Demographic Targeting Is Becoming Less Effective on Social

Ad targeting and retargeting will likely be the driving force behind advertising this year. Audiences are getting more segmented, and advertisers need to be reactive to changes in the market. Despite dedication to data, marketers still get tripped up by demographic targeting pitfalls.

Indeed, data from Yahoo, the brand strategists at Audience Theory and market research firm Ipsos indicates that audiences aren’t responding well to current targeting efforts.

Millennials seem to be the generation most likely to interact with ads targeted towards them: 37 percent of respondents said they would click on ads, and 34 percent are more likely to purchase products from brands that target them. However, 34 percent said that it was about time advertisers recognized their generation, and 24 percent feel that advertisers forget about them.

Baby Boomers are the least likely to interact, with only 17 percent more likely to purchase from brands as a result of targeted ads, and only 23 percent of this generation even clicking ads.

Data from June 2015 seems to indicate that users believe that most ads are properly targeted toward their demographic group, at least when it comes to their interests. In fact, 71 percent of survey participants aged 25-34 believe ads are properly targeted.

Part of the issue may be a lack of retargeting. Advertisers have started to spend more time tailoring content to their audiences, and they have also been increasing spending on such efforts. But basic demographic campaigns aren’t enough anymore; audiences want campaigns that target their interests as well. This is precisely why lifecycle marketing strategies are particularly effective.

Marketers still seem to struggle with personalization and segmentation, but it’s the way forward. Connecting with a core audience will increase engagement a lot more than simply pushing out more ad units. If the content is not well targeted, users won’t click through. Identifying the correct audience, and serving them quality ads, should become central to any marketing campaign.

Retargeting: Your Creepy Online Friend

Although consumers are increasingly savvy when it comes to shopping and surfing online, it can still be off-putting to see the pair of sneakers you were just checking out on Amazon pop up in your Facebook News Feed moments later. From the retailer’s point of view, however, retargeting is a crucial element for keeping consumers’ attention. And does it actually create a better experience for consumers online? Let’s find out!

Why are my dream sneakers following me?

There’s no doubt retargeting can be super creepy for consumers. Imagine this scenario playing out in real life: You walk out of a store (with or without purchasing), and in the midst of your next errand the salesperson from the last store appears, to show you again whatever you’d been thinking about buying…

By comparison, online retargeting isn’t so bad. It’s really just a bit of JavaScript that does the work – and whether consumers realize it or not, it does serve a purpose.

John Lemp, CEO and founder of Revcontent, explained:

I can’t tell you how many times, as a consumer, I’ve been interested in buying something and begun the process – then as a member of the ‘ADD generation’ gotten distracted and clicked off onto something else. Afterwards, I thank God for that retargeted ad driving me back to what I was interested in.

A retargeted ad in your email or social feed that puts you back on track after a case of article interruptus is a courtesy, really.

But ensuring consumers see it that way takes finesse, so it’s important that businesses offering retargeting get it right.

Balancing act

Content recommendation platforms and ad retargeting vendors need to be picky. Speaking to that, Revcontent chooses only 2 percent of sites that apply. And retargeting leader AdRoll offers assurances that its actually consumers that are in control. AdRoll president and CMO Adam Berke explained how retargeting works:

Retargeting doesn’t require personal information, but instead operates on anonymous IDs such as a cookie or an IDFA (Identifier for Advertising). Users also have control of these IDs and can delete or reset them. People often forget that advertisers are very much aligned with internet users in that we don’t want to serve ads that won’t be effective.

So what makes an ad effective – from the consumer’s perspective?

Christopher Ratcliff, deputy editor at Econsultancy, offers some perspective there:

Ads should be for the individual – putting segmentation to work to discern actual interest versus perceived interest
Ads should change on a frequent basis – nothing ensures a non-sale more swiftly than repetitive, in-your-face advertising
Ads should have an obvious call to action that leads right to the sales page – self-explanatory

Given that “On average only 2 percent of your website’s traffic buys a product or completes a desired action,” according to Meteora, it’s important that retargeting vendors – like ReTargeter, to name another – use audience retargeting to customize ads using “demographic, geographic, behavioral, contextual, interest, and intent-based data to target your ideal audience” insuring ads are effective.

Can you call it creepy if it’s working?

And it works, that’s for sure. Ratcliff shared a notable stat from SeeWhy (now part of SAP): “26 percent of customers will return to a site through retargeting. This is up from 8 percent of customers who return to a site without retargeting.” That’s quite a jump.

Retargeting on Facebook, specifically, does even better: In AdRoll’s Retargeting on Facebook by the Numbers 2015 report, when adding Facebook to an existing display retargeting campaign, advertisers saw a 92 percent increase in impression reach, 9 percent drop in cost per thousand impressions (CPM), and 27 percent decrease in cost per click (CPC). And globally, they observed a 31 percent year over year (YOY) average increase in spend per advertiser.

The real question isn’t “why are these creepy companies using retargeting” it’s “why aren’t they all using it and making my online experience better?”

Well, as Ratcliff notes, just because you click on something doesn’t mean you are interested enough to need reminding — so it can be a risky spend if you don’t offer a strong product. And if your retargeting vendor isn’t on top of changes to the frequency or length of time an ad will appear in consumers’ feeds, you can actually push people away. Bottom line: Retargeting done right is a definite value add all around. Done wrong? Adds to the noise.

So the next time you see a retargeted ad that really hits the mark, be grateful they exist. Because without them, you’d be inundated online with irrelevant ads, and likely paying for this privilege too – as advertising revenue is what helps keeps content you find online (like this post) free.

Readers: Do you understand retargeting better now?

Retargeting: Here’s Why Products Seem to Follow You on Social

Although consumers are increasingly savvy when it comes to shopping and surfing online, it can still be off-putting to see the pair of sneakers you were just checking out on Amazon pop up in your Facebook News Feed moments later. From the retailer’s point of view, however, retargeting is a crucial element for keeping consumers’ attention. And does it actually create a better experience for consumers online? Let’s find out!

Why are my dream sneakers following me?

There’s no doubt retargeting can be super creepy for consumers. Imagine this scenario playing out in real life: You walk out of a store (with or without purchasing), and in the midst of your next errand the salesperson from the last store appears, to show you again whatever you’d been thinking about buying…

By comparison, online retargeting isn’t so bad. It’s really just a bit of JavaScript that does the work – and whether consumers realize it or not, it does serve a purpose.

John Lemp, CEO and founder of Revcontent, explained:

I can’t tell you how many times, as a consumer, I’ve been interested in buying something and begun the process – then as a member of the ‘ADD generation’ gotten distracted and clicked off onto something else. Afterwards, I thank God for that retargeted ad driving me back to what I was interested in.

A retargeted ad in your email or social feed that puts you back on track after a case of article interruptus is a courtesy, really.

But ensuring consumers see it that way takes finesse, so it’s important that businesses offering retargeting get it right.

Balancing act

Content recommendation platforms and ad retargeting vendors need to be picky. Speaking to that, Revcontent chooses only 2 percent of sites that apply. And retargeting leader AdRoll offers assurances that its actually consumers that are in control. AdRoll president and CMO Adam Berke explained how retargeting works:

Retargeting doesn’t require personal information, but instead operates on anonymous IDs such as a cookie or an IDFA (Identifier for Advertising). Users also have control of these IDs and can delete or reset them. People often forget that advertisers are very much aligned with internet users in that we don’t want to serve ads that won’t be effective.

So what makes an ad effective – from the consumer’s perspective?

Christopher Ratcliff, deputy editor at Econsultancy, offers some perspective there:

Ads should be for the individual – putting segmentation to work to discern actual interest versus perceived interest
Ads should change on a frequent basis – nothing ensures a non-sale more swiftly than repetitive, in-your-face advertising
Ads should have an obvious call to action that leads right to the sales page – self-explanatory

Given that “On average only 2 percent of your website’s traffic buys a product or completes a desired action,” according to Meteora, it’s important that retargeting vendors – like ReTargeter, to name another – use audience retargeting to customize ads using “demographic, geographic, behavioral, contextual, interest, and intent-based data to target your ideal audience” insuring ads are effective.

Can you call it creepy if it’s working?

And it works, that’s for sure. Ratcliff shared a notable stat from SeeWhy (now part of SAP): “26 percent of customers will return to a site through retargeting. This is up from 8 percent of customers who return to a site without retargeting.” That’s quite a jump.

Retargeting on Facebook, specifically, does even better: In AdRoll’s Retargeting on Facebook by the Numbers 2015 report, when adding Facebook to an existing display retargeting campaign, advertisers saw a 92 percent increase in impression reach, 9 percent drop in cost per thousand impressions (CPM), and 27 percent decrease in cost per click (CPC). And globally, they observed a 31 percent year over year (YOY) average increase in spend per advertiser.

The real question isn’t “why are these creepy companies using retargeting” it’s “why aren’t they all using it and making my online experience better?”

Well, as Ratcliff notes, just because you click on something doesn’t mean you are interested enough to need reminding — so it can be a risky spend if you don’t offer a strong product. And if your retargeting vendor isn’t on top of changes to the frequency or length of time an ad will appear in consumers’ feeds, you can actually push people away. Bottom line: Retargeting done right is a definite value add all around. Done wrong? Adds to the noise.

So the next time you see a retargeted ad that really hits the mark, be grateful they exist. Because without them, you’d be inundated online with irrelevant ads, and likely paying for this privilege too – as advertising revenue is what helps keeps content you find online (like this post) free.

Readers: Do you understand retargeting better now?

7 Tips to Spice Up Social Advertising for Valentine’s Day

Valentine’s Day is a $19 billion holiday that entices over half of the US population to show some love for their significant other.

In 2015, Americans spent over $4.8 billion on jewelry and bought over 58 million pounds of chocolate—that’s more than any other country in the world. Valentines are increasingly turning to the internet to find inspiration and do their shopping, with 48 percent of consumers making purchases online.

Consumers are also searching the web to create more affordable, DIY gifts: Pinterest reports over 200 million Valentine’s Day Pins, and #homemade and #etsy are among the top searched hashtags leading up to the 14th.

Brands can spice up their Valentine’s Day marketing strategy by tapping into the power of social ads. Some tips:

1. Keep in mind that Valentine’s Day isn’t just for couples. Encourage consumers to treat their friends and co-workers—or better yet, themselves—to gifts this year. You can’t go wrong with content that appeals to single audiences as well as couples.

54 percent of US consumers celebrate Valentine’s Day and not all of them are in relationships. Women tend to give gifts to people other than significant others, such as children, friends, and co-workers. One in five will give gifts to their pets! (Source: S. News)

2. Re-target users on Facebook, Instagram, and Twitter who have been browsing gift ideas and push them through to purchase.

The largest spending age group in 2015 was predicted to be 25-34 year olds, who would spend upwards of $213.04. (Source: Forbes)

3. Put your brand at the center of discovery, as Pinners are searching for gift ideas around Valentine’s Day. Create ‘gifting’ campaigns that target users with gift ideas for men and women.

There are 200 million Valentine’s Day Pins on Pinterest and 12 million Pinners have conducted 58 million Valentine’s Day-related searches. (Source: Pinterest)

4. Create creative and inspiring Valentine’s Day-related content and promote it with Link Ads to drive on-site traffic and purchases.

There are over 1.48 million Instagram posts for #happyvalentinesday, 3.3 million for #valentines, and 3.8 million for #valentine. (Source: Instagram)

5. Show users the full range of products that they can purchase for Valentine’s Day with Facebook’s Carousel Ad – the unit has been recently updated to include video.

Nearly half of consumers said they are most likely to shop for a gift online in some form, including on mobile devices and via social media. (Source: MediaPost)

6. CPG brands can leverage this opportunity to create recipe and meal ideas to give audiences inspiration for what they can cook for their loved ones.

Two out of three Valentines will opt to eat in on the big day and will be in the market for romantic meal ideas. (Source: NRF)

7. Target users looking for romantic getaways over Valentine’s Day weekend by offering up tips and possible destinations to inspire them to give in to wanderlust.

1 percent of consumers will spend $3.6 billion on travel and entertainment plans, such as a special weekend away. (Source: NRF)

Ruth Arber is the director of solutions at Adaptly.

3 Steps for Small Businesses to Begin Advertising on Instagram

With advertising on Instagram quickly becoming more mainstream, the Facebook-owned photo- and video-sharing network wants to see small and midsized businesses get involved.

Instagram shared its best practices for SMBs looking to begin advertising on the network in an Instagram for Business blog post, in three steps:

  1. Create an account: Instagram recommends creating an Instagram account or linking an existing account on the network prior to launching ads, saying that while you can begin the process via a Facebook account, an Instagram account “gives you access to the full suite of ad tools—like comment moderation—and the community can learn more about your story by following your profile.” Create or link an account here.
  2. Familiar with Facebook advertising? Good: Following Instagram’s integration into Facebook’s ad-buying tools, several Facebook advertising features are available for Instagram, including extensive ad-targeting capabilities and analytics. Creative elements, including photos and videos, can also be shared across both platforms. More information on custom creative is available here.
  3. Speaking of analytics … Facebook’s conversion pixel allows advertisers on Instagram to optimize ads for specific business objectives (such as boosting website clicks or online sales), as well as to track results and retarget the best potential customers. For more on the conversion pixel, click here.

