Facebook & Google In-House Ads Accounts: How to improve media buying Transparency

During the last weeks I had to explain this issue several times, so I realized I should write a new Blog post to save time in future meetings 😀

With this article I pretend to introduce the big value that in-house accounts can provide to every small and medium company. Overall it will help to:

  • Increase transparency
  • Maximize investment
  • Boost performance.

I will based my article on the Facebook and Google accounts as these two ads platforms allow you to invest in media on Facebook, Instagram, Google Search, YouTube, G-Mail, Maps and GDN however we can extend this to any other traffic / media buying platform that offers a client panel.

Ok…. So, what is the problem? Why is there an overpricing on Facebook and Google media purchases? How is the current situation?

The chart below could be a good intro of the scenario. Let me go step by step:

Blog VisualsChart

Let’s say that Mc. Donald’s has a brand new product that wants to boost and asks their Digital Agency (lets say…. Ogilvy, Leo Burnett, Dentsu or other digital group) to run a campaign in Facebook, YouTube and Facebook. For the example I will chose Dentsu due to the recent scandal commented to by the Financial Times they had in Japan for similar practices.

Long story short, the key problems starts when the Vendor proposal doesn’t provide:

  • Final performance of Clicks (CPC) / Engagements (Cos per engagement) gaps* based on Facebook/Google Ads estimations or variable costs. Instead of that, Vendors tend to propose fix Unit Cost (cost per click, cost per engagement, etc…) that most of the times are three to four times higher than they are actually paying to Facebook on average.
  • Access to the client to their Facebook / Google Ads accounts
  • Support to their clients to create their own accounts

At this point, some of you may think:

  1. Why should they provide a gap? – Most of the big digital publishers (Facebook, Google, Yahoo!…. do not have fix pricing lists but complex bidding systems (click her for further info)
  2. Why they bill 3-4 times the price they pay to Google/Facebook?

I may be defending the devil but it is true that there are several reasons to behave in that way like:

  • As a back-up in case they fail in their estimation.
  • As a back-up to spend less time in optimization/set ups.
  • Media budgets are usually 20% – 50% of the total costs. Big agencies charge big fees in creativity and content direction that cover media overspending.
  • To earn more money – Good agencies. Good optimization teams master their jobs in order to boost the gap from the ‘Unit Cost’ accepted by the client and the price they finally pay to the publishers
  • To ease quotations and boost long term plans.

Given this point, the agency (usually) finishes the quotation with a unit cost a way higher than the market price.

  • The agency delivers a proposal:
  • The Client approves: Let’s go!
  • The Agency uses their own accounts to work with the publishers:
  • Facebook Business Manager Account to pay Facebook for Facebook ads, Instagram Ads, etc…
  • Google Adwords Account to pay Google for ‘Google Search Network, GDN, YouTube Ads, etc…

Facebook and Google deliver ‘performance report’ and ‘bills’ (this is the key) to the Agency, not the client. Afterwards the Agency sends back the invoice but they (almost never) include the Facebook or Google Invoice…. In other words… The client has no clue of how much money the agency paid for the services!!!!

This is a big problem because Mc. Donald’s actually cannot request Facebook how much money the agency spent on the campaign:

  • Facebook client is Dentsu, not Mc. Donalds’s.
  • Facebook has no liability of giving any explanation to Mc. Donald’s.
  • Facebook is not allowed to display any data of Dentsu account without their approval.

Damnnn, how can Mc. Donald’s solve this issue:

Chart II

Ask Dentsu to grant you access to their account: agencies usually reject this option as they say that there is info about other clients they do not want to share

 

In-house accounts.

By having in-house accounts Clients get the full control of how much money is spent in Facebook. Given this point, Clients have two options to run campaigns:

  1. Let the Agency use their account: By granting advertising permissions to the agencies, Clients can monitor the performance and the budget spent by the vendors. On top of that, they can access to the detailed performance information and develop digital know-how of the industry for future plans
  2. 100% In-house campaigns: Clients can run campaigns by themselves without agency intermediaries, which usually saves the ‘agency fees’ plus the VAT costs. Recommended only if the ‘head of digital’ has a strong background and extended experience
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Key Marketing Principle: Fast / Good / Cheap – You can only have 2

 

In a small alley of Hortaleza, the Madrid suburb where I grew up, there used to be a well-known mechanic that had a pretty famous billboard that said: ‘Rapido / Barato / Bueno – Solo puede escoger dos” which basically means: ‘Fast / Cheap / Good – You can have 2, only’

In other words, the man tried to summarize that:

  • If Fast & Cheap: He could not guarantee a good result. If not him, some junior assistant would do the job or he would it quickly and may deliver a botched job
  • IF Fast & Good: Not cheap. He used to be a good mechanic compared to other mechanics of the area, and his time had value.
  • If Good & Cheap: Not fast. He did not guarantee any timeline as he managed to cut the budget by doing the job on his free time or by delegating it on his junior assistants that he tried to monitor as much as he could.

goodfastcheap1-1This is one of these sentences I like to use with clients or peers that ask me for last-minute requests and (of course) with limited budget. As you can imagine, this principle works if you want to repair cars, motorbikes and especially with Digital Marketing Plans or websites (usually cheap and fast websites end up in big disasters as most of you may already know) but surprisingly it also works with complex bidding systems like Google Ads.

