Facebook Tool That Measures Ad-Driven Sales?

The other day in my e-marketing class, we had a current Robert Lee Graduate School (UBC) MBA representative from Microstrategy come in and speak about the Facebook Wisdom App and its data collection analysis. Heard of the Wisdom App before? Well, it’s something that may catch your attention if you knew the amount of data that is contributed by your profile and the profile of your friends (which quickly made me want to alter those Facebook privacy settings after listening to the 80 min. session!). Basically what the app does is help marketers facilitate their marketing activities by using collective intelligence to organize and obtain the data collected from over 16 million profiles that have given access to Wisdom. Although this is a portion only of the billions of users on Facebook, it’s a good start that’s continually growing. Your profile can easily provide useful data that shows what places you like to eat at, an approximation of your income, what type of music you like, etc. that can be used by marketers to create campaigns to suit their target market’s interests or even look towards competitors that may give insight on how to leverage their own success. For example, businesses can use data to find out which celebrities are more significant and influential to their audience, and as a result, can use these influencers in their ads to better connect with their audience.

To break it down, here are the key things you can do with Wisdom:

1. Analyze Demographics
2. Discover Interests
3. Explore Activities
4. Investigate Consumer Segments
5. Compare Consumer Segments
6. Study Psychographics

Wisdom extracted the data it had from Facebooks users, and created these rankings based on what users fan “like”, whether their posts contain relevant keywords, etc. This gives a better understanding of exactly what type of consumers are interested and what are their other interests. And essentially, how Microstrategy plays a role is that they help you more effectively engage and monetize your Facebook fans.

Marketers are interested in understanding whether their advertisements are leading to that additional sale and having an affect on the consumers. The effectiveness of advertisements in social media sites have been an issue, as the metrics and measurements for obtaining the results aren’t always what marketers want to hear. Hearing that there are a drastic increase in click rates for a particular advertisement posted may be great to hear, but it doesn’t necessarily show whether these clicks are leading to actual increase in sales.

I came across an article, Facebook to Help Brands Track Ad-Driven Sales, on Adweek.com. Basically, Facebook is in the process of developing a measurement tool that converts a user’s click on an advertisement and tracks whether this click led to a sale, a subscription, and much more.

How it works?

1. Marketers add a piece of code from Facebook to whichever site pages they want to measure conversions on, be it a checkout page or an email newsletter sign-up page
2. When users click on a Facebook ad that leads them to that page, Facebook will see that the page loaded and count it as a conversion in the marketer’s Ads Manager dashboard

(Source: Adage.com)

Although still in beta-mode, I find this a great addition that Wisdom can leverage. This measurement tool will go hand-in-hand with Wisdom and Microstrategy’s existing capabilities and platforms, giving more of a reason for marketers to look towards data collection. It’s a win-win situation for both groups.Now, marketers will be able to soon see whether their advertisements on Facebook (and its billions of users) will help reduce their costs and increase their ROI. Facebook saw that the campaigns averaged a 40 percent lower cost-per-action than the exact same ads run on a cost-per-click basis. Although a lower cost-per-action, but you’ll gain more value than paying for clicks. In addition, companies can lean towards using Wisdom to monetize and effectively develop advertisements that are geared towards the types of users that are likely to convert, based on the data collection. And for Facebook.. well, they’ll gain the additional advertising revenue.. to their last quarter’s $1.09 billion.