By Noah Freeman of Aisle Rocket
Facebook is a household name because it has 2.6 billion active users – more than a quarter of humanity. In the business world, Facebook is a formidable force because of both the audience reach that number represents, and because of the unique ability, Facebook has to reach very specific consumers with very specific messages. Despite Facebook’s current advertiser boycott, there remain few advertising channels that can show a more direct return on investment for marketers.
However, there have always been gaps in the social giant’s ad service. Consider this: Facebook targeting and related e-commerce features work very well for transactions that are immediate and purely online. Current cookie-based measurement and attribution work well for optimizing that commercial equation, showing which advertisements directly led to subsequent online purchases or conversions by tracking user activity throughout the funnel.
The cookie-based tracking and attribution formula doesn’t work as well with events that are offline or delayed. Think about a product like car insurance: Before making a decision about switching car insurance, a consumer is subject to messaging through a number of different channels, conducts independent research, and often makes the final purchase on the phone – making it impossible to track the journey with a pixel. The same is true for financial products like mortgages or credit cards.
Facebook tried to address the issue some years ago with its “offline conversions” feature. Offline conversions in their earlier form allowed marketers to build audiences and get enhanced reporting from in-store purchase data. But offline conversions didn’t solve for the sorts of long-tail, in-person purchases described above. It was a feature built to serve in-store retail.
Facebook’s original offline conversions feature had significant drawbacks. For example, the original offline conversions had a difficult time providing any real insights into the value of subscription customers. An advertiser could track a user through a Facebook ad and a subsequent free-trial sign-up, but without a method to track the duration of the subscription tied to the ad, the overall value exchange became less clear. Additionally, Facebook didn’t authorize the full use of offline conversions for non-store-retail advertisers.
Now Facebook has changed the game with a new feature: a “server-side API.” Facebook’s server-side API has just emerged from several months of limited beta testing, and the results we’ve seen working with it as beta testers have been nothing short of remarkable for certain types of products and industries.
Facebook’s server-side API clearly represents the company’s next-generation conversion-tracking platform. By feeding offline data directly to Facebook, you can optimize for multiple parts of their sales journey that doesn’t happen online, such as call center phone sales, trial subscriptions, and subscription renewals. (It’s worth noting here that many advertisers and brands would be rightfully hesitant to hand their customer data directly to a company known for its rapacious data-mining practices, but Facebook doesn’t get to keep your data and the arrangement is above-board).
The resulting optimization is a true game-changer for certain industries. For example, it lets subscription companies track and optimize for lifetime value, not just for lowest-cost new subscribers. In financial services, it lets marketers track and optimize for insurance purchases rather than just leads generated, and in automotive advertisers could track car purchases, not merely test-drive appointments. By allowing marketers to track and execute against different offline points of the customer journey using their own data and metrics, advertising spend can go much further than before. As the feature becomes more widely available, savvy marketers would do well to explore the possibilities for their particular industries.