Using ‘Google Search Network’ as an example, we got the same principle by replacing ‘demand’ with ‘quality’ : usually high demanded keywords come with high volume and respond to clear needs…. in other words… are high quality keywords.

 

Image result for bidding icon
Google Search Network uses a ‘Bidding Systems’ to distribute traffic

More to the point, Google Search Network give us three options with our ads selection:

  1. Fast & Good: Not cheap. if I want a big volume of high demand clicks in short term I will have to pay a lot for it.
  1. Cheap & Good: Not Fast. One of the good things of Google and YouTube Ads have is that you are allowed to set up low bids for clicks and views (Search Network and YouTube Ads respective). By doing that, Google and YouTube will deliver you residual volume with low competition and usually at a much lower price… however be ready to extend your campaign for months to achieve normal volumes….
  1. Fast & Cheap: Not good. If I really want a lot of cheap clicks in short term, probably I will have to go for non-popular keywords or related to low demand businesses. This is something that can change if we spend time in finding the long-tail keywords tailored to our business. The only problem is that agencies usually cannot do it (or just do not want to spend time) very well and clients are the ones that have to spend more time doing research.

Have you ever had a similar situation where this sentence describes your services? 😉

Facebook CPC and CPM among ASEAN countries

Some weeks ago I got one of these non-common campaign requests that pushes you to write a new post, however I recognize I couldn’t foresee such a big performance contrasts among neighbor markets.

An Indonesia perfume manufacturing client based in Indonesia requested a regional  Facebook Marketing campaign in 13 countries,  7 of them in the ASEAN region, for a brand new product launch . The campaign should kick off at the same time and there was no previous data to use as a reference

As it was a brand new product for a new brand, we agreed to go for a testing campaign to see whether the Facebook “estimations” were good or not. In this research there are other non ASEAN countries like Sri. Lanka, Taiwan or Korea are not part of the but I keep them as it may be a good reference for other readers 😉

As a branding campaign, the main objectives were clear, get a first reference of each country for:

First step: find some third parties benchmarks. After some research, lots of  Facebook official partners samples and some extremely funny reports (the Sales Force one  that allocates Vietnam in Korea) it is easy to realize that most of the available data was not very trustworthy.

Sales Force Benchmark.png
Salesforce Report: nice chart, nicer bug 😀

Overall,  some minutes after doing this brief research I decided to make my own and write this post 🙂

Second step: Facebook estimation. Secondly, its recommended to compare the Facebook estimations you get on the Advert Set configuration (this info is showed only in Manual configurations) .

Bidding
Estimations are shown in local currencies. In this case, our account is based in Vietnam Dongs – VND

 

After doing the set-up for all these countries, here it is the ‘Facebook CPM suggestion’ for this pool of countries:

Facebook CPM estimation
As you can imagine, we decided to quit Japan

Third step: testing phase.  After doing that we were ready to go for the testing campaign. Some notes:

  • Same set-up: Campaign optimized to obtain a low cost-engagement. Reccommended for branding.
  • Same banner.
  • Same audience indicators (simple audience  set-ups are recommended in testing campaigns, once you get experience in that market, you can use this numbers as a reference to optimize)
  • Same wordings: content. To be a 100% accurate benchmark we should have used local languages, however our time limitation forced us to do everything in English
Target Audience
Audience set-up for Malaysia

So, after 6 days and $600 among the 8 countries, here we have the results:

 

CPC.png

Overall, the Cost per engagement was much lower than expected, which was good news in terms of branding. The CPC performance was obviously bad due to the engagement-optimized set up, however I recognized that I expected better values at Vietnam and Myanmar. Taiwan surprisingly high and Malaysia high too considering how English friendly this country is

Ultimately, let’s analyze the quality score of the same banner and content for each country:

 

 

NOTE: This campaign was done with one single post. The post was exactly the same for every country (image and content). Text was typed in English which should carry out lower costs for English friendly countries like Malaysia, Sri Lanka or Philippines

The campaign belongs to Chemarome, a multinational fragrance producer that operates in Europe, Asia, Middle east and Central Africa.

 

 

 

Marketing Principles

In this section you will find some marketing basics that every marketing plan needs to consider.

Most of the Digital Marketing blogs are extremely oriented in boosting reach, clicks and other user-interactions (so we are) but they forget the principles of why this plan needs to be executed and how to align that performance with the company business goals in short, mid and long term.

Many successful entrepeneurs and corporation think that marketing is not necessary to achieve success, and we do believe that’s good in part: if your product is amazing and there is no competition, you will always succeed. Nevertheless,  in digitalmarketigV&V, we believe that a well executed marketing plan congruent with the environment and linked properly with the business goals and customer needs of a company, brings this corporation closer to the position in the market the board wants/needs to achieve.

In order words, good marketing saves your time. You can succeed without marketing, but you will need much more time

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