How brands can cope with a 24% increase in social-media ad costs

Facebook has been warning advertisers that it is running out of space to show ads in the News Feed. Following the announcement of its first-quarter earnings report, the company said that it would stop increasing the frequency of marketing spots in the News Feed to avoid driving away users.

In July 2017, along with the Q2 2017 performance report, the company announced a continued decrease in the growth of the number of ads. On top of that, the average cost for Facebook ads has increased sharply, by 24 percent.

With Facebook's mandate to ensure the platform places user experience ahead of its role as an advertising platform, the cost of Facebook ads is likely to continue increasing.

The company has stated that ad load won’t be a significant contributor to revenue even after this year. According to the COO of Facebook, Sheryl Sandberg, rather than focusing on quantity, the company is more focused on improving the quality of ads and targeting the messages to make them more valuable. 

This is aligned with what Facebook wants to achieve with its News Feed. From day one, Facebook has always asserted its “goal with News Feed is always to show each individual the most relevant blend of stories that maximizes engagement and interest” and to keep them on the platform for as long as possible.

To adapt to the changes in Facebook ads, as a brand or agency, you have one of three options:

1. Increase your ad budget by at least 24 percent while accepting no uplift in performance. This is unrealistic.
2. Maintain your budget but expect a reduction in performance. This is not acceptable.
3. Deliver operational efficiencies with your Facebook media investment and improve content engagement with the objective of over-delivering on performance.

Clearly, most advertisers would consider the third option the most cost-effective way forward. After all, as Albert Einstein once said “We cannot solve our problems with the same thinking we used when we created them.”

Here is how you can achieve this.

1) Understand your audience segments 

To ensure that your posts can continue to have strong organic performance and lower ad costs, the first step is to start putting your audience at the heart of your social-media measurement and content strategy. 

“Know your audience” is really the first lesson all marketers learn. Yet, it is often something which is forgotten in practice.

Many social-media marketers today do not really understand who they are interacting with on social media beyond generic statistics like age and gender. They are posting generic messages hoping they will resonate with all audience segments, when in reality their audience is way more complex than can be defined purely by age and gender.

Rather than improving their own understanding of the audience, many marketers are blaming the platform for poor engagement. The truth is, if you don’t even know who the people engaging with you are and what they like or want, then how are you even going to create content that they engage with or would share with their friends? How are you going to keep them loyal to you?

By studying what other pages your audience engages with on Facebook, we can group its members into different segments accordingly, to answer questions such as:

• What are the audience segments engaging with my brand?
• What kind of personality do they have?
• What type of topics do they engage with the most?
• Is my target audience really the group which I’ve been engaging with?

More importantly, we can also answer important questions about the audience and its preferences: What other brands does my audience like beside me? Does my audience like any other types of movie, celebrity, sports brands or electronics brand?

It is a well-known fact that human beings like those who are similar to them. So, by talking about common topics and aligning your interests with those of your audience, you can easily build an affinity, relationship and loyalty in the process. Brands can then use these insights to talk about or affiliate themselves with the things which their audience likes.

2) Retain your audience and build a strong community

Most brands are spending heavily on social media to get engagement on their posts. No doubt, engagement is a highly useful metric when measuring social media performance.

However, once you’ve gotten your audience engaged with your brand, the next step is to understand how you can sustain their interest. After all, when you promote a piece of content to acquire engagement, is it really meaningful if someone engages once but never comes back again to interact with you?

Unfortunately, that is the case for many social-media advertisers. Money is spent to acquire an engager. However, he or she never comes back again to engage after liking one post. The brand has to spend money again to acquire a new engager, and the story repeats itself.

Wouldn’t it be more cost effective to focus on growing a loyal base of followers who would keep liking what you post on their own?

To do so, marketers need to start focusing on repeated engagement.

This metric tells you how well your content truly resonates with your audience in the long term and is proof that your content and brand resonates with them. After all, when you have an interest in a particular brand or celebrity and what they have to say, don’t you keep coming back to their page again and again to interact with them?