Marketers: Have you explored advertising on Instagram yet?

Running Ads on Instagram from IG for Business on Vimeo.

7 Ways You’re Fooling Yourself While Calculating Brand Value

Brands can’t resist the allure of large, boastful numbers, especially if easy to achieve. High profile premium placements, such as on Snapchat and Instagram confer instant brand leadership and a flood of impressions.

Certainly impressive at the agency award ceremonies, but quickly forgotten when the applause and alcohol wear off.

These are the 7 common ways that brands fool themselves by inadvertently inflating their brand value:

1. Relying upon paid media to carry the impression load

Especially on Facebook, a paid impression is not worth as much as one earned. Some agencies load up on tiny right-column Facebook placements or remnant bottom of page inventory to jack up impressions.

Paid impressions shouldn’t be counted in EMV calculations, though paid does help organic.

2. Posting like mad on Twitter

Until recently, the measurement platforms and Twitter themselves assumed 100 percent of followers saw your messages. So 10 posts against 100,000 followers meant a million easy earned impressions.
No brand manager would want to dispute such favorable numbers.

Twitter themselves even didn’t know, since so many impressions were on untrackable 3rd party tools. Though Twitter now has some level of impression reporting (if followers are natively on Twitter), brands still continue the habit.

Some brands have more than 2/3rds of their earned impressions via Twitter. How about you?

3. Treating all placements equally

A pageview on your site is worth a lot more than a YouTube video view, which is worth more than an alleged tweet impression. Adding up impressions is something we naturally want to do.

While we certainly do this, too, be sure to have the counterbalance of engagement rate to spot low quality impressions.

4. Giving sponsors 100 percent credit

Sports and entertainment teams like to sneak in posts that thank sponsors. Insurance companies and feminine hygiene products aren’t naturally going to get sharing by themselves.

So when the NBA posts about Stephen Curry getting the KIA Community Assist award, KIA can’t take 100 percent credit. Some percentage of this is NBA or Curry fans and only some percentage of the credit should go to KIA.

We’ve seen some brands and analytics companies arbitrarily award half credit or another amount based on percentage of the image with the sponsor logo. Don’t play that shell game. Award credit by share of follow-on engagement between the brand vs the sponsor.

5. Counting them all as uniques

Let’s say you have a weekly TV show with 3 million unique viewers. You don’t have 30 million unique viewers after airing 10 weeks, unless the audience is brand new each week.

The same is true for web and social audiences — we cannot add up daily uniques to get monthly uniques.

While a lower unique figure over time might appear bad, it’s actually good news.

It means that you’ve got an engaged community that keeps coming back.

You want organic repeats instead of leaky ad-driven audiences that churn out.

6. Choosing external benchmarks industry-wide

An unnamed analytics company said that social media users are worth $3.60. This led to massive fan acquisition campaigns, driving fans for a dollar, at a conceivable profit of $2.60 each.

Another widely respected firm said social users are worth $180, based on their average check-out when shopping. But a follower of Skittles gained through a silly video is not worth as much as an enterprise B2B inquiry via social.

7. Using the same CPM across all channels

As a rough benchmark, you can assume interactions are generally similar in value between liking versus sharing for your brand. We start out with a default $5 CPM across the board and refine from there.

Facebook, which usually has a higher engagement rate, will yield a 5 to 10 cent value per engagement if you use a $5 CPM. That same $5 CPM will yield you 80 cents to a dollar a Twitter, since the engagement rate (interactions/impressions) is lower there.

Of course, the true way to measure EMV (Earned Media Value) is to trace engagement all the way back to sale. You can then assign a value per visit/engagement, backing then into a value per exposure in each channel.

But in CPG or media/entertainment, getting POS data isn’t usually feasible, even with Datalogix and related data providers.

Ultimately, this problem will be getting worse because of more channels, the closed mobile app ecosystem, and the Internet of Things. The fact that word of mouth effects are growing stronger means there are more touches and more unmeasurable touches influencing purchase.

This causes the collapse of these comfortably simple measurement models we’ve discussed here. And it ushers in new frameworks of automatic indirect measurement via holdback audiences and split testing.

