Blog / August 29, 2016

Facebook Live Could Be One of the Most Powerful Sales Tools

By Jeff Fagel

Facebook Live, the new video-streaming tool, has quickly become a trendy marketing option for brands and publishers. But so far, media companies, marketers, and even Facebook have only been concerned with how many people are engaging with these videos and not whether those viewers actually purchase after watching.

The problem is that all those likes, comments, shares, and tags don’t necessarily mean much. A study conducted by marketing think tank Ehrenberg-Bass found that only a bit more than 1 percent of fans of the top 200 brands were actually engaging with them on Facebook.

Although it’s certainly possible that Facebook Live content is increasing sales for the brands that have invested in it, engagement metrics, such as time spent and video views, are simply not enough to determine whether that has been the case.

Mark Zuckerberg announced that media publishers will be a huge part of Facebook Live’s growth. Video courtesy of Facebook.

All of this focus on how Facebook Live can increase customer engagement has obscured the fact that it could one day become an incredibly valuable tool for producing tangible business results. With Facebook’s recent confirmation that it started testing 15-second mid-roll videos (similar to commercial breaks on TV) within Facebook Live, that vision starts to become a near-term reality.

The immediacy of live viewing can have a powerful effect on how people consume video content—just ask the brands that paid $5 million for a Super Bowl ad this year. This announcement from Facebook is an indicator of a promising future for Facebook Live, one that combines the best qualities of TV and digital advertising.

But these opportunities only mean so much if marketers continue to solely focus on engagement. Instead, they must use video opportunities to present consumers with highly relevant messaging that is proven to impact the business’ bottom line.

The Best of Both Worlds: Outcome-Based Marketing + Live Video

With the introduction of mid-roll ads, Facebook creates a future where marketers could run paid promotion for their own live streams and advertise in other parties’ live videos. Already, Facebook has paid a combined total of more than $50 million to publishers including BuzzFeed and The New York Times to fill Facebook Live with premium content. Using mid-roll ads, publishers can further monetize their content with in-stream advertising.

For marketers, these mid-stream ads are a tantalizing upgrade over the television ads that have ruled the media roost since the 1950s. That is, of course, if Facebook can build a product that combines digital media’s outcome-based marketing with audience sizes comparable to TV.

Brands using Facebook’s ad targeting capabilities for videos are already experiencing boosts in sales and visits to their websites and stores. For example, Acura used sequenced Facebook video ads and retargeted viewers with link ads for a new vehicle launch. This strategy not only drove purchase intent, but vehicle sales also increased by more than 9 percent. Ruby Tuesday experienced a similar rise when the restaurant chain ran dynamic local awareness ads within a 3-mile radius of its 734 US locations. That resulted in a 2.6 percent increase in net sales and a 3.1 percent increase in the number of guests week over week.

This year, television ad spending will top $70 billion in the US alone, which is a testament to TV’s desirable content and the many people who still watch it live. But despite these large audiences, television is still slow to move beyond broad reach tactics. The demand for addressable ads is now driven largely by data, which enables the monitoring of sales impact. By and large, consumers in a given region who are watching the same show will all see the same exact ad regardless of their individual demographic traits or past purchase behavior.

Better than Advertising on TV

For years, marketers have salivated over the idea of targeting individual live TV viewers with personalized ads. With the addition of mid-roll ads in Facebook Live streams, Facebook could actually leapfrog over cable and satellite providers to achieve that level of personalization, especially since the TV industry has been slow to adopt advanced targeting features.

A fully developed Facebook Live ad product could improve on TV advertising by integrating the targeting, measurement, and creative optimization tools that are available when brands buy programmatic video elsewhere on the web. For instance, rather than buying a 30-second spot in the middle of “Scandal” and merely hoping to reach the right people, a retailer could combine its customer purchase information with Facebook’s user data to target a precise audience across Facebook Live publishers.

With dynamic creative optimization, that brand could create and show thousands of 1:1 video ad variations featuring different deals, items, and locations. Viewers in a city where it’s currently raining would see an ad featuring an umbrella while viewers living in sunny San Diego would see a video offering a discounted pair of sunglasses at its brick-and-mortar stores. Most importantly, the brand could measure with certainty how its ads led people to purchase its products.

Download our guide, Creative Best Practices for Facebook Video!

Stop chasing engagement and start getting results

It’s time to stop paying for engagement and start using video as a sales tool rather than a means of generating likes, views, and other ultimately meaningless metrics. Marketers should focus on platforms and partners that guarantee their hard-won budgets will be spent on verifiable business outcomes.

Although Facebook Live’s ad product still needs time to reach maturation and become widely available, video marketers can start by targeting the right audiences, personalizing creative messaging, and measuring results with tools that are available today.

Even if Facebook is not the platform that ultimately marries outcome-based marketing with live video, this is where the convergence of television and digital video is leading us.

Key Takeaways

• Facebook Live’s mid-roll ads mirror commercials during live TV, which presents an exciting prospect when taken to digital channels and matched with consumer data.
• Videos are already proven to work well within Facebook’s platform, as long as they have 1-to-1, relevant creative for the viewers.
• Personalized creative and measurement will be the key for taking mid-stream ads from engagement metrics to in-store sales.

Learn more about how digital video works on Facebook.

Jeff Fagel

More about the author

Jeff Fagel Chief Marketing Officer

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