Facebook delivers highly targeted cross-device ads based on overwhelming personal data.

Facebook boasts over 1 billion daily users worldwide. Its monthly active users in Japan alone are said to be around 24 million. Among the myriad social networking services, it commands a strong presence, and its importance in ad delivery continues to grow. This time, we asked Mariko Sonoda of Nextedge Dentsu and Yuhei Hatano of Dentsu Inc. to explain the characteristics of Facebook ads and effective delivery methods.

*Nextedge Dentsu Inc. became "Dentsu Digital Inc." on July 1, 2016.

　

■Why Facebook Stands Out Among Other SNS Platforms

－－Why is Facebook so important among the many social media platforms?

Hatano: First, let's look at it simply: if a company's advertising manager views Facebook as just another platform to place ads on. In that case, it's a platform with 24 million users in Japan. Facebook's ad placements include types displayed in the News Feed and, on desktop, types displayed on the right side of the page. In either case, the number of available ad slots is inherently limited. Consequently, bidding competition becomes fierce, leading to a strong tendency for both CPM and CPC to be relatively high. Looking solely at the numbers, Facebook ads are often criticized for low cost-effectiveness.

However, this overlooks Facebook's unique characteristics and evaluates it solely against metrics identical to other SNS or web advertising platforms. Stopping ad placements based on these criteria would result in missed opportunities.

Of course, from a user perspective, it can be viewed as just another social media platform. However, Facebook possesses a significantly different characteristic compared to other social networks. It functions as a "communication platform" with an overwhelmingly larger volume of data linked to individuals than other social networks. When utilizing it as an advertising medium, operations must be conducted with this characteristic firmly in mind.

Sonoda: As you know, Facebook requires real-name registration. Furthermore, beyond age and gender, a wide range of information—such as location, education, and employer—is linked to each individual's data. It is precisely because of this wealth of information that highly personalized targeting is possible.

Furthermore, behavioral history and response patterns on Facebook, such as which posts users "like," are also utilized for ad delivery. The result is the ability to deliver precise information to the intended audience. This is something cookie-based websites, which judge personal attributes from visited site information, can never replicate. In this regard, Facebook stands apart from other SNS platforms and media.

Hatano: Its unique user engagement is another defining characteristic. Fundamentally, Facebook is a place for connecting and interacting with friends; users actively access the site itself as their primary goal. A "space" where approximately 24 million users each spend an average of about 350 minutes per month holds enormous potential as an advertising medium.

　

■The Tide Turns for Advertising with Smartphone Proliferation

－－We understand Facebook stands apart from other SNS platforms. So, what are the key characteristics of Facebook advertising?

Sonoda: Primarily, Facebook ads fall into two categories: those that are self-contained within Facebook and those that link to external destinations.

Ads that complete their function within Facebook are designed to boost the reach of "Likes" or Facebook Page posts, with user actions concluding entirely within the platform. In the early days of Facebook advertising, these internal ads were the mainstream. There was a period when it was difficult to find a clear answer to the question, "What should we do after getting a 'Like'?" leading some to believe Facebook wasn't well-suited as an advertising medium.

On the other hand, ads linking to external sites started increasing around 2014. These ads direct users to pages outside Facebook to prompt specific actions—for example, app ads linking to app stores to encourage downloads. Since they directly connect to the client's business, they now make up the overwhelming majority of ad placements.

Hatano: I believe the widespread adoption of smartphones also marked a turning point in advertising trends. When using Facebook on a smartphone, ads appear in the News Feed, so they simply take up a large portion of the screen. They're among the largest ads on mobile and very noticeable. Moreover, unlike interstitial ads (ads displayed between page transitions), they appear in the News Feed, so users can easily skip them if uninterested. Even though they occupy significant space, they aren't overly intrusive, which is another advantage.

■Browse on Mobile, Buy on Desktop

－－Facebook users access the platform from both computers and smartphones. Are there device-specific characteristics regarding ads?

Hatano: While mobile is the primary platform for Facebook ads, something more important than device-specific characteristics exists. Since users log in and use the service on both computers and smartphones, we can track individuals across devices. Services capable of "identity matching" – the foundation of cross-device tracking that identifies the same user – are surprisingly rare.

Sonoda: To illustrate what tracking individuals enables, consider a notable case where a fashion brand ran ads on Facebook.

When analyzing the devices used by users who made purchases on that brand's e-commerce site, the results showed 60% used computers and 40% used smartphones. Looking only at these numbers might lead to suggestions like "We should focus more on computers." However, Facebook can track how users who made purchases actually used both computers and smartphones.

The results revealed that 30% of ad views came from desktops, while 70% came from smartphones. Ultimately, the consumer behavior was viewing ads on smartphones and completing purchases on desktops. Had they focused solely on conversions and prioritized desktop while reducing smartphone ad spend, they would have made a mistake.

Of course, the opposite scenario also exists, where 98% of conversions came from mobile. In that case, we made the bold decision to completely cut desktop ad spending. Furthermore, we also stopped desktop ad spending on other media platforms besides Facebook. Being able to apply insights gained from Facebook to other channels is one of the benefits of advertising there.

　

■One client increased their monthly ad budget from ¥500,000 to ¥30 million over the past year

－－Are there specific types of products that are well-suited for Facebook ads?

Sonoda: Currently, I believe products where the entire purchase, contract, or application process can be completed online are well-suited, as results are easier to track.

Hatano: As a concrete example, a client handling products for women increased their monthly ad budget from ¥500,000 to ¥30 million over the past year. Previously, they ran Facebook as just one channel among many. But once they started leveraging Facebook's unique characteristics, their CPA improved dramatically.

Going forward, I expect to see more marketing cases using Facebook from clients in sectors like automobiles, home appliances, and consumer goods—areas where results were previously hard to demonstrate solely through web channels. By linking location-based data on visits to dealerships or stores with actual purchase data from retail outlets and behavior on the Facebook platform, we should be able to prove tremendous value. We're already receiving inquiries from many clients, explaining this approach and consulting with them.

■Advertising that connects with individuals without evoking negative feelings

－－Now, let's discuss the creative aspects of actually running ads. Are there any points unique to Facebook ads that require special attention?

Sonoda: When including text in images used for Facebook ads, there's a rule limiting text to 20% of the image area. Beyond that, Facebook's core principle is to absolutely avoid causing users discomfort when ads appear in their News Feed.

If users give negative feedback, like clicking "Hide Ad," it significantly lowers your relevance score. This score factors in audience response to your creative and is crucial—higher scores give you an advantage in bidding and delivery. The key is to avoid creating negative impressions and instead focus on being personally relevant to users.

Hatano: While not as pronounced as on Instagram, ads that overtly push their promotional nature tend to be avoided by users. For example, creatives that offer deeper insights or are seasonally aware tend to get better responses than straightforward ads like "We're running a campaign now."

(Continued in #4 )