Does Facebook drive sales? That’s a question posed by many an online retailer active on the social network and one Facebook is looking to answer with a new conversion tracking tool for advertisers.
Here’s how it works: Under Ads Manager, marketers can find a unique snippet of code to add to the pages on their websites say, the page that thanks visitors for signing up for a newsletter, or for completing an order. Every time someone who clicks over from a Facebook ad lands on one of those pages, it registers as a “conversion” in the Ads Manager console.
Until now, marketers could only track the numbers of clicks and, depending on the ad unit, app downloads their ads were generating, but had little data about how well each ad click-through was converting into sales, newsletter signups, site registrations and other targeted actions.
In addition, marketers can also now opt for “Optimized CPM bidding” during the ad creation process so that they are able to automatically target the demographic of users who are most likely to convert.
The tool is currently in “extended beta” and will launch officially at the end of the month, a spokesperson said. It will help marketers determine if Facebook ads deliver better conversions for the cost than paid search and other forms of trackable online advertising. Beta tester Fab.com said it was able to lower the cost of customer acquisitions by 39% using Optimized CPM bidding, according to Facebook.
Facebook, which has approximately 1 billion members, brought in $1.09 billion in advertising revenue last quarter. The viability of the company’s ad model has been questioned as users spend more time accessing the social network via mobile devices, which generate less ad revenue per page than views on desktop devices, but early growth in that segment is promising.