Is your agency, collection of tool providers, and internal marketing staff ready to adapt?

Image courtesy of Shutterstock.

Facebook Tops 2M Active Advertisers, Debuts Ads Manager iOS App

Facebook announced Tuesday that it now has more than 2 million active advertisers, and the social network launched its Ads Manager application for iOS.

Chief operating officer Sheryl Sandberg announced during the company’s second-quarter-2014 earnings call last July that Facebook had topped the 1.5 million-advertiser mark, while director of small business Dan Levy revealed in June 2013 that the 1 million mark had been surpassed.

Facebook rolled out its Ads Manager mobile site last July and included access to it in its flagship iOS and Android apps, and it said in a Facebook for Business post that the new Ads Manager app for iOS is currently available in the U.S., with plans to take it global “in the next few weeks” and an Android version coming later this year.

Sandberg and Facebook co-founder and CEO Mark Zuckerberg acknowledged the 2 million-advertiser milestone in a Facebook for Business post:

There are now more than 2 million active advertisers on Facebook, and we have just two words to say to each one of you: Thank you.

This is a moment to celebrate all of the incredible entrepreneurs like you who are creating value for their communities:

Courtney, a mom in North Carolina who started The Produce Box, a company delivering fresh food that now provides a market for more than 40 farmers across the state.
Shubhra and Vivek, married Indian entrepreneurs who sold their house to raise the money to start Chumbak, an accessories company that now employs more than 150 people.
Thiago, a Brazilian man in the Amazon who turned his passion for making chocolate into Brigadore Brigadeiros Gourmet, a chain of stores and a national brand.
KaYoung, a young woman in South Korea who used her law school tuition money to launch HotelNow, a service for finding last-minute hotel rooms, which is now expanding across Asia.

And there are more than 2 million other inspiring stories of people working to grow their businesses. You’re creating jobs, sharing new ideas and inspiring all of us to dream big.

Our mission is to make the world more open and connected, and an important part of that is helping people connect with businesses. Today, we want to express our thanks to you and all of our advertising partners — 2 million strong and growing every day. We’re going to keep working to serve you better so you can continue creating jobs and opportunities in your community and moving the entire world forward.

Facebook said in an email to SocialTimes on the Ads Manager app:

Roughly 35 percent of U.S. small businesses don’t have a Web presence at all, but more than 30 million businesses around the world actively use Facebook pages because they’re free, easy to use and they work well on mobile. Below are three reasons more businesses are turning to Facebook to grow:

Easy: Facebook’s tools are easier than ever to use. Of newly acquired advertisers in the fourth quarter of 2014, 80 percent used our easiest ad tools, particularly promoted posts.
Mobile: The consumer shift to mobile is making more business owners want to use Facebook’s mobile tools to reach customers and manage their businesses. For instance, more than 15 million small and midsized businesses use our Pages Manager app to manage their pages on mobile.
Effective: We’ve proven to businesses that our ads work. We want to make sure that every dollar they spend with us improves their bottom line. Tools like conversion tracking have accelerated better measurement for SMBs.

And the social network said in the Facebook for Business post announcing the release of the Ads Manager app:

As business owners and marketers spend less time on desktop computers and more on mobile devices, advertisers have a growing need to manage Facebook campaigns on the go. To meet that demand, last summer, we introduced the Ads Manager mobile site, which is now used by more than 800,000 advertisers each month. Today, in an effort to make mobile ad campaign management even easier for the 2 million businesses using Facebook advertising, we’re launching Ads Manager app.

Whether you want to monitor current ads or create new ones, Ads Manager app gives marketers more power to manage ads from anywhere. Using the app, marketers can:

Track ad performance.
Edit existing ads.
Edit ad budgets and schedules.
Receive push notifications.
Create ads.

Ads Manager app for iOS is available today in the U.S. and will be available worldwide in the next few weeks. We’re currently building Ads Manager app for Android and expect to launch it later this year.

Readers: What are your thoughts on Facebook reaching 2 million active advertisers, and what are your initial impressions of the Ads Manager app?

Big Networks Drive More Traffic, Niche Networks Drive Higher ROI

Sometimes calculating a tangible return for social media investment isn’t as simple as it seems, especially when analyzing the return across different media channels. A report from Addshoppers provides insight into how ROI can vary greatly across different social networks, which sites generate most revenue per share and which drive the most traffic.

