Facebook is out to prove it can drive store purchases
Facebook has become increasingly driven to correlate ad impressions on its platform with purchases in physical stores, seeing these cross-channel analytics as vital to its further growth as a marketing platform.
Although Facebook’s marketing services, in the scheme of things, are still in their infancy, growth in 2014 has been impressive. Revenue from advertising was nearly $3 billion in the latest quarter, a 64 percent year-over-year increase. As a point of reference, the New York Times’ combined print and digital revenue for that period was $365 million. With 1.3 billion users, Facebook has nothing but upside growth potential.
And yet, marketers are migrating their funds from traditional media too slowly for Facebook’s liking and so the company is keen on dispelling the notion that social media is too nebulous a marketing channel to replace TV, print and radio.
While connecting browsing and purchasing behavior is now a mainstay of e-commerce marketing analytics, most consumer purchases still occur in physical stores. Further, store purchases are increasingly influenced by digital media messaging, making the cross-channel data that much more essential. And yet, tracking actions from cyberspace to the store shelf has proven to be quite a challenge. It doesn’t hurt that a company with deep pockets like Facebook is working hard at it.
In the last couple of years, Facebook has invested in an array of companies and technologies to build up its capabilities, according to PCWorld. The company introduced its Custom Audiences targeting tool in August 2012 and has been beefing it up with new features and refinements since then. Custom Audiences allows retailers to match in-store shoppers with their Facebook accounts by way of an email address, phone number or name.
Facebook uses an encryption method known as "hashing" to make sure private information is not shared, so the benefit of Custom Audiences comes in aggregate data that demonstrates how well ads are influencing in-store sales.
Although connections are limited to in-store customers who use credit cards, loyalty cards or other forms of ID capture, Brian Boland, Facebook’s VP of advertising technology, says they are matching a very meaningful number of transactions. "We can see quite a bit of the purchase history," he told PCWorld.
But Facebook knows they’re not the only game in town when it comes to digital marketing, so through its diverse acquisitions, the company is broadening its scope beyond its own borders.
In 2013, Facebook acquired Atlas from Microsoft, which allows marketers to track ads served on web and mobile outside of Facebook. The company’s Audience Network, a system announced earlier this year, allows marketers to place ads in publishers’ apps. And LiveRail, another acquisition, enables video ad targeting to specific demographics.
- How your in-store shopping affects the ads you see on Facebook – PCWorld
- What is a Custom Audience? – Facebook
- Custom Audiences May Be Facebook’s Most Compelling Ad Product – Marketing Land
What do you see as the greatest benefits of having reliable analytics that connect online ad impressions to in-store purchases? How might such insights influence merchandising and the use of in-store media?