Facebook Will Use Datalogix Offline Purchase Records To Show Ads The Perfect Number Of Times

Show someone a Facebook ad once and they’ll forget, 100 times and they’ll be annoyed. So Facebook is going to use offline purchase data to help businesses increase ROI up to 40% by showing them the “sweetspot” of ad frequency, it announced today at New York’s Advertising Week.

Privacy fears flared recently when the Financial Times revealed Facebook was working with in-store purchase tracker Datalogix. Facebook has since reassured users their personal data is only shared securely and they can opt out. Most won’t, and the data will let the social network draw a bold line from smart advertising on Facebook to big sales.

Right now, Facebook’s self-serve Insights analytics product tracks frequency for its advertisers, which it defines as “The average number of times each person [who was targeted in a campaign] saw an ad”. However, Facebook doesn’t currently give guidance on whether to show an ad more or less.

It does give advice on frequency to its top clients, but sharing personalized suggestions to all advertisers could get everyone earning a bigger return on investment and spending more.

That’s the plan. Facebook’s Head of Measurement and Insights Brad Smallwood wrote in a blog post this morning that “for every online campaign there is a “sweetspot” of effective frequency that maximizes return on investment, and that the DataLogix tool can help marketers empirically isolate that sweetspot for each brand and campaign.”

Meanwhile, Reuters printed that “Facebook says it will soon offer advertisers’ insight on the il deal number of ad impressions for a particular campaign.” I’ve spoken with Facebook and for now these reports on optimal frequency are only available from Datalogix, not from Facebook itself.

But I bet that’s going to change. Merely listing an optimal frequency within Insights would help, but allowing an easy way to cap frequency at that number would be better. Facebook might also add such frequency suggestions to its Ads API, making tools built on top of it know when to stop a campaign or sub in a new targeting parameters or ad creative.

The optimal frequency could vary widely across industries, products, or even specific ads. Facebook could teach a food brand that after a person sees an ad for a new cereal 5 times, paying to show them the same ad again doesn’t increase sales of the cereal. That means once it hits a frequency of 5 on the first audience targeted, it should expand to show ads to a wider audience, or cook up a new headline or image for their promotion.

This all comes as part of a larger narrative Facebook is trying to drive home: Clicks aren’t king. Since people generally buy cereal in a grocery store, just because ad viewers aren’t clicking through to a brand’s website or Facebook Page doesn’t mean they’re not being influenced by the ad impressions.

Facebook isn’t a direct click-through-and-buy-online advertising platform like Google. Facebook wants the marketing world to know its ads influencing buying habits, even if days or weeks later. That sets it up to suck ad spend away from a similar medium: television.