When it comes to the question of the effectiveness of social media marketing, it does provide an increase in order value compared with other methods. Users who come from social networks, as well as those who share, had an average order value of $126.12, compared with non-social users, who spent $116.55 on average: That’s a difference of 8.2 percent.

On average, a share itself is worth $2.56, but the rates vary widely across industries and social networks. Email generated the greatest value in 2014, with shares worth $12.41. The next-highest value came from Google+, which saw $5.62 per share. Twitter was third with $1.03 per share. Facebook and Pinterest shares are worth less than $1 each, while “other” networks generated $3.64 per share, likely due to their niche appeal.

These other networks like Wanelo, Tumblr, LinkedIn and Polyvore may not be worth your time when considering the percentage of revenue they generate on the whole. Wanelo performed best with just 0.94 percent, followed by Tumblr’s 0.42 percent, Linkedin’s 0.23 percent and Polyvore’s 0.16 percent.

Additionally, these other networks may all drive similar traffic when it comes to clicks per share — compare Facebook’s 1.10 clicks to StumbleUpon’s 0.98 per share — but these platforms aren’t as popular, so they’ll end up driving less traffic overall, and possibly proving a lower ROI.

Still, smaller social networks are better when it comes to niche marketing. Pinterest may only be the third-most-popular site, with 9.87 percent of market share, and third when considering which sites drive revenue, but it can yield high returns for niches markets. For instance, the average order value from a home and garden share on Pinterest is $232.73 — almost double the industrywide average.

When considering which sites to including your marketing campaigns, it’s obvious that you’d market on the sites with the widest user bases. But a focused marketing campaign can often result a much higher ROI. Visit the tool from Addshoppers to see a table of data that updates monthly, so your marketing campaign can generate the greatest return possible.

Everything Sheryl Sandberg Said on Advertising During Facebook’s 4Q Earnings Call

Facebook held its fourth-quarter and full-year-2014 earnings call after market close Wednesday, and advertising was obviously a major focus, with the social network reporting a record $3.59 billion in ad revenue for the quarter, 69 percent of which came from mobile.

Chief operating officer Sheryl Sandberg did most of the talking about advertising during the call, and here’s what she had to say:

Sandberg presented an overview during her opening remarks Wednesday:

The fourth quarter was strong across the board, tapping a great year. This is our first quarter with over $3 billion in ad revenue and over $2 billion in mobile ad revenue. Our fourth-quarter ad revenue grew 53 percent year-over-year. Our mobile ad revenue was 69 percent of the total ad revenue and double that of the past year. Our growth is strong across all verticals in marketer segments. We also saw healthy growth around the world, although growth rates outside the U.S. were affected by exchange rates.

We also made progress growing the number of marketers using our ad products. Custom audiences, our suite of proprietary targeting products, has become an essential tool to segment current and potential customers. Conversion tracking away from marketers to measure the impact of their campaigns online is also seeing wider adoption. We’ve made it easier for businesses of all sizes to plan and manage their ad campaigns and for small businesses to use our targeting tools.

Travel company Thomas Cook recently used Facebook in Belgium to reach a broad audience and used custom audiences to send targeted messages to existing customers based on the places they’d expressed interest in. It reached 30 percent of the Belgian population in just one day and achieved a 3.85 times return on investment. Results like these are attracting more marketers of all kinds to our platform.

Finally, we made great progress improving ad relevance and measurements. To do this, we made significant investments in both our core measurement and targeting tools, as well as ad tech.

Earlier in 2014, we introduced ad-buying capabilities based on reach and frequency metrics, which is similar to how brand marketers buy TV ads and, therefore, enables better cross comparison. We improved our Ads Manager product to give better insights into ad campaigns and analyze their impact. In the fall, we relaunched Atlas to help marketers reach real people and measure results across multiple devices. Omnicom is our first global client, and this month we announced a partnership with Havas to further expand globally. We also invested in Audience Network, which helps marketers extend their campaign off of Facebook, and LiveRail, which provides publishers with the video tools to monetize their inventory more efficiently.

Heading into 2015, we’re excited to build on the progress we’ve made with our core ad products, as well as with newer areas like video, Instagram and ad tech. It is still early days in all of these efforts. There is a lot of hard work to do, and we plan to invest aggressively. Our ultimate goal is to be a critical business partner to our clients, providing people-based marketing of scale to build their brands and move their products off shelves.

