Study Finds That Facebook Ads May Bolster Paid Search Performance

kenshooA new study from Kenshoo finds that advertising on Facebook may bolster the performance of existing paid search marketing campaigns. The research, funded in partnership with Facebook, found that users who saw an ad on Facebook and then made a purchase via a paid search link spent nearly a quarter more than those who were not exposed to the same ad.

The study analyzed search results of more than 2,500 stores of a leading retailer in the U.S. in August and September, comparing a group of users who were exposed to Facebook ads before paid search ad and those who were not.

While exposure to a Facebook ad only led to a slight uptick in click-through-rate (7%), the overall return on advertising spend (ROAS) increased substantially. According to the report, the paid search campaigns targeted to the group exposed to Facebook ads previously saw a 24% higher average order value than the group that was not.

Earlier this week, Dan Levy, Facebook’s head of small business, touted the company’s presence among the small business segment, saying that Facebook now has over 25 million active small business pages on its platform. Facebook has long held out the small business segment as one of the big potential growth opportunities for the company, and pairing the effectiveness to one of the few digital ad tools that has succeeded in the SMB market might be a winning strategy. Kenshoo believes that the study should encourage local businesses to invest in Facebook ads.

“Beyond being a strong channel to drive brand affinity and local foot traffic, Facebook can boost the performance of your search engine marketing,” Aaron Goldman, CMO at Kenshoo told Street Fight. “Engaging with fans and prospective customers on Facebook helps build awareness and engagement that manifests itself in search engine recognition and conversion. In other words, people remember you and are more likely to click on your search listing.”

The collaborative focus of the research comes as Facebook and search giant Google, once enemies, have had a rapprochement of sorts in recent weeks. In October, the companies announced that Google would sell Facebook advertising inventory through its real-time bidding system, DoubleClick Bid Manager.

Myriah Towner is an intern at Street Fight.

  • Alison

    Thanks Kenshoo for publishing this data, which is analogous to what Criteo said about the impact of retargeting on SEM (‘Search and Performance Display: Better Together’, circa Oct 2012). One point Triggit would like to add has to do with the greater implication for Facebook advertisers:

    If we assume
    a) 25% of the average advertiser’s search campaign consists of consumers who’ve also been exposed to Facebook retargeting ads;
    b) FBX direct click-based revenue = $1M
    c) SEM revenue = $10M

    If 25% of the SEM revenue sees 30% higher ROAS from the Search + FB group in this study, this leads to a $750K increase in FBX revenue:
    (25% overlap x $10M revenue) x 30% ROAS increase = $750K incremental revenue driven by Facebook advertising.

    This makes your Facebook campaign 75% more valuable. Can it get any better? Yes! Efficiencies can improve even more with a leaner FBX campaign. Given the importance of FBX on its own and in a cross-channel view with SEM, advertisers must do retargeting right to drive the best return across multiple channels. Check out these FBX Vendor Benchmarks for a glimpse into who’s doing retargeting right, and which vendor can drive the best results for your Facebook retargeting and SEM campaigns: