Just ahead of Black Friday and Cyber Monday, social media Goliath Facebook is rolling out a sales tracking tool for advertisers. The conversion measurement tool is a welcome and much-anticipated addition to their social advertising suite.
Facebook began rolling out a conversion measurement tool on Friday to help marketers bridge the data gap between social ads and online sales.
David Baser, Facebook’s ads product manager, told Reuters the tool has been a highly requested feature for some time. “Measuring ad effectiveness and outcomes is absolutely crucial to all types of businesses and marketers,” he said.
“You would see the number of people who bought shoes,” he said, using the example of an online shoe retailer. However, marketers couldn’t get information that could identify the people, he added.
Third parties such as social shopping app maker Glimpse have been offering solutions to specific aspects of the social commerce “problem” for some time, particularly the disparate data sets available to online retailers.
“There are about 500 million products for sale and about 100 million (1 in 5) have a Like button next to them. Only about 3 million of those have ever had a Like,” Usher Liebermann of Glimpse told Search Engine Watch. “We see a lot of value in the data of knowing what someone has Liked. Once they give permission, we can see the products they Like, the stores and brands they Like, and the stores, brands and products their friends like.”
Glimpse uses their crawl data with Facebook’s Open Graph to gain more insight than is available from Facebook itself. “Say you like a shoe on Nordstrom’s site. Facebook knows you Like a product, but they don’t know it’s a shoe; only that it is a product and the page it came from,” Liebermann explained. “Nordstrom’s know something has been Liked. We have the contextual meta data around it… we actually know more about it than Facebook.” This allows Glimpse to analyze activity surrounding specific products and make social recommendations to users of the app.
Until now, however, retailers have struggled to directly attribute online purchases to Facebook ads activity. The new feature is as critical for Facebook as it is for retailers; they need to prove to advertisers that their ads are a worthy investment and to do that, measurable outcomes are key.
Still, advertisers saw improved ad performance in Q3 2012, with click-through rates more than making up for falling costs per click.
Social media revenue will reach $34 billion by 2016, according to Gartner analysts. Advertising and gaming account for approximately 90 percent of that revenue; in 2012, they accounted for $8.8 billion and $6.2 billion, respectively.
“New revenue opportunities will exist in social media, but no new services will be able to bring significant fresh revenue to social media by 2016,” said Neha Gupta, senior research analyst at Gartner. “The biggest impact of growth in social media is on the advertisers. In the short and medium terms, social media sites should deploy data analytic techniques that interrogate social networks to give marketers a more accurate picture of trends about consumers’ needs and preferences on a customized basis.”
The ability to attribute online sales to Facebook ads is certainly a big step in the right direction for advertisers. Facebook has not yet announced when the tool will be available to all marketers.