holiday advertising best practices guide for facebook

The Retailers’ Last Minute Guide toHoliday Advertising on Facebook

4 Savvy Strategies and 8 Quick Tips For Performance Marketing Success

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ITE PAPER

Copyright © 2014 Marin Software Inc. All rights reserved. 2

The Retailers’ Last Minute Guide to Holiday Advertising on Facebook4 Savvy Strategies and 8 Quick Tips For Performance Marketing Success

TABLE OF CONTENTS

Introduction 03

Four Facebook Advertising Strategies for Retailers this Holiday Season 03

Conclusion 08

About Marin Software 09

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INTRODUCTION

For most retailers, the holiday season is the most important time of the year, a timethat can make or break their annual sales objectives. This year in particular, onlineadvertisers have plenty to be excited about as they finalize their holiday advertisingstrategies and begin to nail down the final stages of their execution plans. According to eMarketer, holiday spending is expected to increase by 16.6% in 2014 vs. 20131.However, the lure of additional sales revenue this holiday season is also predicted toattract fiercer levels of competition. eMarketer also reports that retailer advertisingspend will increase by a proportionately higher rate of 20.2%. With so much riding onthe brief but critical two-month holiday shopping season, it becomes more importantthan ever for retail advertisers to ensure they are investing their time, resources, andbudgets in the channels that can provide the best possible ROI.

It is no secret that Facebook has officially become one of these critically importantchannels for retail advertisers. Across Marin’s spectrum of Facebook advertisers,retailers increased spend in the channel by 67% over the 2013 holiday season vs.2012, a testament to the efficacy of Facebook to reach highly targeted, highly engagedaudiences across all stages of the purchase cycle. Retailers are increasingly turning toFacebook to engage with their customers, share promotions, introduce new products,drive traffic to their websites and encourage shoppers to visit their physical storelocations. With annual shopping activity peaking during the months of November andDecember, retailers will again embrace Facebook as a primary channel for buildingawareness of holiday promotions and driving conversion.

FOUR FACEBOOK ADVERTISING STRATEGIES FOR RETAILERS THIS HOLIDAY SEASON

To prepare for the inevitable influx of shopping activity, below are four strategies forgetting the most out of your Facebook advertising dollars during the holiday season:

1. Build a Budgeting Strategy Based on Facebook User Behavior – Every retailer understandsthe importance of Black Friday (the day after Thanksgiving) and Cyber Monday (theMonday after Thanksgiving) as key dates for online shopping. In fact, according toComScore, in 2013, more online revenue was driven on Black Friday and Cyber Mondaythan any other day in the holiday shopping season2. Compared to Black Friday, 42% morerevenue was driven from online purchases in 2013 than Cyber Monday. Most retailers plantheir advertising budgets around these dates and increase their advertising spend justbefore Thanksgiving and continue to increase their spend incrementally, past Christmasuntil the end of December. Because Facebook as an advertising channel and is still in itsrelative infancy, many retail advertisers assume because overall holiday sales are higheston these two days that sales on Facebook will also be highest on these two days. Based on this information many Facebook retailers increase their daily campaign budgets andspend in accordance to expected consumer behavior. The below chart depicts Facebookadvertiser spend over the course of the 2012 and 2013 holiday periods. As expected,Facebook advertising spend begins to increase in mid-November, registers a temporary liftaround Thanksgiving, and then significantly increases around Christmas only to level off

1 http://www.emarketer.com/Article/Beacons-Land-on-Retailers-Holiday-Wish-Lists/10111842 https://www.comscore.com/Insights/Press-Releases/2013/12/Green-Monday-Jumps-10-Percent-to-14-Billion-in-Desktop-Sales-to-Rank-as-3rd-Heaviest-Day-of-the-Holiday-SeasontoDate

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However, when examining Facebook user behavior during the holiday period it becomesapparent that retail advertisers may be missing the mark with their holiday advertisingbudgets from a timing perspective. While overall eCommerce spending trends suggestthat retailers should be investing heavily around the Thanksgiving and Christmasholidays, Facebook ad engagement trends suggest the inverse: that Facebook retailadvertisers may want to invest more before and after the holidays. In 2013, CTRs forretail advertisers on Facebook were relatively high two weeks before Thanksgiving andthen tapered off during the holiday week. While CTR’s increased for a short period rightbefore Christmas, they did not fully revive until after New Year’s Day.

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Source: Marin’s $6 billion global social advertiser index, segmented for retailers

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Source: Marin’s $6 billion global social advertiser index, segmented for retailers

Facebook Holiday Advertising Spend by Day: 2012 vs. 2013Normalized to November 1

Facebook Advertising CTR by Day: November 2013 – January 2014Normalized to November 1

in mid-January. Facebook advertisers have exhibited similar holiday spending tendenciesover the past two years, with the key difference being that advertisers began increasingtheir spend approximately one week earlier in December.

