Understanding the Fully Optimized and Automated Ecosystem of Facebook


Ever wonder how optimization algorithms such as oCPM or lookalikes work? The first part of our series described Facebook’s budget pacing algorithm. Now we reveal the secrets of the oCPM bidding and how to use automation in general for competitive advantage in the ecosystem.

Facebook’s Latest Algorithms at Your Service

Did you know that Facebook knows people better than anyone else? The amount and quality of data is their competitive advantage: they don’t just know your location, age and mobile phone model but also when you fall in love. Both lookalike and oCPM algorithms utilize approximately 100,000 different attributes per person to find the most relevant Facebook users for your marketing campaigns.

Facebook’s lookalike algorithm lets you find new people who are likely to be interested in your business. It helps you reach people who are similar to your current customers, page fans, mobile app users or website visitors. If you want to build a lookalike from your CRM data, the algorithm requires emails, phone numbers, Facebook user IDs or mobile advertiser IDs.


Elvis lookalike from Norway

From CPM to oCPM – Towards Next Generation Bidding

Optimized CPM is the most innovative bidding type invented by Facebook’s engineers. Like the lookalike algorithm, it identifies the people from your broad target audience who are most likely to take an action on seeing your ad – e.g. purchase a product at your web store. However, oCPM needs click and conversion data in order to identify the right people from a broad audience.

How the oCPM Algorithm Works

As in all of the Facebook bidding methods, your oCPM bid is converted into a comparative metric called effective Cost Per Mille (eCPM) before the auction. The eCPM can be calculated from oCPM with the following formula: your maximum oCPM bid * estimated conversion rate (eCVR) + quality score. Please note that the quality score is a broader metric than the relevance score.

In the beginning, the oCPM gives the ad some impressions to calculate estimated conversion rates (eCVRs) for everyone. Along with the eCVRs, the algorithm utilizes about 100,000 attributes Facebook knows about your audience. The algorithm predicts the individual conversion rates based on different attributes – such as age, likes, mobile phone model. For example, young single people using the latest iPhone could have higher predicted probability to convert. Thus, the eCPM bid is more competitive for the people with the higher estimated conversion rates. The eCVRs and eCPMs will be updated as the algorithm collects more conversion data.

The first day of your campaign does matter: achieving high click-through and conversion rates are crucial success factors. The more click and conversion data the campaign gets, the smarter the oCPM algorithm becomes. Please note that the oCPM uses data from the last 24 hours, so the algorithm needs new conversion data every day. In addition, oCPM for actions requires a conversion rate (CVR) of 0.5 percent or more with a 1 day click-through window in order to work effectively. Having large target audiences and high bids help to attain this. If you have trouble getting enough conversions, you can try to change the action eg. from a web store purchase to a landing page or something else upper at the conversion funnel.

The Optimized Ad Format: Multi-Product Ads

Showcase 3-10 images and links within a single ad unit to direct people to specific locations on your website or mobile app. This feature will optimize the performance of your ad by selecting and ordering the best-performing images and links automatically. Using the new ad format, Multi-Product Ads for Mobile App Installs, to promote its app, our customer Foodpanda increased click-through rates by 180 percent and reduced their cost per install by 39 percent.


Say No to Manual Campaign Creation

With Automated Ads you can automate ad creation with a product feed, both for prospecting and retargeting campaigns. The feed updates your ads in real-time, and each ad is automatically archived when the offer or product is not available anymore, based on for example stock information from the feed. New additions and offers in your product feed are automatically added to your campaign as new ads. As our customer Mark de Louw from TravelBird said:

With Automated Ads, we cut the time spent in campaign creation by 75 percent, saving 15 hours every week.

Readers: What do you think of Facebook’s latest ad models?

Kalle Tiihonen works as an Account Manager at Smartly.io, one of the fastest-growing Facebook Marketing Partners in Europe.

Featured image courtesy of dolphfyn / Shutterstock.com.

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How to Create Your Social Media Marketing Ecosystem [INFOGRAPHIC]


Convergence in the Social Web Ecosystem

In order to explain convergence in new communications we need to move beyond a single dimension to build interactive ecosystems. They will be based on channels, media, platforms and Social Web tools to create both internal and external communication and marketing processes that enable us to implement an online strategy for our company.

The Social Web’s Ecosystem: History

Every day, Mashable, Social Media Today, SmartBrief, Fast Company or Tech Crunch surprise us with new social platforms and tools that become a part of what I call the Social web universe. When I wake up I start to think about how many platforms and channels I’m missing out on every hour I’m sleeping. Why sleep? That universe is part of what they call the jungle, a place where everyone is trying to feast on each other for survival, the perfect metaphor to describe the business world. As I say is that it all depends on your approach: a biologist would see an ecosystem where we see a jungle, and that’s a term which I think is brilliant to talk about the Social Web.

