Let’s go into Facebook advertising model, and set ourselves up a fake campaign, as a way of thinking through how Facebook package and sell their audience to advertisers.
The advertising model shows us how the audience do two kinds of labour.
First, by allowing the platform to monitor them they do the work of being watched, of providing the data that enables advertisers to target them.
Second, by using the platform and viewing advertiser’s posts in their news feeds they do the work of watching, of paying attention to advertiser’s messages.
Let’s see how Facebook use the data generated about audiences to sell refined moments of audience attention to advertisers. To do that we’re going to have a look at Facebook’s advertising creation tools. The advertising tool illustrates how Facebook packages audiences that can be endlessly customised and configured based on audience preferences.
Here, you can see how your individual archive of data becomes useful when put into combination with the hundreds of millions of other personal archives Facebook has. OK, so you go back to that menu up the top of the page, the drop down arrow at the far right of the blue bar across the top of the page. Drop it down, you’ll see the ‘Create Adverts’ link, hit that.
First thing you’ll see is a screen asking you to specify for your campaign objective.
Choose one and then set up an account.
You need to enter some basic info: make it Australian currency and time zone. And then hit ‘Continue’.
OK now we are through to the part of the model where Facebook uses its data to help you configure an audience for your advertisement.
There are three important parts of this page. First up, see on the right hand side the ‘audience definition’ panel. It starts off by defaulting to all users in the United States. You can see that 212 million users, and the little meter tells you that’s a very broad audience definition. Then on the left hand side you can enter in details about your audience to refine it. Once you have refined your audience you then scroll down to the budget section to find out how much it costs to reach that audience.
OK, so first, let’s define the audience. Start off by making the audience yourself, see how many people like you Facebook can reach and what it would cost.
First I enter ‘Australia’ and it says 14 million. I change that to ‘Brisbane’ and immediately it reduces from 14 million to 1.5 million people who I share that characteristic with. And, you’ll see on the audience definition meter I’m now in the middle. And, you’ll see it shows on the map the geographical positioning of this audience.
Then I’ll change the age range to a five year window around my age. Y’know – late 20s to mid 30s. You do the same for your details as we go through.
OK, the reach now once I’ve filtered for age is 220,000. If I make it only men, it splits it again down to 110000.
Where it gets interesting is on the detailed targeting and connections. So, with detailed targeting this is where we start to add interests. OK, if I add ‘craft beer’ it narrows it right down to less than 1000 people. If I change it to ‘beer’ though it comes in at 29,000 people.
If I ad beer and coffee it goes to 41000 people. So, that’s Facebook telling me that there are 41000 men about my age in Brisbane who like either beer or coffee.
You’ll see below, I can narrow it further, by clicking the ‘narrow audience’ link. Here, rather than search ‘beer’ or ‘coffee’, I’m going to delete coffee from the first box, and add it to the second. So the equation becomes must like ‘beer’ and ‘coffee’. I do that and it comes out at an audience of 22000. Then if we click on the left ‘Budget and Schedule’, we can see what Facebook would charge us to reach this audience on both Facebook and Instagram.
Let’s change the budget to $50 a day. If I spent that much, Facebook estimate I could reach between 1300 and 3500 people per day on Facebook and 3900-5100 on Instagram. What’s happening here is a live auction. Facebook works out how much ‘space’ it has on the platform and sells it to the highest bidder. The more refined the audience, the more you might pay because you are competing for a smaller slice of attention.
The more competition there is for that audience the more you might pay. So, if you are the only advertiser that wants to speak to older men, you might pay less than for a demographic where there is high competition to speak to them. Let’s fiddle with it a little. If I change the demographics from men in their early 30s, to all men and women between 20 and 50 who like beer and coffee, you’ll see the audience size jumps back up to 220000.
Then, scroll back down to the budget. Facebook is now telling me for $50 a day I could reach up to 12,000 people on Facebook and 65000 people on Instagram. OK, to look at the dynamics of the ‘live auction’ that takes place though, change ‘daily budget’ to ‘lifetime budget’ and set the period for one month starting today. It tells me that for $350 I could read 1600-4200 people per day on Facebook over the next month.
But, say I’m a big player and I really want to speak to this audience. I could tell Facebook I will pay more, effectively outbid the other advertisers in the market. So, say I bump my budget way up – to $10,000 for the month. Facebook will now sell me 14000-36000 slots per day. OK, but now let’s go higher. Say, I have basically an endless amount of cash to throw at this campaign.
For $100000 Facebook would give me up to 78000 people per day across the month. It ‘tops out’ at about half the audience. Facebook won’t sell a single advertiser more than that. Most likely because it would affect engagement with the platform by swamping feeds with repetitive content.
