Blog Post

17 December 2013

Facebook Custom Audiences Offers Offline Sales Measurement

Retailers with custom audiences may now start to measure offline sales through Facebook.

The social network said its new measurement tool called Custom Services allows brick-and-mortar store owners to track in-store sales driven by Facebook advertisements.

facebook custom audience

photo credit: trekkyandy via photopin cc

After a business buys Facebook ads, it must send data about the products and services bought offline by consumers to Facebook. And then the social network will conduct a study and provide relative figures on how many people saw the ads compared to those who did not.

To explain further, Custom Audiences determines the number of customers stirred by Facebook ads to visit physical stores compared to those who were encouraged to visit by other means.

Facebook VP of Ads Product Brian Boland said it is the first time that digital exposure is linked to in-store sales at this level for anyone with a customer relationship management (CRM) system. The social network had done private tests for Custom Audiences with select advertisers. Now any advertiser that buys ads from Facebook’s own sales team can avail of the service.

How It Works

Here is an overview on how the targeting tool works:

The business lists the email addresses of its existing and potential customers. It submits the list from its CRM system to Facebook through Custom Audiences in an encrypted channel. And then it advertises to the Facebook accounts of the people in the list.

A listed customer buys at the business’s physical store and resubmits his or her email address, or swipes a loyalty or credit card. Now the business can pair the previously and newly submitted email addresses. Then it submits the hashed version of the data to the social network. And then Facebook compares the number of people who saw the ad and bought at the store against a control group. The control group consists of Custom Audiences the company did not show ads to. Then Facebook delivers a report on its findings to the business.

The Impact To Marketing

Let’s say an advertiser or marketer finds out those consumers who saw the Facebook ad bought or spent more than the control group. If this trend continues, it is best for the business to buy more Facebook ads. If the business conducts several of these tests, it may determine the type of ads that had the most sales. Then it can stop the inefficient ads and bank on the effective ads.

Mobile advertising will make the most out of Custom Audiences; the targeting tool helps measure the ROI of impressions. Mobile devices have limited viewing space. Though it can perform multiple tasks, the small screen is harder to handle compared to multitasking and switching among multiple browser tabs on desktops. This problem escalates when dealing with ads. Clicking ads on mobile devices often opens new full-screen windows and disrupts the flow of tasks. This may deter ad clicks on the platform.

A purchasing decision does not necessarily rely on mobile ad clicks. As said earlier, mobile ads often fully covers the available viewing space of phones and tablets. Though mobile ad views are short-lived, the human brain will save some information about the ad. Later on, you may remember it and visit the physical store to purchase an item. Facebook Custom Audiences may help highlight and quantify the connection.

As expected, Facebook will earn more ad revenue from its new targeting tool. After businesses determine the cost-effectiveness of Facebook ads through metrics from Custom Audiences, they will have more confidence in the platform. For any advertiser, ad performance measurements are valuable. And it means investing more on Facebook ads.

Some consumers may highlight privacy issues yet again. But Facebook assures that Custom Audiences is encrypted. And that it deletes sales data after the report is delivered.

Nonetheless, most Facebook users reserve most of their hate on lousy ads that digress from the subject. Measurements provided by Custom Audiences may help reduce the probability of irrelevant ads popping up. Think about this: Real data about effective Facebook ads will lead to well-targeted, relevant ads on the platform. If positive results continue, the more targeted ads will be and the less often irrelevant ads will appear.

It’s easy to argue that ads bring clutter and are disruptive. But online service providers such as Facebook, Twitter, and Google rely on ad revenues to continue offering free services. Nothing is free in this world. We avail of free services from Internet companies; they get valuable information from us through ads.