Over the past few weeks, I have had a chance to meet with many of our largest global clients and agency partners and talked about how we can drive real business results for them, making sure every impression and every dollar they spend improves their bottom line. Our clients are excited by the opportunity to use video on Instagram and ads on and off Facebook to reach the right people with the right message. In turn, as their ads become more relevant, we provide a better experience for the people who use Facebook.

In response to a question from Goldman Sachs analyst Heather Bellini about the conversations with advertisers mentioned by Sandberg during her opening remarks, she elaborated:

It’s a great time for the brand question because over the past few weeks, I’ve spent a lot of time kicking off 2015 with our largest agency partners and largest clients. And I would say that people remain really excited about Facebook, but people are bigger believers because we’ve had an opportunity to do more measurement over the past year. I think there are few things about the Facebook platform that are really exciting for brand marketers. The first is the creativity and storytelling, and certainly, as you mentioned, video is a big part of that because video is a format that marketers have used for a long time to building those connection to brands.

And the second is measurement. And what clients want and what they should want is an ability to look at their ad spend and see how effective it is not just in the brand metrics, even though those are important, but in moving products off shelves. And over the past year-and-a-half, the investments we’ve made in building out that measurement have paid off. So when I sit down with clients at the beginning of this year compared to last year, we have more actual case studies of marketing we’ve done with them. We’ve been able to ad test, Facebook ads versus no Facebook ads, and what the effectiveness is on their sales. And I think across the board, we’re showing very healthy, very competitive ROI. The opportunity and the challenge now is that even for our largest clients globally, we still represent a really small part of what they do. And so it’s on us to prove to them that the results we’re showing them in these smaller tests can happen in more bands and more countries with a larger part of their business.

Merrill Lynch analyst Justin Post asked:

It looks like you did about $9 of revenue in the U.S. per monthly active users, which implies an over $30 run rate, which is impressive. Sheryl, maybe the first question is for you: How do you grow that from here? Is it usage? Is it higher ad loads? Is it the mix of ads, or is it targeting — maybe some thoughts on how you grow from there. And then Mark, if you look at other your three platforms — WhatsApp, Instagram and Messenger — and other things you probably have in mind, can you monetize anywhere as well as Facebook if you look at your five-year plan?

Sandberg replied:

When you think about what’s happening, certainly, the growth has been good, but it’s still true that marketing dollars have not followed consumer time and the same percentages. So in the U.S., mobile gets 25 percent of consumer media time, but only 10 percent of the ad budgets. And to take one comparable example, that means that for every consumer hour spent on print, marketers spend $1, and they spend $0.07 per hour on mobile, which means that we have an opportunity to grow. One of the most important ways we grow is not just bringing more marketers into Facebook, having them use more of our ad products, but, as you mentioned, better targeting.

A more relevant ad is a better ad experience for consumers, but it also drives much higher returns for marketers, and as our ads get more relevant and we provide higher ROI, we should be able to continue to grow. I think we’ve done a good job over the past year making our ads more relevant. I think most people on this call would say that you see more relevant ads than you used to a year ago, but I still think, you know, some of the Facebook ads still have rooms for improvement in terms of relevance. And so, we see a lot of room for improvements there, both in the ROI we deliver and in the experience we can provide to consumers.

Co-founder and CEO Mark Zuckerberg chimed in:

Yes, so I will add something to that just on the side of how we think about value through Facebook and I will talk about the other applications. In terms of the product developments that we do here, we have four major groups inside of the company. This is kind of how our company is organized. We have one that is focused on growing the community, one that is focused on kind of increasing content consumption and people’s engagement and another that is focused on kind of efficiency and helping people to get the most value out of each moment that they’re spending in Facebook. And then the fourth group is our core business, which is focused on helping people to see the best ads and basically make the most money per moment that people are spending at the lowest cost and most efficiency in terms of serving people.

And there is, I think, big upside in each of those four categories. I mean, our community is growing. I mentioned in our comments upfront that time spent across our services grew by 10 percent year-over-year per person, which is pretty meaningful. Utility and efficiency are increasing and, of course, the ad business per person and the efficiency of our services are both increasing, as well. So I am pretty excited about that, and think we’re organized in a way where we can continue that.

The other opportunities — Instagram, Messenger and WhatsApp — I am really excited about, and I do think that they’re going to reach the level where they contribute to our business in a pretty big way, but it’s really important to get this right and not rush. And you know what I would say around messaging, as we’re pretty early in that cycle, we are about where Facebook was in around 2006 or 2007, where at that point Facebook was really just a consumer product.

