Study identifies “sweet spot” for cross-channel impact between Facebook and paid search
San Francisco (June 18, 2014) – Kenshoo (www.Kenshoo.com), the global leader in predictive media optimization technology, today released new research insights in the white paper, “The Facebook Added Value Series: Volume 2: Finding the Sweet Spot for Search and Social Investment.” The study, executed by Skai and commissioned by Facebook, presents quantifiable evidence that paid search conversion activity increases as advertisers spend more on Facebook. It also determines the minimum spend requirement needed to activate the cross-channel benefits as well as a point of diminishing returns, identifying there is a “sweet spot” for marketers’ investments.
In conducting the research, Skai analyzed recent paid search performance for the leading global information services company, Experian, in which certain segments of the target audience were exposed to both paid search and various levels of Facebook advertising while others were exposed to paid search alone.
Notable findings from the study include :
Facebook advertising directly and positively impacts paid search performance
Conversion volume increased significantly, driven by improvement in other key performance metrics. For the three groups exposed to Facebook advertising, on average:
- Total conversions increased 19%
- Conversion rate increased 11%
- Cost per acquisition decreased 10%
The level of spend on Facebook advertising correlates to the effect on paid search performance
There is clear evidence that the cross-channel effects of Facebook advertising on paid search strengthen when the ratio of Facebook spend between the two channels rises:
- Paid search total conversions rise along with the level of investment in Facebook advertising
- Paid search clicks increased as more consumers were exposed to Facebook advertising
There exists a “sweet spot” for leveraging the most effective cross-channel impact
An “activation effect” emerged from this test between low and mid-level groups in Facebook advertising spend, but the smaller gains between mid and high-levels indicate additional spending may not yield proportionate levels of improvement.
“Consumers interact with brands as part of a fluid conversation, regardless of where, when, and how they engage with paid, owned and earned media. In their eyes, there’s no distinction between channels, devices, and promotions,” said Aaron Goldman, CMO of Skai. “This study proves that brands willing to adopt a similar thought process and forego the traditional siloed approach to digital marketing can reap significant cross-channel benefits between Facebook and paid search. While the actual sweet spot in terms of investment will vary for each advertiser, it’s clear that one exists and it’s imperative for marketers to find it.”
“This is more great research that shows how Facebook and search work better together,” says Blake Chandlee, VP Global Partnerships at Facebook. “One more time we see that Facebook makes search work harder. So it’s our hope that marketers who manage paid search see the potential to improve performance by adding Facebook to the mix. Search is a powerful medium for capturing intent and Facebook is a proven platform for driving more people to search and buy.”
Methodology
This research reflects an analysis of live campaign performance data from Experian, the leading global information services company with total annual revenue of $4.7 billion. For the purposes of this study, online conversion data from the advertiser’s website was tracked to determine the impact of Facebook advertising on paid search performance. A conversion is defined as an online application for a credit report. The 3 test groups and the control group used the same set of paid search ad creative and directed traffic to the same landing pages on the advertiser’s website. Each segment consisted of 80 discrete ZIP codes across multiple U.S. regions to safeguard against any geographical bias.
Research Note
The data in this white paper does not aggregate paid search and Facebook advertising metrics, but rather is a pure analysis of paid search metrics during the study period. The goal of this research is to quantify the impact that Facebook advertising has on paid search performance.
About Skai
Skai is a global software company that engineers cloud-based digital marketing solutions and predictive media optimization technology. Brands, agencies and developers use Skai Search, Skai Social, Skai Local, Skai SmartPath, and Skai Halogen to direct more than $200 billion in annualized client sales revenue through the platform. Skai is the only Facebook strategic Preferred Marketing Developer with native API solutions for ads across Facebook, FBX, Twitter, Google, Yahoo, Yahoo Japan, Bing, Baidu and CityGrid. Skai powers campaigns in more than 190 countries for nearly half of the Fortune 50 and all 10 top global ad agency networks. Skai clients include CareerBuilder, Expedia, Facebook, KAYAK, Havas Media, iREP, John Lewis, Resolution Media, Sears, Starcom MediaVest Group, Tesco, Travelocity, Walgreens, and Zappos. Skai has 23 international locations and is backed by Sequoia Capital, Arts Alliance, Tenaya Capital, and Bain Capital Ventures. Please visit www.Kenshoo.com for more information.
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