Profile: Sir Charlie Mayfield

John Lewis Partnership Chairman

Facebook to launch ROI tool

Facebook is introducing a tool to help marketers improve how they measure ROI of ads running on the social media site.

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Facebook’s first brand campaign launched earlier this year.

The improvements will help marketers better understand how their ad campaigns drive online actions and also help brands improve future campaigns, the social network claims.

It will be part of Facebook’s Ads Manager platform and will count user actions beyond Facebook generated from ad clicks within the network.

Advertisers will also be able to use optimised CPM (cost per mille) bidding to serve ads to users who are more likely to convert on a business’s site.

Advertisers use the tool to create a line of code to include within the pages of their website they want to measure, such as a registration page or a transactional check-out page.

When users that have previously clicked on or been served the relevant Facebook ad, load the pages it is counted as a conversion from the Facebook ad.

Marketers can then see how many people clicked on or viewed their ad and went on to carry out the desired action.

A number of advertisers have been testing the tool in beta and found that ads bought using optimised CPM had around 40 per cent lower cost per action (CPA) than ads bought using CPC (cost per click) bidding.

Fab.com a US based homewares retailer reported a 39 per cent reduction in cost per action using the tool, Facebook says.

The self-service conversion measurement tool is due to launch globally later this month.

Facebook says “Measuring ad effectiveness is crucial for all types of marketers, and the goal of this highly requested feature is to help direct response marketers better understand how their ads are doing and how to make their campaigns work even more effectively.”

The move is one of several Facebook is making to respond to marketers’ calls for more information and data to prove how Facebook advertising returns a commercial benefit.

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