Last year, digital marketers spent a staggering £85 billion on social media advertising, with Facebook sucking up most of that spend. For those who bought Facebook ads, the appeal came from its reach and the level of consumer insight it provides for demographic profiling.
But reach isn’t everything, and segmentation strategies based on demographics such as age, gender or even job title are proving less effective at driving real, meaningful, marketing results. Plus, with clicks and engagement statistics coming under increasing scrutiny, marketers are learning that social media targeting isn’t the golden ticket to commercial success.
In the tech sector, the average conversion rate for a Facebook marketing campaign is 2.31%, with a successful lead costing on average £40. However, if you’re a mobile games developer who knows that only 1 in 5 people that download your game ever spends any in-app money, you are actually spending £200 to generate any additional revenue.
For these types of brands, demographic targeting based solely on social media attributes such as likes, hobbies and interests isn’t enough to ensure a positive return on advertising spend, as they are not a strong enough indicator of intent to pay.
If digital marketers want to generate financial return from Facebook advertising and deliver meaningful business results, then they need to know that their ads are reaching the people who are most likely to pay for the product or service; those who have bought similar products before so are more likely to buy them again.
This is where Purchase Behavior Targeting comes into play
Purchase Behavior Targeting represents a revolution in social media advertising. Instead of targeting your campaign at a specific gender, age group or profession, you target campaigns at people who have spent their money on similar products. Don’t try to demographically “guess” what kind of online audience might be interested in vegetarian food– market to people who dine in vegetarian restaurants. It’s a simple as that. No more convincing stakeholders of the benefits of high engagement or click through rates, just high conversion rates and more paying customers.
Facebook can offer you their first party payment data to aid with purchase behaviour targeting, but the wider the set of purchase behavior data the better. By combining Facebook’s own user data with purchase data from major online retailers and app developers, marketers can segment their ads and only target customers with the highest probability of buying a product.
Through an emerging set of tools like Bango’s Buyographics platform, this idea is coming to life . By analysing payment insights from billions of pounds of consumer spending across major consumer platforms, these tools enable marketers to direct campaigns to the customers that convert.
As this type of Purchase Behavior Targeting evolves, marketers can expect to get more value for their money from Facebook ad campaigns, while users can breathe a sigh of relief that irrelevant ads are no longer clogging up their newsfeeds. Good news, all round.
Article originally published on Business Game Changer.