Interactive is an expanding piece of the ad spend pie here and around the world, and Magna Global has predicted it will overtake TV in the US by 2017. Facebook is a big part of that ecosystem and, as this revealing New York Times story on how it helped sell krill oil to Americans shows, it reckons it can offer both scale and granularity. So we caught up with Facebook head of New Zealand Stephen Scheeler to find out what's happening here and how House of Travel has harnessed the social network and is moving away from traditional media.
The ASA ad spend figures from last year indicated that while TV advertising is still the dominant earner with newspapers coming second, interactive (online) advertising is racing up the ranks with the steepest year-on-year growth in spend and percentage of spend. And it's predicted that if it continues this way, next year it could be the biggest. Of course, Facebook's keen to see this happen and it has completely changed its marketing offering over the last couple of years. Previously, 'likes', fans and engagement were the be-all and end-all of brand pages, but brands can now talk to people that aren’t their Facebook fans and, like most media platforms, Facebook is charging them for the privilege of reaching its audience. Facebook can stick ads into anyone’s newsfeed, and it eventually wants the experience to be so seamless that people don’t even notice they’re scrolling through ads because they look just like interesting posts or content marketing.
Facebook also has its targeting. Ad viewers are either existing customers of the brand outside of the social network which has given Facebook an email/phone list, or they’ll look a lot like a brand’s customer simply by the type of person they are (this is the Facebook Lookalikes tool where advertisers give Facebook a list of email addresses, and it will find 10 time more of the same type of person).
Stephen Scheeler, head of Facebook New Zealand, says one of the reasons online advertising is so powerful is the personalisation.
“Imagine every TV set knew who was looking at it. Your age, profession, how many kids… if it knew all that, how would that change how you make commercials? Would you make one and show it to everyone? No, you’d make hundreds of different commercials for the same product.”
He says Facebook has an advantage because on average 20 percent of time spent on mobile is spent on Facebook or Instagram. Also, Facebook can track every user from device to device while having access to their personal information. Take Coke’s America is Beautiful campaign. It customised the video shown to different ethnic cultures – Latino, Italian etc.
Google and Bing, too, are massive players but is slightly different in that they speak to a set of people that know what they want.
“The digital world over the past few years has built up around search,” says Scheeler. “And search is very much about a specific intent. There is a huge world of people out there who know ‘I want to go to Brisbane on this day’ and they search for tickets. But then there’s this world of discovery. You don’t necessarily know where you want go, just go somewhere ... and on Facebook people are discovering new ideas.”
When asked about how much Kiwi brands are spending on Facebook advertising, Scheeler said he didn't have the information at his fingertips (we've asked for specifics, but historically, it's been pretty coy on this front). But he did say Facebook is still a small part of the total ad spend in this market and is growing 100 percent year on year, mostly on mobile.
“Two years ago you couldn’t buy an ad in mobile – we didn’t even offer them – and now almost 70 percent of all the advertising on Facebook happens in mobile ... just a few months ago most big brand advertisers used TV, OOH, and print as their main marketing, then digital and social, which included Facebook. What has changed with our best partners is Facebook is now one of the pillars of marketing, becoming the lead rather than an after-thought."
He says globally 2.5 million small business advertise on Facebook, and the top 50 advertisers in New Zealand all advertise on Facebook.
House of Travel is one Kiwi company using Facebook to publicise its new travel app it launched in February with Satellite Media. The travel agent is 28 years old and holds ten percent of the travel market in New Zealand and 25 percent of the travel agent category.
Jo Wedlock, House of Travel's public relations manager, says ten years ago people would sit down with travel consultants, but now they combine that with booking their own quick flights online. “So how do we keep that model which is our background, history and people, but bring a relevancy in the way people book travel now?”
Much like Tripit, the app pulls hotel and flight bookings into one place, outlining users' itinerary. Users can also book flights and search deals through the app itself, and access content about destinations.
It's supposed to cover the whole journey of booking, talking, interacting and selling, which can be fragmented and customers can easily be lured to competitor agents. “There’s a travel life cycle which is dream, plan, book, go on holiday and feedback," says House of Travel strategy director Niall White. " ... What we want to do is provide a tool in an app that customers can use for the whole cycle.”
To get people to actually use the app once downloaded, HoT created an actual holiday that people would explore in the app in order to answer questions and win the trip.
The app was promoted via a three week campaign in March, using display media, press, Google Adwords, radio, videos and sponsored journalist travel with the app.
"Of the total media spend, 32 percent was spent on traditional media (radio and outdoor) for support, and the rest was spent on digital," says HoT's digital manager Tim Paulsen.
And a large chunk of the digital marketing was through Facebook – Paulsen says 40 percent. House of Travel ran a newsfeed Reach Block on Facebook for mobile and desktop for the first couple of days. “The reach block is a mass targeting capability so you can take all people aged 25 plus on Facebook. We call it a blast product. It gives the campaign a good blast at the outset and gets it to market very quickly, then you can become more precise with your targeting using some other tools,” says Scheeler.
The campaign then targeted more specifically, e.g. excluding anyone who had already entered the competition (via Facebook Custom Audiences).
Paulsen says there were 13,500 downloads of the app at the end of the three week campaign – they had hoped for 10,000 – but the clear majority of the downloads came from the reach block in the first couple of days.
Wedlock says from an ad spend point of view House of Travel is starting to flip.
“Two years ago we would’ve put a campaign together to sell holidays to Europe, and 70-80 percent of it would have centred around press, and maybe radio. If we could afford it we would’ve added TV depending on stage of year, and we’d probably be lucky to have ten percent of budget for 'digital stuff'."
She says now it has a digital team leading the campaign and press around it to support it rather than other way round. “That’s shaped how we take most of our things to market now … because of the way people are gathering their information has changed so much. Now we can take a campaign out piece by piece, much more cost effectively [than a TVC], return on investment can be measured, tracked against sales, and we can look at how we target rather than just throw something on TV and hoping for the best.”
She also says they can look at customers as personas rather as generalised age groups, which means they can be more specifically targeted.
So what's Facebook’s next big thing?
“The big thing for us is really evangelising what Facebook can do to really drive metrics and change the game for the best advertisers. How do people go from phone to desktop to tablet, back to phone again, what’s the journey and how do you track that? We can do this because we have the unique identities. And then attribute this to sales,” says Scheeler.
He says Facebook advertising is about the right message at the right time; about finding the audience you want to talk to at scale, targeting people who are ripe to be buying your product, and doing it in a way that the creative is the best it can be for the newsfeed.
“And great content is the best kind of advertising."