The bigger the audience is the more ‘slots’ of advertising space you are in the auction for, but also the less refined your audience is so your advertisements might be more hit and miss.
Another factor to keep in mind here is that there is a ‘balance’ Facebook have to strike between advertising and audience engagement. If you logged onto facebook and saw only ads, or too many ads, in your news feed, and not enough posts from your friends you’d probably stop using Facebook. And, if you and many others like you stopped using Facebook it would have no audience to sell to advertisers.
So, Facebook runs data analysis to strike the right balance between putting ads in your news feed to generate revenue, but not so many that you stope engaging with the platform. It needs you to keep coming back to be able to keep selling slots in your feed to advertisers. The audience product that Facebook are packaging and selling is quite different to the traditional packaging of audiences by commercial media organisations. I’ll illustrate this using Frankie magazine's media kit.
The ‘media kit’ is the traditional way that advertising funded media like magazines, television and newspapers have ‘promoted’ their audience to advertisers. In this case, Frankie magazine has a media kit that ‘packages’ their audience to explain to advertisers who they will reach and be able to influence if they purchase advertising space in the magazine. The first and most obvious difference between the Frankie media kit and Facebook’s advertising tool is that you cannot ‘configure’ the Frankie audience based on specific characteristics.
This is arguably Facebook’s advantage, offering a configurable audience. Facebook can also provide very accurate data on who views or clicked on the ad. Frankie cannot. But, perhaps Frankie’s advantage is the durable and ongoing relationships they establish by forming a specific audience that regularly reads the magazine.
Let’s look through their kit though, you’ll see that they ‘describe’ their audience using many of the variables we saw in the Facebook model. First page tells us you can reach 340000+ readers per issue. The third page tells you the demographic variables: the audience is 70% female, has a median income of $75000 and is between 20 to 35 years old.
94% visit websites they read about in Frankie, 89% have read it for more than a year, 96% consider themselves to be creatives, 89% feel inspired after reaching frankie, 70% have purchased something after seeing it in frankie. The frankie audience as a whole spends 23 million dollars online. This is based on survey data from 2015. Frankie have less capability to let you configure your audience, for instance you cannot say to Frankie – OK great, but I only want my ad to be seen by your male readers, not your female ones. Facebook can let you do that.
While the Facebook model we see does not provide information about other web use or purchasing habits, Facebook do provide this functionality to large clients. They especially do this by getting clients to link their customer databases to Facebook’s data sets to evaluate how Facebook ads impact on purchasing actions. Then, Frankie go on to explain how they take great care to ensure that your ad fits the right ‘vibe’ of the magazine. So, there’s a real attention to creative control between brands and magazine.
Facebook also pay attention to this, but not with human judgments about the quality of ads. Rather, Facebook use data on click throughs to gauge how readers respond to ads, and ensure they get the right balance between the quality and quantity of ads and user engagement. OK then on page six of the Frankie media kit we can see what they charge for ads. $7200 for a full page ad, $14,400 for a double, $11150 for a back cover.
OK, now let’s go back to that Facebook advertising model. If you Go to Facebook’s ‘Create Ads’ set your location to Australia. And the demographic variables to match Frankie’s. Gender: female. Age: 20 to 35. Facebook is giving us a reach of 3 million. But we want to narrow that some. OK, we know Frankie readers are creative, into fashion, craft, design. If I narrow the details to women between 20 and 35 who like both fashion and interior design. Then change the ‘daily budget’ to ‘lifetime budget’ and put in $7200 – what a Frankie ad costs. And make the schedule one month.
The estimated daily reach is up to 43000 on Facebook and 38000 on Instagram. So, conservatively 25000 a day. Or 750,000 in a month. That’s twice as many as Frankie. But, I could continue refining this audience.
If you buy advertising you don’t want ‘wasted eyeballs’ – as it’s called in the industry – that is you don’t want to pay to put your advertisement in front of people who are not in your target market. This is Facebook’s big competitive advantage. It claims it can put your ads in front of the exact people you want to talk to, when and where you want to talk to them. But, as we see when we read Frankie’s media kit, there are other judgments that matter too, like the relationship a media organisation establishes with its readership and how it leverages that.
For our purposes though, we can think about how two different media organisations package and sell their audiences to advertisers. In this respect, we might see our activity on Facebook as ‘productive’ – we do the work of registering our lives as data that enables ads to be targeted at us, and then we do the work of viewing and clicking on those ads, and sometimes liking and sharing them too. The engine room of commercial media businesses is creating, packaging and selling audiences to advertisers. Media platforms depend on the creative and continuous work that audiences do in expressing and registering data about themselves as part of their everyday lives.