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Online marketing

Lightweight interactions – how people build relationships and what marketers can learn from it

Relationships between people evolve over time through many lightweight interactions. You meet a new girl through common friends, you greet, but you don’t notice her name, as you are busy presenting yourself. A brief conversation takes place before you’re interrupted or run out of topics to talk about. You meet her again through your common friends, you talk some more and learn that you have a common interest, skiing. Meanwhile you desperately hope that someone will address her by name before you end up in that awkward situation where it’s revealed that you don’t know. Next time you meet her you’re skiing together with your circle of friends and the time after that you’re skiing just the two of you. A relationship is built through multiple lightweight interactions.

I would argue that relationships between people and brands are most effectively built in the same way. Lightweight interactions over time.

Many brands have built great relationships with their customers, but as tools and channels have been limited, they’ve done it in what we today must consider to be hard way. Relationships have been built through one-way communication pushing a specific message, optimizing based on reach and frequency. Time specific campaigns placed at strategic weeks throughout the year. It worked and still does, no doubt about it, but it’s heavyweight and far from how humans build relationships. With the rapid emergence of new marketing channels I’m convinced that brands would benefit from moving away from a heavyweight, campaign focused, one-way communication and adapt an approach with more frequent, but lighter interactions similar to how we as people interact.

First, our perceived lack of time suggests that we don’t have time for heavyweight anymore. We evaluate what we choose to do (or see) based on time commitment. Everything else equal, the lower the perceived time commitment, the more likely you are to capture the consumer’s attention and get your message across. So instead of creating immersive experiences where the consumer have to commit tens of seconds (or even several minutes) of their time, how about dividing that experience up in smaller chunks and ask for a few seconds multiple times over a longer period of time? This way you are able to reach the same person several times with different stories that are 1. less intrusive 2. closer to how individuals communicate. You ask for less (each time) and get more (combined).

An individual’s purchase process is complex and most often demands multiple touch points before a purchase is made. Whether it takes 5 or 10 or 20 touch points on average will depend on what you’re selling and how well you take care of the attention you get at each touch point. But no matter what you’re selling, frequency matters. That doesn’t mean you have to repeat “I’m better than my competitor” 10 times over. Instead, try to tell different stories that convey the same fundamental message that you want to get across. Same message, different wrapping.

I’m not saying that people don’t want experiences that capture their attention for a longer period of time. I’ll be the first person to say that I love a good distraction during my workday even though it messes up my focus. Big heavy pieces of content that engulfs my time. A heavy app, or an extended video commercial, a good blog post or perhaps even an advertorial. And I’m not even going to attempt to take a jab at TV. It works, period. So at Venture Factory we do this as well. We build apps, run advertorials and we’ll probably do TV eventually. However, with limited resources we’ll always prioritize or efforts where we believe we can get the most out of every dollar and every hour at the office. And that’s by spending the majority of our time creating lightweight interactions.

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Facebook

How to use demographic targeting to structure your Facebook campaigns

This is a repost of an article first published in the April issue of the Nordic “Facebook Download” newsletter. 

Real identity is central to the Facebook user experience. It also offers you, as a marketer, a unique opportunity to target the right message to the right person at the right time. To think about targeting in conjunction with campaign structure can be a powerful, but simple way to increase performance.

Let’s say your target audience is M/F 20-40. You could set up one campaign targeting M/F 20-40, however dividing the audience up in multiple campaigns will in almost every case give you better results. Why?

First of all, creatives that resonate well with females 20-30 will most likely not resonate as well with males 30-40. Dividing the audience up in multiple segments gives you the opportunity to tailor your message to the right audience.

Second, it gives you more control over where your impressions are delivered. Without segmentation our system will optimize to give most action for your budget and you might end up delivering a disproportionate large amount to one part of your audience compared to your preferences.

Finally, multiple campaigns makes it easier analyze the results while the campaign is running and optimize by reallocating budget between the campaigns.

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But why can’t I just set this up within one campaign?

Our system is built around optimization and therefore ads within the same campaign will never get equal amounts of impressions. The ads are optimized against each other and budget is spent on the ads our system identifies as the ones giving the best results. So if you were to target ads to different segments within the same campaign, you will most likely end up with one or two of your ads getting the majority of the impressions.

In this example we used age and gender as the base for our structure, but the same principle applies if you use geo-targeting, interest targeting etc. The key to remember is that ads within the same campaigns should always have the same targeting.

This is a repost of an article first published in the April issue of the Nordic “Facebook Download” newsletter.

