SMB Resellers and Agencies: How to Make the Most of the Conversions Objective
Whether you’re an agency or an SMB reseller who delivers ads for small businesses, you’ve probably heard about Facebook’s Conversion Marketing Objective. Perhaps you have been wary of trying it out, or maybe you’ve tried it and found yourself navigating the difficult choice of what exact type of conversion to optimize for. In either case, Facebook’s Conversion and Attribution measurement tools have received numerous additions and refinements over the last few years, and the value advertisers derive from these improvements has specifically sparked popularity for the Conversions Campaign Objective, which optimizes the delivery of your Facebook Campaign specifically towards a conversion event, rather than, say, a website click or person reached.
ROI is, of course, the ultimate goal of any advertising effort, so one might naturally ask, “Why would I ever choose an objective that’s not conversion optimized?”, or even “Why would I choose to optimize towards anything but purchase conversions?” It turns out the latter is the more complicated question, but one you can answer when armed with the right information. It all has to do with how Facebook’s ad bidding works, which involves a combination of factors: your advertiser bid, estimated action rates (i.e. how your target audience responds to the ad), and overall ad quality. As Facebook notes, “together, estimated action rates and ad quality measure ad relevance. In fact, we subsidize relevant ads in auctions, so more relevant ads often cost less and see more results.”
Let’s think about what this means in the conversions context, using a simple example of a local golf supply shop with an online store on their website. Naturally, they want to move as much product as possible and focus their targeting efforts on people interested in golf. So, they set up a Conversions Objective Campaign targeting people interested in golf. Let’s set aside for a moment the question of which conversion event they should choose. Instead, let’s first illustrate how optimization works between the Facebook objective and target audience.
Breaking this equation down, first we have our target audience, a combination of the golf store’s sales area and customer base, or simply “people interested in golf.” A lot of people on Facebook are likely interested in golf products, but only some of them probably use, buy, or browse products regularly. This is where Facebook’s optimization comes in to help, as it tries to identify those users in the pool of people “interested in golf products” who are likely to take the chosen action of the Facebook objective.
In this example, we have chosen the Conversions Objective, so you can think of it as a hierarchy. We want people interested in golf, who are likely to convert. Another way of thinking about it is this results in a smaller pool of users that becomes our “real” or ideal target audience: the “convertors” among those interested in golf. This leads us nicely back to the question of the conversion action to optimize for, as this will modify whom Facebook identifies as the most likely to take the conversion action in the “convertors” group.
Facebook’s own provided guidance on the matter is as follows: “We recommend optimizing for a conversion that occurs at least 100 times per month without running any ads. If your website doesn’t get at least that many conversions without ads, it’s very unlikely that we’ll be able to find enough converters through ads for your ad set to be successful.” Additionally, they also note that purchases are the “rarest type of conversion” — or perhaps, more precisely said, typically the most expensive type of conversion.
In the end, it all boils down to Pixel data and which actions can be tracked on your website through the Pixel. Facebook’s guidance recommends that you should only consider the Conversions Objective if you have a history of 100 Pixel fires on “page view,” “add to cart,” and similar type events. This context helps us in selecting conversion events, but what about the strategic decisions, especially for an SMB who has a more limited advertising budget?
The key is to adapt and learn. For an SMB with website traffic in the low thousands per month, you likely won’t have enough purchase actions tracked on specific products to reliably optimize “purchase” events right of the gate, and you may find that even if you do, it’s still not as cost effective as optimizing toward more common conversion events, like “view content,” “add to cart,” or “add to wishlist.” For example, “add to cart” instead tells Facebook to look for users in the “interested in golf convertors” pool who are showing purchase-intent behavior, as opposed to verifiable conversions, like “purchases.” Remember, there are always going to be less purchasers relative to more common conversion events, unless of course your business’ conversion rate is 100% (wouldn’t that be nice?).
When optimizing towards people showing purchase intent, you are potentially gaining more cost effective targeting, as those users will be easier to reach, because, of course, these are not exacting parameters. Maybe I, for example, viewed a golf product on a big box store’s website and opted not to buy the product after adding it to my cart. Perhaps, I simply forgot to checkout or changed my mind at the last minute. The Facebook Pixel captures this behavior and recognizes me as one of the users showing purchase intent on golf products. Maybe when I see an ad for the SMB golf store, I like the price or the quality better, and opt to purchase from them immediately. The golf store just got a lower cost conversion by optimizing towards purchase intent.
The possibilities are infinite, but it is important to keep in mind how Facebook’s optimization and objectives work when making these decisions. There is never going to be a “one size fits” all approach when it comes to choosing the right conversion event to optimize for, but through smart data analysis and guided testing, you can make the Conversions Objective work for just about any business with a website with a bit of traffic.
Chris Mayer is a solutions engineer at Tiger Pistol.