Repeated engagement is a clear indicator that you’ve built a strong and loyal community: Many marketers believe that engagement is enough to tell how loyal one’s community on social is. That is untrue. The best way to measure how strong your community is on social media is to look at repeated engagement. After all, how can marketers claim to have built a loyal following and a strong community if most people in it only engage with them once?

To track repeated engagements, brands can study their audience over a six-month period to understand how many one-off engagements there are versus repeated engagements. It is also meaningful to compare this with competitors.

In this sample report, you can see the Brand A’s engagement is driven heavily by unique likes. Out of all the engagement they received, a mere 13.9 percent represented repeated engagement.

What does this mean for the brand? This shows that they are the least capable of all the beauty brands listed of retaining their audience’s interest. This means that their content has not been effective in attracting most of their audience back to their page to engage with the brand again.

In the case of Brand A and D, if you look at superficial engagement metrics, it seems that all is well for this brand, and that it has built a strong community. However, a deeper look at unique engagers and how they interact with the brand tells an entirely different story.

Contrast this to Brand B, where 60 percent of engagement is driven by repeated engagements. This shows that this brand has really built a strong community of loyal fans who repeatedly engage.

Once a brand finds out how engaged its community is, the next steps would be to identify specifically which posts can retain their attention. With this data, the brand can then replicate its success and keep its core audience coming back for more.

3) Boosting your top performing content

In addition to improving content to make it retain audience segments, brands can also take a closer look at their paid strategy on social media to ensure they get the most out of every dollar they spend on ads.

To maximize ad spend, brands can spend more budget on their best-performing posts. When a post performs well organically, it is highly likely that the content resonates with the audience, and since it meets Facebook’s objectives, the ad cost to promote this post will be much lower than another piece of content in which the audience is hardly interested.

Some marketers believe that money should be spent on posts which are performing poorly to improve their performance. However, why would you want to boost a post that doesn’t resonate with anyone? Not only is it much more expensive, you also risk your audience giving you negative feedback and unfollowing you.

Brands should also include metrics like negative feedback and relevance score in their reporting to ensure that their ads are resonating with their audience. Monitoring trends in relevance and ad costs can help brands to easily identify the factors that help them achieve strong ad performance—and to repeat their success.

Up to this point in the development of social-media marketing, marketers have always been focused on metrics about the brand: How much fan growth did I get? How much engagement did I get? How much reach did I get?

The News Feed is filled with so much content from brands—way more than consumers want to see. It is no surprise that consumers are not engaging as actively and are even tuning out by blocking ads. A recent study showed that the largest geographical driver of mobile ad blocker use has been in the Asia-Pacific, where 94 percent of mobile ad blocking takes place.

Imagine you’re at a party and meet a guy and give him your number. The next day he begins to spam your phone to show off about himself and try to earn your approval. All he talks about is how great he is and the latest events he is attending. And to make matters worse, he shares corny quotes about how life is beautiful or to wish you a great Monday. Isn’t that exactly what most brands are doing? 

Contrast this to a guy who asks you questions about yourself, who has much more in common with you, who helps you to solve problems, and who talks about topics that are relevant to you.

Everyone would want to engage with the second guy and to learn more about him. To be like that, brands have to move away from focusing on just measuring their own reach, fan growth and engagement and really put their audience at the centre of their social-media measurement.

To truly stand out from this clutter on the News Feed and to win over your audience, you first need to start off with a deep understanding of your audience segments: their personalities, what they like, how much each unique audience engages with you versus your competitors, and what type of content will keep them coming back.

From these answers, brands can then craft a data-driven content strategy to align with what the audience wants to see and engage with, rather than just talk about themselves.

Jeraldine Phneah is the regional account manager at Socialbakers. Earlier this year she was named a rising star at Campaign's Women Leading Change Awards, in part for founding Creatives for Causes.