Marketers encouraged to boost relevance, which lowers bidding requirement.
Like Google, Facebook uses a mix of bid price and relevance scoring to determine which ads to show. Starting this week, as an incentive for advertisers to improve the quality and relevance of their ads, the company is going to expose “relevance scores” (RS) to marketers.
Facebook’s newly exposed RS is effectively an estimate of the ad’s targeted alignment with its intended audience. Facebook believes the exposure of RS will produce a “win-win-win.” Better ads will be more interesting to audiences, perform better for marketers and generate more revenue ultimately for Facebook.
In its blog post the company explains how RS is determined:
Relevance score is calculated based on the positive and negative feedback we expect an ad to receive from its target audience. The more positive interactions we expect an ad to receive, the higher the ad’s relevance score will be. (Positive indicators vary depending on the ad’s objective, but may include video views, conversions, etc.) The more times we expect people to hide or report an ad, the lower its score will be.
Ads receive a relevance score between 1 and 10, with 10 being the highest. The score is updated as people interact and provide feedback on the ad. Ads with guaranteed delivery — like those bought through reach and frequency — are not impacted by relevance score. Relevance score has a smaller impact on cost and delivery in brand awareness campaigns, since those ads are optimized for reaching people, rather than driving a specific action like installs.
Below is a Facebook-provided image of how RS will be presented to advertisers.
Facebook also says that RS will help with A/B testing and creative optimization. They can watch the RS go up or down and adjust ad creative accordingly.
Ads with a higher RS will be more competitive at auction and ultimately cost less for marketers. However, Facebook is being careful to emphasize that bidding is still “the most important factor for success”:
Bid matters too. For instance, if two ads are aimed at the same audience, there’s no guarantee that the ad with an excellent relevance score and low bid will beat the ad with a good relevance score and high bid. But, overall, having strong relevance scores will help advertisers see more efficient delivery through our system.
Along those lines Facebook doesn’t want marketers to become fixated on RS. The company says RS “should not be used as the primary indicator of an ad’s performance.” Still it gives marketers another important metric to gauge performance.
Facebook said it tested relevance score with a number of advertisers prior to rolling it out. One of the beta partner-advertisers said it saw conversion rates improve by 20 percent.