Measuring Reach of Paid Advertising on Facebook

As social media programs are getting more and more popular, it is important to understand how to measure the effect of the paid advertising. In this post, I will like to talk about the basic concept of reach, as ad exposure or reach is the first step in the game of placing ads.

Typical, Facebook campaigns are done to increase the fan base of a particular page or brand. In these campaigns, there are three types of ad impressions placed on Facebook:

1. Paid Media – Paid ads with the message of "Become a Fan" of the particular brand
   
2. Earned/Paid Media – Paid ads with the message of "Become a Fan" but with the social element showing a blurb with the name of a few of your friends who are fans of the particular brand. Since, these ads have the social component these are classified within the earned media category as well.
   
3. Earned Media – These are the instances of ads which show the list of friends who are fans of the brand and have a link below "Become a Fan". Since, the advertiser didn't pay for these impressions, these types of ads or impressions are termed as Earned Media.
   

Thus, measuring reach from all these impressions is not an easy task. It is impossible to measure it using third party ad servers like DoubleClick as the Earned Media is not served via any ad servers. It will be interesting to find out if Facebook can provide information on the number "Earned Media" impressions served for a particular brand. The next step will be to provide the number of unique impressions seen by each user; this will be the reach from the earned media impressions.

Another way of estimating this reach is based on the number of users who become fans from the paid media. On an average, each user might have 50 friends (this is not an accurate number, just for calculation purposes) thus, if a campaign generated 200 fans, the additional impressions generated will be 200*50 = 10,000. However, then some of the users who are exposed to these 10,000 impressions will become fans, thus generating more earned media. Thus, it is a cycle which goes on – beauty of social media. A good estimate will be to use 3 iterations in social environment like Facebook.

A recent study by Facebook and Nielsen shows that the Earned media impressions are the most impactful in driving awareness, ad recall and also purchase intent. Thus, it is very critical to drive these impressions. Though less in volume, these are the ones which have the biggest bang for the buck.

The case of "WASTED" impressions

In my earlier posts, I have talked about optimizing the media in various forms like - Frequency, Creative Optimizer. There are more ways to optimize - Geographically, day parting, week of the day etc.

But the big question is WHY OPTIMIZE? A media buyer would say - I was given a budget of $10 MM and I bought the most effective media. Well, the buyer bought the media which he/she thought would be most effective but what happened in reality?

If the media is reaching out the consumers at a frequency of 15 and optimal is 10, then 5 impressions per unique user are wasted. Now, in terms of $ if the average cost per 5 impressions is $.01 (assuming $2 CPM) then we are wasting $.01 per consumer. If the campaign is reaching 50 MM unique individuals, then the loss is $500,000.

Yes, $500,000 in wasted impressions - money used to reach out to consumers who have already seen your ad 10 times.

So, as per my previous posts there are many advertisers who if not paying attention to frequency are wasting impressions and increasing their cost per acquisition. Personally, I believe this was/is the case with Vonage, Netflix, Zecco, Sarah Marshall (the movie which is about to be released).

In the online world, cookies should be used to identify if this is an existing customer or not and then try to up-sell or cross-sell their products.

Similar math can be done to estimate the wasted impressions based on day parting (what time of the day does your market segment most active), day of the week, Geographically etc.

Another example is engagement, move impressions out of placements which have a lower consumer engagement (click-through for online, phone call rate for DRTV etc). Move the impression to places where there is higher engagement. Make the most out of your marketing $, it is money which could be used for a new product launch or your next big campaign like holiday campaign in Q4.

It is very important to do a mix-media modeling if you are using various channels (Out of home - Cabs, Billboards, buses, trains, Online, Search, TV) to find out the overlap of consumers within each of these channels. This could be hard but hitting the same consumer again and again from all channels - NOT A VERY GOOD IDEA :). In simple terms - all the media buyers for various channels should talk before planning, estimate reach and frequency, if possible research the day parts and then launch the campaign.

Reach and Frequency

I often report numbers showing 22+ frequency and always wonder if it really true? Why are we showing the same Ad to the same person 22 times. Something is wrong with the data... but, if it is for every campaign it must be true. Probably, that is how it is...OK.


I was driving in downtown Chicago (taking my wife to the Yoga class), and guess what - I start seeing Zecoo trading's ads. First ad - I said "Hey, the brokerage account that I use for trading, cool!", the next minute I see 3 cabs with the same ad for Zecco trading, I thought great! they are really try to acquire new customers. Believe it or not, in my round trip of less than 2 miles, I saw 8 Zecco trading ads. At the end of the drive, I was like OKAY! I get it, Zecco trading is offering 10 free trades and I use them every month. Forgot to mention... I see their online banner ads during the day at work.


The above is a classic example of over saturating the market with ads. Advertisers need to realize that there are only "n" number of consumers out there in the market. By spending more money, we cannot increase our market size. The more money the advertisers spend, their expectations for returns also go up. Is that justified? No! By showing more ads, you are reaching the same consumer audience and you cannot force them to start using your service or buy your product.


In my experience in the online world, 4-6 Ads bi weekly per user should be the ideal frequency. If a consumer does not convert due to exposure 4-5 times, chances that he will convert with 22 views are also very slim :)