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Facebook

Bidding on Facebook – a guide

Should I use CPC, CPM or Optimized CPM? If I use Optimized CPM, should I leave it at default or manually set the bids? If you ask yourself these questions when advertising on Facebook and you’re not quite sure, read on. I’ll explain what the different bidding strategies actually mean and what you should use when.

When you advertise on Facebook, you take part in an auction system where you compete with other advertisers to get your ad delivered to the users you want to reach. The nature of an auction system is that prices reflect the demand. How you bid and what you bid is therefore critical to your success. That being said, prices are also being determined by dozens of other variables, a topic of it’s own that I’ll write about later. Here we’ll focus solely on bidding.

CPC (cost per click) is together with CPM (cost per 1000 impression) the most typical way of buying advertising online, and what most advertisers are comfortable using. When you choose to bid on CPC, you pay per click and Facebook’s auction system will optimize its delivery to give you clicks at the lowest price possible within your bidding range.

When do you use CPC?
- When your goal is conversions on a URL outside Facebook, and you don’t have Facebook’s conversion tracking pixel installed.
- When your goal is conversions and Facebook’s conversion tracking pixel is installed, but your target audience is under 500 000 people.

The auction system is based on CPM-prices and even CPC-bids are eventually translated into CPM-bids in the back-end of the system. The difference between the two is that when bidding on CPC, the system optimizes for clicks and you pay per click, while when bidding on CPM the system will optimize to give you the cheapest possible impressions within your target audience and you pay per 1000 impressions. As a by-product you will of course get clicks, but your impressions are delivered to users less likely to click and thus you should expect fewer of them.

When do you use CPM?
- When your goal is reaching as many users as possible with your ad and clicks and engagement is second priority.
- When you are using Facebook’s Custom Audiences to target your CRM data. You’ve already filtered Facebook users to find the users most likely to click (or more importantly, convert), so there is no point adding another layer of segmentation/optimization.
- When you want to reach all your fans or all users in a small target audience (>50 000 users). Same rationale as the point above.

Optimized CPM (oCPM) gives you the opportunity to prioritize your ad delivery based on Clicks, Reach, Social impressions and Actions. The auction system will then deliver your ads against these goals in the most efficient way possible. In my opinion, the most beneficial way of looking at oCPM is to only focus on Actions, and ignore the rest. Most advertisers just won’t have the need to balance delivery based on these four variables. If you want to optimize for clicks and reach, use CPC or CPM. Social impressions (a friends name associated with the ad) is a great ad-on, but not something you would want to optimize for at the expense of the three others.

There are many different kinds of actions: Likes, comments, photo views, video plays ect. And of course the most important action in most cases, conversions. With oCPM you can choose to optimize towards any of these actions specifically. So if you’re goal is i.e. conversions, choosing oCPM is often the way to go.

As oCPM tries to deliver your impressions to the people most likely to take the desired action within your target audience, there is one issue you should be aware of. oCPM needs a large target audience as a basis for the optimization, so you can’t target too narrow. Facebook defines this as >1 000 000 users. If you’re operating in a small market like i.e. the Nordics, that’s a large portion of the total users and there might not even be enough users within you’re specific segment. Fortunately, in practice, oCPM do work with smaller target audiences. If you’re optimizing towards actions on Facebook (likes, video plays etc.), I’ve seen oCPM work with most audience sizes. If you’re optimizing towards conversions off Facebook, I’ve seen good results down to 4-500 000 users.

When do you use oCPM?
- When your goal is engagement (likes, shares, comments, video plays, photo views etc.).
- When your goal is likes on your Facebook page.
- When your goal is conversions. You’ve installed Facebook’s conversion tracking pixel and your target audience is larger than 500 000 users.
- If you’re using oCPM and struggling with few impressions being delivered or your budget is not being spent, switch to CPC. Your target audience is either too small or your budget is too high to deliver conversions/actions.

Default or manual configuration?
- If you want to optimize towards conversions and know what you’re willing to pay per conversion, configure your bid manually.
- If you want to optimize towards conversions and don’t know what you’re willing to pay, leave it at default configuration (meantime figure out what you’re willing to pay and then switch to manual configuration)
- If you’re after engagement on Facebook, you’re in most cases well off by leaving the bid at default.

What should you bid?
Your true value. Meaning, set your bid as high as you can based on what will maximize your profits. Never trust the suggested bid range. It’s just an estimate and not accurate, but most importantly you should care about what bid maximizes your profits, not what Facebook suggests. If you know you’re willing to pay maximum $20 per conversion, set your bid manually with oCPM at $20 (conversion tracking pixel installed). If you’re bidding on CPC, figure out how many clicks it takes on average to get a conversion and set your bid accordingly. If it takes 20 clicks, then set your bid at $1. And if you’re in a position to do so, account for assisted conversions in your calculations as last click attribution is not the way to go. Don’t push your bids way below what you’re actually willing to pay. You’re only missing out on delivering impressions towards valuable people that you want to reach.