There were no businesses in the ecosystem. And a lot of people were telling us, “OK, don’t put better ads in.” And that’s not wrong. I didn’t think that that was going to be the right way to build the products or build the business. So instead what we did was built pages, which was a way for businesses to interact for free in the system and start creating organic interactions between people and business. And we built more tools for pages and businesses to engage.

And our recent success with advertising is really just built on some of those organic interactions between people and businesses. And what you see in Messenger and WhatsApp now is that we’re still in the early end of that curve where the interaction is still primarily people-to-people, and businesses are starting to figure out in the case of WhatsApp much less than Messenger so far what the organic interaction is. But we’re going to have to go through a whole cycle of figuring out how that works before it really make sense to start monetizing them in a big way.

But yes, I mean, I am a big fundamental believer that these are going to be very big contributors to our businesses over time, but we just have to do it right.

On Atlas, she said:

In terms of Atlas, we just relaunched this fall, and we’re just seeing deals get done in broad adoption. So I think it’s too soon for us to report that Atlas drives an increase in digital spend or an increase in any particular kind of spend, but you should believe really deeply that Atlas is going to revitalize marketing by making the measurement more accurate. If you look at how digital ads are being measured, they are being measured based on a cookie-based world that assumes that people have one device, largely a PC. And that is not real: Consumers have phones, they have tablets, they have PCs, as well, and the ability to understand that one person and to serve an ad and measure all the way through correctly – we think it’s going to massively improve the efficiency in the system.

In response to a question from Wells Fargo analyst Peter Stabler about monetizing off-platform inventory, Sandberg elaborated on Facebook Audience Network:

Our Audience Network efforts are still pretty new. We have a goal of serving more relevant ads to people off Facebook, which will provide greater reach for Facebook marketers and also a better opportunity to monetize for publishers. We are seeing some nice results, as Shazam reported that using Audience Network increase its revenue from ad networks by 37 percent. We believe that working with publishers, if we can increase the value of their inventory by providing more relevant and targeted ads, they are going to be really happy with that opportunity, and we are in the early stages of finding those partners.

On Instagram, she said:

2014 was also the year we began scaling Instagram ads. In the fourth quarter, we rolled out Instagram ads in Australia and Canada. Marketers are excited to have access to the 300 million people viewing Instagram and the creativity it inspires. We’re seeing beautiful creative and great results from brand marketers across verticals from insurance and tax to retail and entertainment. For example, as one of our first Instagram video advertisers, Banana Republic developed a series of videos to promote its BR clothing lines. The video showed fashion sketches from the new collection and drove a 23-point lift in ad recall. While, it’s still early and we’re being deliberate in our rollout, we believe that Instagram will become core to advertisers and mobile brand building efforts.

In addition, speaking with Julia Boorstin on CNBC’s Closing Bell Wednesday, Sandberg said on Instagram:

We are excited about Instagram. We still don’t break out revenue by product, but excitement and engagement around Instagram is really growing. Instagram is a really special community with very visually compelling images that get people really engaged.

We had a really interesting case study recently with McDonald’s in Australia this summer. It did an Instagram ad campaign it called “Signs of Summer,” and what is interesting about it is that they were just pictures, and they had little to no branding or product, but they just included the kind of iconic McDonald’s red and yellow colors, and that showed a 46 percent lift in ad recall and a four-point lift in brand favorability.

And that is pretty interesting because it shows how these new formats like Instagram give us new and creative ways to build brands in ways that haven’t been done before. But even that really subtle branding can really work, and I think people are excited to take advantage of that opportunity.

RBC Capital Markets analyst Mark Mahaney asked:

Sheryl, the size of the ad revenue that Facebook is generating, in the growth — these are large budgets that are shifting over to Facebook. Any commentary on where you think those budgets are coming from? What are the sources of funds?

She answered:

I don’t think there is any single source of where the dollars are coming from. Certainly, as consumer time and attention is shifting to mobile, so is marketers’ time and attention. We pay a lot of attention to the marketer segments we work with. We’re seeing strong growth from brands from direct response like ecommerce, and from SMBs (small and midsized businesses) and developers. And we stay pretty focused not really on the source of where the money is coming from, but what are the objectives people are spending against on Facebook, so that we can meet all the different objectives. We understand that in order to continue to grow, we’re going to have serve multiple objectives on the Facebook platform, and that’s what we’re focused on.