When I was in London, meeting with the guys at Blur Marketing with whom I collaborated as Social Media advisor, I met a visionary guy who made me think about the way to integrate the Social Web in the communication process. And so I worked on the ecosystem concept to redefine a company’s social communication process.

The Ecosystem

Biologists have developed a classification system to group animals, plants, bacteria, fungi and protists inhabiting the ecosystem into categories. Using such a system makes it easier to talk about the living world. Right, so using such a system for the overall Social Web may come in handy to understand the role that these “organisms” play in our environment and what changes arise in communication. However, and this is no biggie, the Social Web hasn’t been the topic of debate and discussion for 300 years and there still isn’t a universally accepted classification for the system of tools and platforms that the Social Web has to offer, its different implementations or channels. This really isn’t too important, we just need to go on about this for another 300 years…

I don’t believe I’ll live that long, so I’ve taken a small sample and classified them into sizeable categories that may help us visualize and understand how to integrate many of these social platforms, tools, media and channels we use today and in what processes… and some we won’t use just yet.

What follows is what I’ve called the Social Web Ecosystem, and is valid for individuals and companies alike.

1. The outer ring of the social web ecosystem is the social implementation ring. It runs around the social platforms which form the first level: social interaction ring. We can find a great variety of tools within the area of social implementation that will help us redefine the internal communication process, although we may also use an inside-out approach since many of its components work as amplifiers on the scope of social platforms. Example: active listening can work on platforms such as Facebook, Twitter, YouTube, Blogs or Flickr, depending on the particular features of each of these tools.

Social tools are also used to interact with the WE-B and different social media “organisms”. As you can see, many of them are connected through the first social interaction ring.

2. Any communication process – the outermost ring – is started through the social interaction ring. Each of the spheres represents a category of different social media “organisms”. We have to make sure that each one seeks a specific objective within the ecosystem. That is why it’s important to appoint a different use to each of the elements that make up the ecosystem. Of course, like the elements on the social implementation ring, they also play a role: internal, external, support, amplifier, attribution, scope or complement to the social platforms (first ring). However, the true power of this ring is the relationship that exists between the different agents (as I explained in the Social Media Integration Model which was published by Social Media Today many years ago) and how they interact to make the multidimensional functioning of the ecosystem possible.

3. We are the WE-B and everything spins around this: people and their environment, interactions and human relations that take place online and which have an effect beyond the Internet. People are the true core of the Social Web ecosystem; we’re at the centre of it all. Human Business Interactions take place through the WE-B, allowing the process to create interactive social media ecosystems based on resonance and emotional alignment with the different parts involved in the process. This means that the available tools, media and objectives can be used to make people, communities and companies generate business opportunities.

How to Use it

As you can see, I have assigned a use to each of the ecosystem’s “organisms”, assigning different functionalities trying to avoid any overlap. There will inevitably be some overlapping. This is when the singular features of each element and the opportunities to segment factors come into play, together with the implementation and interaction with different areas. That is where its greatest potential is reached.

Take these tools and platforms and develop a strategy that makes sense based on the use you will give each of them, geared towards one or two objectives. Set tactics, resources and a timetable for each of them. When you’ve finished, you will realise that you have designed an ecosystem that is custom-built for your company. By the way, it looks fantastic!

I’ve already come up with one, two or three uses for each platform and tool. Some will be complementary, others will be different. The main idea is that when you look at “the big picture” (the overall ecosystem) you will have built an online strategy.

Your mileage is OK

There are different paths to reach the same place. That’s why I’m sure you will find, or indeed may already have, your own ecosystem that is just as valid or even better than this one. If that’s the case, great! Otherwise, I hope I’ve been able to help you to slowly redefine your company’s communication process.

I’ve tried to streamline the process to make it more efficient. That’s why I’ve used the tools and platforms that best fit any company’s ecosystem (that is, in any company’s communication process) taking into account the expertise and practical knowledge I’ve accumulated over the years. The use of such an ecosystem doesn’t exclude the use of offline media; rather it is a complement to such use, but that’s another story (perhaps for another post!).


What do you think? Was this of help? Does it make sense? Could you redefine your company’s brand communication process using something similar to this? When you draw your ecosystem on the Social Web, what does it look like?

Would you like a high-res version of the diagram? Contact me on Twitter or let me know privately so you can get it through the letterbox soon!

Thank you to Odosdesign for such a fantastic design of the ecosystem I had in my mind.

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