Following these suggestions will have a significant impact on your Facebook advertising. There’s however two things I want to make clear. First, this guide is somewhat simplified and does not take into account all aspects of bidding on Facebook. It is however more than extensive enough for most advertisers. Use it as a basis for testing to figure out what works best for you. Secondly, this post is solely focusing on bidding. Being awesome at optimizing your ads based on bidding don’t mean much if your ad creatives are bad. What matters the most if you want to succeed with your Facebook advertising is your ad creative. Period. Besides the obvious (bad creatives won’t lead to sales), bad creatives have a significant negative impact on the price you’ll pay in the auction system. More than the right bidding strategy will ever have. That said, if creatives are done right, using the right bidding strategy can multiply your ROI.

Please let me know if you found this post useful or not. And if you did, it would be awesome if you would share it!

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Facebook

Why paid is most important on Facebook

There’s a massive misconception that Facebook is primarily free distribution. That’s wrong. Yes, owned and earned are parts of the equation, but paid is what matters. Your content get free organic distribution to some of your fans and great content might get some viral distribution, but it will rarely be really significant. As you might know, the average number of fans you reach on Facebook per post is 16%, which means that if you have 1000 fans you reach 160 per post. That’s not a lot of people, and it won’t do much for your sales. If you’re creating great content your percentage will be higher and like vice lower if you create bad content, but unless your some kind of content super hero (I know great content creators, but no super heroes) your reach will still be limited.

You can’t get much cheaper distribution than Facebook. The CPM (cost per 1000 impressions) is of course important, but what you really should care about is the CPV (cost per 1000 visual). Your ads won’t have much effect if people don’t see them will they? According to a study conducted by Eyetrackshop released in January 2013, page post ads in the news feed attracts 92% of users gaze compared to the online display average of 50%. If we assume that the Facebook CPM equals the online average, you achieve 46% cost savings. Second, the ability to reach only the people you care about through narrow targeting is unique. According to a Nielson study from December 2012 the accuracy of Facebook’s narrow targeting is 90% compared to the online average of 50%, saving you another 44% on your spend. Combined these two effects amounts to about 70% cost savings compared to the online display average. Now, these numbers assume equal CPM prices which most often won’t be the case. However, I have in my own experience, more often than not, seen lower or similar CPM prices on page post ads in the news feed on Facebook compared to other display placements.

I’ve heard time after time about businesses that are happy with the sales that organic and viral distribution gave them. “Look at our sales and we didn’t spend a dime”. That’s all great and you can pat yourself on the back for being a good content creator. However, you failed miserably from a performance marketing perspective. By not promoting your post to get additional reach in your target audience you probably missed out on the majority of the revenue you could have made. In theory, to maximize your profit you should be spending on distribution until your marginal CPA (cost per acquisition) equals your product margin. Of course this won’t always be possible in real life (and sometimes it doesn’t align with your goals), but the point remains the same – by not paying for additional distribution you are missing out on revenue.

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Personal

Blog post no. 1

Wow, I’m live! I’ve been thinking about setting up this blog for a while now, but kept postponing it. I’ve been telling myself that it will take too much time, but honestly I guess I’ve found it a bit frightening. I mean, it’s for the whole world to see, right? I left Facebook two weeks ago after eighteen awesome months to take on new responsibilities at Venture Factory in Oslo. Big changes leaves an open window for more change and I feel now is the right time to go forward with this project. No more excuses, just start typing.

I’m passionate about marketing and great ideas in the world of start-ups. And that’s what I’ll write about. I won’t be more specific, as frankly, I don’t know where this might take me yet. There might be an overweight of posts about marketing on Facebook to begin with though. It’s an area that I know I can say a useful thing or two.

So why do this? Purely out of selfish motives. I find writing a really great way to digest new knowledge and make it stick. Now, you could say that I might as well write in private (and I’ve done that to some extent so far), but the added benefit of writing to you is that it forces me to reflect and challenge my beliefs. Unchallenged, it’s easy to make wrong assumptions and base beliefs on a questionable foundation. I’m also hoping that my posts over time might generate some useful feedback and new points of view from you that I can learn from.

Though my motives are selfish, my success is measured in you finding what I write interesting and useful. So if you’re into marketing and you like to occasionally come across a great idea, stay tuned and we’ll find out together if I’m able to deliver on my KPI, be interesting and useful to you.

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