Like everyone at this time of year, we’ve been taking some time to sit back and reflect on all of the changes over the past twelve months, as well as looking ahead to what awaits us in the New Year.
While others may offer meaningless platitudes about what’s occurring in digital advertising, our team of experts offers their reflections as to why things were big this year and what they predict for 2017.
Reflecting On Digital Advertising in 2016
VIDEO GOES VIRAL
2016 will go down as the year of video. While using video ads for social marketing began in 2015, it wasn’t until this year that it really caught on for direct response.
Matthew Pacheco, Director of Ad Optimization, was surprised by how much video took off as a way to drive new customer acquisition on social. When our team tested video back in January, it flopped. Pacheco believes it was Facebook’s addition of website conversion optimization for video that sparked the boom of this ad type.
Michael Skehill, an Ad Optimization Specialist, agrees that it took changes to Facebook’s ad platform encouraging video use by advertisers to see the benefit to their bottom line.
Social advertising was already moving towards greater video consumption as a way for brands to communicate with their user base, and Facebook’s translation of that movement into a direct response advertising format was the next logical step.
The results speak for themselves when it comes to the ascendancy of video ad campaigns across a variety of verticals.
For Hallmark eCards, launching new campaigns with a 30-second video slashed their acquisition costs by almost 70%!
Other e-commerce clients also saw significant results from video ads. On average, they enjoyed a 175% return on ad spend, a 25% average reduction in CPAs, and a 52% average decrease in their CPCs.
CANVAS CAN’T SEEM TO CONNECT (YET)
As surprising (or not) that the immersive experience of video has seen so much success for DR, it’s equally surprising that Facebook’s Canvas ads didn’t follow the same trajectory.
When asked, Skehill surmised that it’s because Canvas ads currently act more as a branding exercise than a direct response advertising format. He foresees that it will require some out of the box strategizing for brands to translate Canvas into a more direct response approach.
Our Director of Creative, Simon Gee, also believes part of the flaw with Canvas ads is it’s exclusively available for mobile. Since most companies advertise across a variety of devices, this limitation can be a hindrance. He agrees with Skehill that Canvas is better utilized as a branding tool for now.
Luckily for the Canvas fans, there is a precedent that proves a transition to direct response success is doable.
One of our clients broke the assumption that long form videos don’t work for increasing conversions and sales. By utilizing a 3.5-minute video that played to the emotional appeal of their brand (a complete departure from conventional DR best practices), they were able to see a massive growth in their return on ad spend.
Canvas could get to this point as well, as it’s a format allowing brands to truly connect with their users. However, they will need to “find the sweet spot between the most efficient way to communicate their product and establishing a connection with their users, ” says Skehill.
SOME TYPES OF BIDDING GENERATE GREATER BANG FOR YOUR ADVERTISING BUCK
2016 will also be known as the year that automatic bidding became more widely used, and Facebook introduced average cost bidding as a viable bidding option.
Hunter Jones-Volpi, Ad Optimization Specialist, shared that automatic bidding allows for some brands to discover the actual costs of ad delivery to qualified customers without having to waste money on additional testing.
Facebook can determine the actual costs to reach the users you want to get in front of so that you can get consistent delivery out of these segments without wasting time trying to determine the costs.
Described as “matching the right bid to the right budget,” Jones-Volpi has seen first hand the cost savings that automatic bidding can provide.
AVERAGE COST BIDDING
In addition to automatic bidding, Matthew Pacheco also touts the addition of average cost bidding to Facebook’s bidding choices this year.
Average cost bidding allows you to bid closer to your final cost, finding an “average” across the range of bid prices instead of tapping out via maximum cost bidding. This is highly beneficial to your bottom line since average cost bidding exposes you to a wider audience than a maximum cost bid campaign.
As Pacheco describes it, “In average cost bidding, your bids get more aggressive when your costs are low. When costs increase, your bids go down and limit your exposure to inefficient traffic.”
PPC REMAINS MAJOR PLAYER
In case you think that it’s only social advertising that’s seen significant changes in 2016, we also saw display ads and YouTube became stronger options for direct response advertisers. Google Adwords continued to add more features and better targeting options for their users.
For display ads, David Isman, Director & GM of Paid Search, specifically mentions the addition of responsive ads by Google.
