Despite increasing evidence of Facebook’s value to marketers, the company continues face questions about the ROI of its ads. A tool announced today should help answer those questions in a very powerful way: Conversion Lift Measurement.
Conversion Lift Measurement will allow marketers to track online sales and, more significantly, offline sales driven by Facebook advertising. The new capability will be available globally but only to advertisers that have a Facebook sales representative. Right now the company is limiting the service to larger accounts.
For online tracking and e-commerce Facebook will use a conversion pixel or Custom Audiences pixel. For offline sales advertisers will need to upload sales data to Facebook. This is consistent with the approach that the company takes with Custom Audiences. Indeed, offline sales tracking is an expansion and extension of what Facebook has been doing with its Custom Audiences users.
For both approaches the company creates test groups (those exposed to ads) and control groups, which do not see the campaign being measured. Conversion lift (both online and offline) is determined by analyzing sales for both groups. Any difference in sales seen in the exposed group is the conversion lift provided by Facebook advertising.
I’m oversimplifying, but that’s the essence of the methodology. There are nuances and advertiser specific variations, like how long to leave open the measurement or conversion window (e.g., car purchase vs. travel vs. apparel). That will depend on the advertiser, its products or services and its campaign goals — hence a set up and consultation process, which is why for now only larger advertisers are getting access.
Facebook is being methodologically rigorous and saying that Conversion Lift Measurement will definitively establish or reveal causation between exposure to Facebook Ads and online or offline sales. Facebook eventually wants to expand this approach across the internet (that suggests some sort of future Atlas tie-in).
Facebook points out that the sales and user data are hashed/encrypted to protect the identities of individuals. Participating marketers will be able to see the conversion lift data in their Ads Manager dashboards.
Stepping back, Facebook and a few others (e.g., Google) are leading us out of the digital dark ages with new, more concrete metrics — Store Visits is an example in Google’s case — that are closer to marketers’ real-world objectives. While clicks and impressions won’t necessarily die immediately, they will lose their importance in the relatively near future.
Facebook’s audience targeting and real-world sales measurement are on the leading edge of newer approaches to buying and measuring the effectiveness of digital ads. With this announcement Facebook is challenging the rest of the industry to adopt sales lift as a measurement standard.
While not all ad networks and publishers are equally in a position to do this (and not all campaigns generate immediate sales) this is generally a much stronger approach to measurement that will help solve attribution problems and move more brand advertising dollars online.
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