For my “new media marketing” class, I created an active learning exercise with the goal of giving my students a better understanding of how to create, target, and bid for Facebook display ads. During class, I demonstrated how to create a Facebook display ad, including the required image size, the difference between CPC and CPM bids, and so on. Then I introduced the active learning exercise.
I explained that I had created a fictitious web service, and their assignment was to create a Facebook ad to promote the website. I allowed students to spend a very small lifetime budget ($7.50) on Facebook ads — actually running the ads. I framed the exercise as a contest, with the winner being the person who attracts the most consumer clicks to the website with their ad. I gave students complete freedom in terms of how they would target the ads, how they would bid for ad placement, what ad copy they would use, and so on. The only restrictions I placed on students beyond Facebook’s persnickety ad guidelines was that they must follow copyright law as if they were doing this advertising commercially (i.e., no hiding behind a “fair use” exemption because our purpose is educational). I suggested to students that if they needed a photo, they could search Flickr for Creative Commons, attribution-only licences, and I could add an attribution for the photo to the service’s website.
My main reason for created a fictitious web service was to give students a “blank slate,” preventing the influence of any previous marketing strategies or tactics by the firm. I created a web service called “Is it funny?” The service is designed for a person who is considering posting something funny on Facebook or Twitter. For the person who wants to get early feedback on whether their post is actually as funny as they think it is, this web service would provide an empirical “funny score” for the post. The service would anonymously show the post to a group of people as part of a larger research project, and each participant in the study would give the post a rating for “funny,” “confusing,” and “offensive.” The website would combine ratings from all the participants to make the “funny score” and benchmark the score against Tweets from a variety of people including famous comedians. A report that summarizes the results would be e-mailed to the person who purchased the evaluation. As part of my pretesting of the idea, I ran a variety of Facebook ads, and I found the ads did indeed attract clicks from consumers in certain segments.
When students submitted their Facebook ads for the assignment, I was pleased to see they used a variety of approaches. After the ads ran (an average of 42,279 ad impressions per student), I was pleased to see each student attracted clicks (an average of 8.8 clicks per student) and there was large variance in the click-thru rate (max CTR: .032%, min CTR: .002%) and the total number of clicks (max clicks: 14, min clicks: 5). Of course, when I revealed the results to the entire class, we celebrated the two winners who attracted the most clicks (a tie for first place). Then we discussed the learning take-aways for the exercise:
Facebook display ads …
- … allow for highly specific targeting.
- … are scalable.
- … are relatively low in cost (average CPC of $0.75 among all students).
- … are even lower in cost after the most effective ads are identified (CPC of $0.54 for the best student).
- … are highly variable in terms of their effectiveness.
- … are like ads in other media in the sense that the effectiveness of a given ad is difficult to anticipate before running it.
- … are unlike ads in traditional media in the sense that the effectiveness of a given ad is readily apparent after running it (thanks to the detailed diagnostics that Facebook provides on each ad’s effectiveness).
- … require a high enough bid if the ad is to attract placement by Facebook.
In the debrief discussion, we focused on points (5) and (6) because they are the most surprising to students. Even in the best case — when smart people work hard using good theory and good marketing strategy — the ads frequently don’t work as well as we thought they would. This variance becomes evident when we run 50 Facebook display ads, but it is also true of the single ad that we create and run on television. If we had created 50 television ads, and if we could track their effectiveness, we would see large variance in effectiveness there too. Understandably, students find this state of affairs in traditional media unsettling. If John Wanamaker were living today rather than 140 years ago, his traditional quote (“Half my advertising is wasted, I just don’t know which half”) could be more optimistic with the tracking capabilities of new media promotions.
– Eric DeRosia