How strong is Facebook as a performance channel?

Facebook has established itself as an essential online marketing channel. But how strong is Facebook as a sales channel? An analysis.
Facebook has become an essential channel for advertisers, not only in branding but also in sales. However, the discrepancy between the conversion figures in Facebook’s ad manager and external tracking systems makes online marketing managers wonder. We look into this in analysis.

Read the article in the ad agents online magazine.

Anyone who deals with online marketing today cannot avoid the Facebook universe. The extensive reach and precise targeting options make Facebook, including Instagram, Facebook Messenger, and the Audience Network, an attractive advertising platform. The granular target group options offer great opportunities to pursue branding goals and advertise conversion-oriented products. In its case studies, Facebook repeatedly reports on successful sales campaigns, for example, at asphaltgold or the Brooklyn Soap Company.

The conversion rates for many of our customers are also impressive – at least if you consult the Facebook statistics. However, these sometimes differ significantly from the results of external tracking systems such as Google Analytics. Where does this discrepancy come from? Can the occasionally robust statistics that Facebook outputs be believed? We take a closer look at the role of Facebook in sample analysis to evaluate how strong the social network is as a performance channel.

How often is Facebook involved in conversions?

For our analysis, we draw on actual data from an online retailer. According to Google Analytics, the example includes around 5,000 conversion journeys with over 12,000 touchpoints in the selected period. These are distributed across the channels Direct (the direct visit to the online store), Organic (organic traffic via Google & Bing), and the advertising channels Search Engine Advertising, Display Marketing, and Facebook Advertising.

According to the last-click attribution in Google Analytics, 64 sales are attributable to the Facebook completion channel – that’s just one percent of all 5,164 conversions. If we deviate from the last-click model and instead consider all clicks on Facebook ads that resulted in an indirect purchase, the percentage rises to four percent. This means that Facebook was involved as an advertising channel in four percent of all customer journeys in our example – regardless of whether it was used as a starting channel, in the middle of the customer journey, or as a closing channel.

Now let’s compare these statistics with the insights Facebook’s Ads Manager presented to us. According to Facebook’s statistics, the advertising channel was involved in almost 600 sales in the selected period, which amounts to a remarkable 11 percent. Facebook’s reported participation is, therefore, higher by a factor of 3 than the percentage reported by Analytics. The distrust that some advertisers have of Facebook Analytics seems justified when looking at the gaping chasm. However, upon closer inspection, there are some plausible explanations.

Facebook’s attribution model: Post-view and post-click

One reason for the different results is the underlying attribution models of the tracking systems. Although the attribution periods are comparable – Facebook’s attribution window is defined by default as “28 days after the click” (post-click), Google uses a time window of 30 days for post-click tracking – Facebook also values seeing an ad (post view) if the conversion is within one day of contact with the ad. External tracking systems rely on clicks, and the “view” metric is not available to Google Analytics & Co. All references in which a user sees an ad on Facebook but does not click on it are ignored by external tracking systems.
Tracking the customer journey across devices

Another strength that probably accounts for the difference in the figures is Facebook’s cross-device tracking. Over 90 percent of users in Germany use Facebook on mobile devices. Even though the number of online purchases via mobile devices is increasing, their share is still well below 50 percent in most industries. The bulk of online purchases, therefore, take place via the desktop. We would like to illustrate the consequences with an example: Ben clicks on the ad for sunglasses in the Facebook app on his smartphone. The following day, he Googles for the Ray-Ban on his laptop and buys them. An external tracking system probably does not attribute any involvement in the successful customer journey to Facebook because it does not know that Ben clicked on the Facebook ad on his smartphone the day before. On the other hand, Facebook can track the customer journey across multiple devices – provided Ben is logged into Facebook on the respective device.

Once a Customer Journey crosses multiple devices, most tracking systems struggle to track it. However, as long as the user is logged in, Facebook follows his customer journey from smartphone to tablet to laptop and back. This almost seamless “monitoring” allows Facebook to assign conversions to an advertising contact, while other systems only record a customer journey that is not completed with a purchase.

Facebook advertising should not be underestimated.

How strong the advertising effect is when just seeing an ad. Nevertheless, post-view tracking adds a facet to Facebook attribution hidden from external tracking systems. This factor, combined with strong cross-device monitoring, is the main reason for the discrepancy in conversion engagement. From our point of view, there is no plausible reason to distrust Facebook statistics. After all, Facebook thrives on reliable data and would not risk its reputation with advertisers by falsifying results statistics.

In our data example, Facebook as a touchpoint is involved in every tenth conversion – a relevant figure when considering the low budget behind the results compared to other channels. Of course, this percentage depends on many factors besides the budget used, including industry, product, and the quality of the campaigns. Overall, however, it can be stated that external tracking systems tend to underestimate the importance of Facebook in the customer journey. This makes it all the more important to know how the often significant differences between Facebook statistics and external systems come about.

Read the article in the ad agents online magazine.

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