Copyright © 2014 Marin Software Inc. All rights reserved.

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Similarly, retail advertisers experienced the highest volume of Facebook clicks notduring the holiday period, but just after. While advertisers did experience a rapidincrease in Facebook clicks for the three days leading up to Christmas, only after NewYear’s Day did Facebook advertising clicks begin to gradually increase. In general, thehighest volumes of post-holiday advertising clicks occurred in spurts over betweenThursdays and Mondays in January. These trends suggest a clear gap between theassumptions retail advertisers make about Facebook usage over the holiday season andhow Facebook users actually use the platform during this critical time period. Ratherthan investing heavily on days when competition is high and Facebook usage is low,retail advertisers should instead consider investing more before and after theThanksgiving and Christmas holidays. Trends suggest that Facebook usage takes asharp dip on holidays, when users are likely spending time with their friends andfamily. However, retail advertisers still have the opportunity to reach users in earlyNovember before they shift into holiday mode and build awareness for their productsand services, which they could potentially buy on other channels. Also, retailers shouldconsider targeting Facebook users throughout January when people generally haveholiday gift cards to spend.

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Source: Marin global social advertiser index, segmented for retailers

3 http://www.thinkwithgoogle.com/articles/five-holiday-shopping-trends-marketers-should-watch.html

2. Start Early and Sequence Messaging – With the back-to-school season winding down, it’sabout that time of year for shoppers to look forward to the winter holidays. And while itmay seem premature to preempt Halloween with the holiday discussion, according toGoogle a whopping 30% of consumers will begin their shopping prior to Halloween3.Retail advertisers should embrace this consumer trend and begin to plan and implementtheir holiday focused campaigns earlier this year. In addition to getting an early start onthe competition, retailers will have the opportunity to execute a phased approach toadvertising and serve high value prospective customers with tailored creatives based ontheir stage in the buying cycle.

Facebook Advertising Clicks by Day: November 2013 – January 2014

Normalized to November 1



This approach, commonly referred to as sequential messaging, involves selecting specificaudience segments (i.e. “existing customers”) and targeting them over a finite amount oftime (i.e. October 15 – January 15) with “sequenced” messages that change frequentlywith the goal of pushing prospective customers further along the buying cycle. Forexample, a retailer advertiser looking to begin their sequenced messaging campaign inmid-October could first target customer lookalikes with an attention grabbing video pagepost that depicts customers using the product. In early November, the retailer could targetthe same audience with a consideration stage message that features the benefits of theproduct vs. the competition. Then, in late November when customer purchase intent ishigh, the retailer could switch to bottom of the funnel messaging with a compelling call toaction and price incentives designed to drive conversion.

3. Target Based on Buying Intent – With so many advertisers vying for the attention ofFacebook users during the holidays, it will be critical for retailers to ensure their ads catchthe attention and interest of users who are most likely to purchase their products. One wayto accomplish this is to target users who have the demographic characteristics of thosewho are likely to buy or from those who have exhibited behaviors that are characteristic ofthose who typically buy. Retailers have numerous ways to target holiday shoppers onFacebook based on their buying intentions:

a. Search intent based targeting – Keyword search history reveals a wealth of informationabout the products that shoppers are likely to buy and can be a very effective basis forreaching potential buyers on Facebook. For example, a retailer like Macys.com canmine their product portfolio to determine the products that drove the highest ROIduring the last holiday season. They then can create Facebook Custom Audiences thattarget users who have previously searched for these high ROI products in Google orBing.

b. Behavioral targeting – As holiday consumers begin to shop for products in the comingmonth, it is likely that your website will receive a healthy uptick in traffic. That’s thegood news. The bad news is that an average of 98% of website traffic doesn’t converton the first visit. Retailers should use a retargeting platform that buys on the FacebookExchange (FBX) to re-engage with website visitors on Facebook based on their stage inthe buying cycle. Retargeting platforms like Marin have the ability to use product feeddata to dynamically serve creative to Facebook users based on the product that waslast viewed. As a first step, retailers should use the coming month building FBXretargeting lists like “all visitors,” “product page viewers” and “shopping cartabandoners.”

c. Demographic based targeting – From an advertising standpoint Facebook is consideredto be one of the most effective channels for reaching users based on demographiccharacteristics like age, gender, education, income and interests. However, advertisersmany times base their demographic targeting on Facebook on assumptions about theirtarget rather than real buyer data. As a first step, retail advertisers should mine theircustomer databases and determine the demographic characteristics of last year’sholiday buyers. Use this information as a starting point for building out yourcampaigns. In addition, retailers can use DMP’s like BlueKai and Aggregate Knowledgeto determine high LTV audiences based on data that goes outside of Facebook’s“walled garden” of Facebook-only data.

