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New Study Charts Influence Of Facebook Ad Spend On Paid Search Conversions
Following up on last year’s study that found increased Facebook advertising yielded higher paid search conversions, Kenshoo released new data and a formula for determining the ideal Facebook spend required to move the needle on paid search.
The study, conducted by Kenshoo and commissioned by Facebook, analyzed the paid search performance of data services company, Experian, in which some segments were exposed to Facebook advertising while others saw paid search ads only. For the three groups also exposed to Facebook advertising, on average, total conversions increased by 19 percent, conversion rate rose 11 percent and CPA fell by 10 percent.
Kenshoo also says the results showed correlation between increasing Facebook spend and rising paid search conversions as well as more clicks on paid search ads resulting from a rise in Facebook impressions. However, there was an upper limit of Facebook spend after which point the cross-channel benefits tapered off.
“This study proves that brands willing to adopt a similar thought process and forego the traditional siloed approach to digital marketing can reap significant cross-channel benefits between Facebook and paid search,” said Aaron Goldman, CMO of Kenshoo in a statement. “While the actual sweet spot in terms of investment will vary for each advertiser, it’s clear that one exists and it’s imperative for marketers to find it.”
The Goldilocks Effect
The results showed the “sweet spot” hitting in the mid-level spend group with Facebook ad spend indexed between 1.15 and 1.24. Too little spend on Facebook had a marginal impact on paid search conversions, while too much spend didn’t produce a corresponding increase in paid search conversion activity.
Online conversion data — credit report applications, in this case — were tracked from Experian’s website to determine the impact of Facebook advertising on paid search performance.
There were three test groups, broken out by low, medium and high levels of Facebook spend, and a control group with no Facebook spend. All groups used the same set of paid search ad creative and landing pages. Each segment consisted of 80 discrete ZIP codes across multiple U.S. regions to safeguard against any geographical bias.
The full report is available for download here.