Optus earns tenfold ROI with first Facebook News Feed ads

Rosie Baker
By Rosie Baker | 16 July 2014

Facebook wants brands to start paying for more posts in the News Feed and ramp up their spend on mobile as organic reach slides. For Optus, which ran its first paid for News Feed ads earlier this year, the shift is paying off with a tenfold return on investment.

The network is planning to increase its use of paid ads in the News Feed to convert customers from other telcos after the campaign also resulted in the lowest cost per acquisition of customers compared to other channels.

Chris Smith, head of online at Optus, said: “We wanted to drive more conversion, get more customers and for us that was around what new innovative ways we could explore to reach our customers. One good thing about Facebook is the reach, especially around mobile. In Australia there are 12 million monthly active people, and 10 million of those are on mobile. That’s a massive audience that we can reach.”

Optus visited Facebook’s HQ in Menlo Park to figure out an innovative way it could use the social media platform to reach and convert customers in a way that “had never been done in Australia”.

The Facebook campaign ran for four weeks, targeting users looking for a new handset within the News Feed as well as ads in the right hand bar.

In the eight weeks following the campaign, Optus saw a tenfold return on investment and the lowest cost per acquisition of any channel. Throughout the same campaign Optus also invested in display, search and affiliate activity.

“That’s important because in a saturated market – trying to get in front of those customers is becoming increasingly more expensive. For us we wanted to work in a clever unique way to reach those customers,” said Smith.

Facebook's global telco lead, Jane Schachtel, told AdNews that in mature telco markets, where penetration is so high, there aren’t many new customers networks can acquire so they must focus on brand differentiation that drives conversion to take share from rivals.

“What I would say in a market [like Australia] when networks are virtually at parity, they all have 4G, that’s when brand differentiation is going to be critical. Because if the services are all the same why would a customer choose you [over a rival brand]? With pre-pay you have the ability to choose and change [networks] with very little penalty. The way brands are thinking about that if they’re a challenger brand like T-Mobile in the US, or like Optus, is to use the Facebook platform as a brand marketing canvas,” she said.

“But at the end of the day brand consideration is great but it’s got to translate into subscriber numbers.”

Schachtel added that it’s about time mobile networks start diverting more of their marketing budgets into mobile to achieve it.

“IDC predicts telcos in Australia will spend 1% of total marketing budget on mobile marketing [this year] which is ironic. They are the very companies that have helped enable the very behavioural shift to mobile. Optus was a mobile first mover [on Facebook]. Saying that ‘we need to be reaching users on mobile where we’ve put them - on mobile’.”

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