, Adweek and MediaPost.