d. CRM based targeting – Most retailers will agree that in general, your most loyalcustomers are your most profitable customers. In fact, according to the US Census

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Bureau, on average repeat shoppers have a 23% higher gross margin than first timebuyers and spend an average of 9% more4. With this data in mind, it seems logicalthat retail advertisers should first and foremost focus on reaching last year’s holidayseason customers. Fortunately, Facebook makes it quite easy for retail advertisers toreach previous customers on their platform. Simply create a Custom Audience basedon you 2013 holiday season customer list, which you can upload from your CRM inminutes. If possible, segment your Custom Audiences based on the average value oflast year’s customers. Target last year’s top purchasers with a tailored message thatencourages them to purchase again this season. After the holidays, you can also buildlookalikes off of these user groups to expand reach Use Custom Audiences to target giftcardholders and inspire them to shop as well.

4. Embrace Mobile – According to a 2013 research study from Deloitte, 68% of shopperswere forecasted to use smartphones last holiday season, and 63% of tablet ownersplanned to do the same5. As the data suggests, mobile and tablet devices are increasinglybeing used by consumers to research, compare and purchase products during the holidayshopping season – From searching for products during their work commute, to comparingproducts while at physical store locations, to purchasing products while “on the go.” Morethan ever, retailers must ensure that their holiday campaigns are reaching customers onmobile and tablet devices throughout the purchase cycle. With 50% of its 1.3 billion userbase accessing the platform via mobile devices every day6, Facebook presents arguablythe best opportunity for retailers to engage with mobile shoppers during the holidayseason.

Facebook offers retailers two primary means for reaching advertisers on mobile devicesover the holiday season: Mobile App ads and mobile-formatted Page Post ads. Bothcreative formats look fairly similar to Facebook users. Both creative types blend intoFacebook’s native mobile newsfeed experience, feature large images, and customized callto action buttons. The primary difference between the two is the landing page experiencesthe ads present to holiday shoppers. However, with Mobile app ads, retailers can drivecustomers deep into the mobile app experience while Page Post ads drive the user to themobile website. Retailers should analyze their customer’s buying tendencies (i.e. do mostcustomers purchase on mobile devices or mobile web pages?) and select the creative thatis most appropriate. Regardless of the creative type selected, there are some commonmobile advertising best practices that retailers should keep in mind over the holidays:

e. CTA Buttons: Customize call to action buttons based on what user activity you’reencouraging (downloads, purchases, gameplays, etc.)

f. Deep Linking: Direct users to a specific section or product page of your app that ismost tailored to the creative and audience buying intentions

g. Image Selection: Avoid stock photos if you can. Mobile users expect mobile Facebookads to appear “native” to their social experience and should appear as if they belongalongside other posts from family and friends.

h. Video: Leverage video assets during the awareness phase of your campaign to catch theattention of users. When using video-based creatives, make sure to target WIFI-onlyusers.

4 http://www.practicalecommerce.com/articles/61531-Ecommerce-Profitability-The-Critical-Second-Sale5 http://www.forbes.com/sites/stevecooper/2013/11/14/studies-predict-a-mobile-2013-shopping-season/6 http://files.shareholder.com/downloads/AMDA-NJ5DZ/3461874457x0x770377/abc6b6d4-df03-44e1-bb4d-7877f01c41e0/FB%20Q2%2714%20Earnings%20Slides%2020140722%2012p.pdf



CONCLUSION

Preliminary forecasts for the 2014 holiday shopping season suggest while consumerspending is expected to increase this holiday season, advertising spend is expected toincrease by a proportionately higher rate. In other words, this year retail advertisers willneed to focus more closely than ever on making every advertising dollar count throughstrategic, well-calculated audience targeting. As an advertising channel, Facebookpresents a tremendous opportunity for retailers to reach an expansive pool of 1.4billion+ highly engaged potential buyers. To be successful this holiday season, retail-centric Facebook advertisers should consider launching their holiday-themedcampaigns earlier than last year, pay attention to key dates between November andJanuary, embrace mobile advertising and use an advertising platform like MarinSoftware that can reach potential customers based on their purchase intentions usingdata collected across multiple channels, platforms and devices.


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ABOUT MARIN SOFTWARE

Marin Software Incorporated (NYSE:MRIN) provides a leading cross-channel advertisingcloud for performance marketers to measure, manage and optimize more than $6 billion inannualized ad spend across the web and mobile devices. Offering an integrated SaaSplatform for search, display and social advertising, Marin helps digital marketers improvefinancial performance, save time, and make better decisions. Advertisers use Marin tocreate, target, and convert precise audiences based on recent buying signals from users’search, social and display interactions. Headquartered in San Francisco, with officesworldwide, Marin's technology powers marketing campaigns in more than 160 countries. For more information about Marin's products, please visit:http://www.marinsoftware.com/solutions/overview.

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holiday advertising best practices guide for facebook

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