Responsive ads allow you to provide Adwords the image and text of your ad, and they will fit that into the specifications of every ad type. What’s particularly interesting is that the image dimensions required are the same ones for Facebook ads. Isman sees this as both Google trying to compete with Facebook regarding targeting and creative as well as further proof that search and social advertising are intertwined and mutually beneficial to each other.
2017 Predictions For Digital Advertising
Heading into 2017, it’s hard to believe that we’re almost two years past the “Future” that Marty McFly foresaw back in 1985. Not to mention, with the Cubs winning the World Series and the Cavaliers giving Cleveland their first National Championship in 52 years, 2017 has some big shoes to fill.
Thankfully, we have a digital advertising future that would have been hard to imagine just a few years ago but now teems with almost limitless with possibility.
PPC WILL MOVE FROM BRANDING TO BIDDING
While it might not technically be considered “bidding” in the same way that Facebook ad bidding occurs, Isman predicts that display ads and YouTube will become even greater tools for direct response advertising.
As much as they saw growth in 2016, they are still dominated by their use as a branding tool. He foresees that in 2017, display ads and YouTube will develop even better targeting options for users, and finding your best audience will become easier. Audiences will also be pleased since they will see more relevant advertising instead of generic ads.
The one downside of all of this is that costs are likely to increase as there will be an influx of more ad buyers. Luckily, the benefits of more efficient spent toward more targeted audiences should outweigh this possible detriment.
VIDEO VIEWS WILL BE VITAL INFORMATION
Michael Skehill predicts that video sequencing will be the next big thing for getting the most out of your Facebook video ads.
Sequencing video creative was a must-have in 2015 to gain traction with video advertising, but the increased effectiveness of the ad type meant this practice waned a bit. As video continues to become more competitive, this sequencing strategy will return full circle.
Skehill envisions plans to use engagement tools via the client’s Facebook pixel to exclude people who have already engaged with one type of video from a brand, while still keeping them in prospective audiences. Determining that they’ve viewed or engaged with the content while letting them remain in that audience pool is critical since it gives you the ability to show them fresh content.
That will then translate into guiding them through the conversion funnel for the brand.
Being able to sequence views in this way means users won’t become burned out by repetitive content. Instead, engagement rates should remain high and greater conversions will follow.
FACEBOOK WILL FIND A WAY TO MONETIZE LIVE VIDEO
Stephen Plesko, a Senior Ad Optimization Specialist, forecasts that Facebook Live will see the same explosive growth video did. As there is a continued push towards a more immediate interaction between brands and their customers through live video, finding a way to introduce advertising won’t be far behind.
As Facebook users spend 3x as long watching a Facebook Live video versus regular video, there’s no doubt this extended viewing time will motivate Facebook to find a way to offer advertisers a portion of the pie. The most obvious application could be pre-roll video ads, as the setup for such creative largely exists already.
So what does all of this information mean for you?
Here are 4 practical takeaways:
There’s a video bandwagon for a reason.
- The returns have been epic, and the video doesn’t have to be fancy for fantastic outcomes.
- If you haven’t taken the leap into using video in your social advertising, you’re missing out on a boon to your bottom line.
Don’t write off new ad formats just yet.
- Even though Canvas Ads haven’t taken off the way video has, there is nothing to say that they won’t do so in the future. We suspect the opportunity right now is foremost for e-commerce products and secondary for lead gen/services if you can showcase the creative in a first person/hands-on kind of way.
- If you don’t want to invest in testing Canvas until it’s more proven, keep an eye on new ad formats so you can take advantage of their benefits to stand out in the News Feed amongst more familiar formats.
Try different bidding formats.
- As the famous quote says, “Variety of the spice of life.”
- Testing different bidding types on Facebook can lead to getting greater returns out of your ad spend.
- Some brands have seen massive success with average cost bidding or automatic bids, while others have not. You’ll never know until you try, and you don’t want to be leaving money on the table because you’re unwilling to take that chance.
Search and social are continuing to be more and more intertwined.
- Facebook keeps attempting to keep up with Google AdWords and vice versa.
- Research has found that the average order value increased 24% and the return on ad spend increased 78% when you combine paid search with Facebook advertising.
- Google (Alphabet) and Facebook are like the two popular girls in high school who keep trying to one-up each other with their clothes and friends. And unlike high school, we all benefit from this competition, since they will continue to seek to out-innovate each other.
- Use their combined powers to see a boost to your bottom line.