Facebook to launch advertising ROI tool

Facebook is testing a tool it claims will help marketers track the return on investment from advertising campaigns on the social networking platform.

Facebook is testing a tool it claims will help marketers track the return on investment from advertising campaigns on the social networking platform.

The 1 billion user-strong social network has been under ever greater pressure from marketers to prove the ROI of its advertising, and it claims the tool has been "highly requested.”

Facebook went public in May, and its stock price plummeted shortly thereafter. Since then, it has worked to prove the value of advertising on the social network. That issue was in the spotlight in May when General Motors, one of the world's largest advertisers, pulled its ad spend from Facebook.

The social network's new conversion measurement tool follows off-Facebook actions generated from Facebook ads. These actions could be check-out clicks on an e-commerce site or a registration, for example.

The goal of the tool is to help direct marketers, such as e-retailers.

Facebook claims the product, which is available via its Ads Manager, will help marketers optimize future campaigns for better ROI. It also enables advertisers to use optimized cost-per-impression (CPM) bidding to show ads to people more likely to convert on their off-Facebook site.

It plans to roll out the tool globally at the end of this month. According to Facebook, designer items retailer Fab.com, which has been testing the tool, has dropped its cost per acquisition by 39% after optimizing its CPM using the tool.

This article first appeared on the website of Marketing, PRWeek's sister publication under Haymarket Media.

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