How Direct Response Is Expanding Social’s Role as a Conversion Channel

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Every brand with an online presence is doing something on social. But what many don’t realize is that social channels aren’t strictly for upper funnel strategies, like reach and message frequency. Brands can drive stronger business results by spreading their social strategies across all stages of the funnel, including lower-funnel, direct response (DR) tactics. As new tools and new user patterns have emerged, lower-funnel activities have become more prevalent on social platforms than ever before.

Our Adaptly data shows that DR activations have been gaining traction year-over-year on Facebook, Instagram, Twitter, Snapchat, and Pinterest since 2016. This trend has clear momentum, with 2019 DR investments again on pace to surpass the previous year.

Graph of Social Marketing Investment

Social Offers Unique Direct Response Experiences

Today’s social channels have robust capabilities aimed at generating conversions and achieving lower-funnel sales goals. Take Facebook’s Dynamic Product Ads, or DPAs. These hyper-targeted, personalized ads show products from a brand’s offering that viewers are highly likely to purchase, based on an algorithm of user behavior and pixel data. After a user visits your site and browses through your product catalog, an ad shows up in their Facebook feed containing the exact products viewed and/or similar products. But DPAs aren’t limited to retail products. Facebook supports unique dynamic ads for industries like travel and automotive, and the tool can realistically be used by any brand with an ecommerce or catalog component to their site.

Instagram is also pushing into direct response with its new in-app purchase feature, Instagram Checkout. Still in its early stages, this feature encourages users to buy products directly from a brand’s organic Instagram posts and Stories, and from the Explore page. While ads don’t support a shoppable feature, they do offer a whole new distribution stream via influencer marketing. For example, users can buy an outfit featured in an influencer’s post using shoppable product tags. Ultimately, users no longer have to leave Instagram to complete a purchase; according to TechCrunch, this could produce “better return on investment, because there are fewer steps before purchase.”

Facebook and Instagram are the standard-bearers when it comes to direct response marketing, but other social channels have made notable ad innovations in the last few years. Though Pinterest and Snapchat have historically been top-of-funnel, awareness-focused channels, both are increasingly catering to brands with DR-friendly tactics.

Like Instagram, Pinterest is a visual platform, making it the perfect place for ecommerce DR activations. The platform has become shopping-focused this past year, launching a series of initiatives to make the platform experience more shoppable. New features include pixel-driven personalized recommendations for users and spaces for brands to natively host their product catalogs and create shopping ads with targeted distribution. While users can’t yet buy directly on Pinterest, brands can bridge the gap with product-rich pins, which allow them to show up-to-date product information. As a visual search tool, Pinterest is uniquely positioned to offer lower-funnel bidding options and revenue-driven objectives for advertisers, and it’s likely the site will continue to expand on these abilities in the coming years.

Snapchat has also gradually become more advanced with lower-funnel capabilities, releasing new ecommerce features for brands, including shoppable ads, product catalog integrations, and more. Finding an audience on the ephemeral social media app can be difficult, but these new DR features bring attractive low-funnel options to the table for more advertisers. Digiday reports that Snapchat’s advanced pixel-targeting capabilities have helped direct-to-consumer companies achieve up to 50% lower costs per acquisition on the platform.

These are just a few of the top ways brands can use advanced social ad units to their benefit for lower-funnel activations. While these instances are especially applicable to ecommerce retail advertisers, our research and experience shows that brands outside of the retail space should also look to invest their DR budgets on social.

How Non-Retail Industries Use Paid Social to Activate Direct Response

Retail brands naturally gravitate toward direct response on social because of ecommerce integrations, but new ad tools appearing across social channels and a growing demand for bottom-line results mean that all brands are positioned to drive more lower-funnel activity on social. Although the retail industry sets the example, the methods can benefit brands across all industries.

Adaptly data shows that industries outside of retail are already using social platforms to activate lower-funnel activity. Industries like travel, CPG, auto, and financial services have found ways to leverage lower-funnel tactics on paid social platforms. Looking at financial services, for example, we’ve helped brands successfully activate DR across digital platforms.

Graph of Financial Services Social Spend

Those DR activations have been growing since 2016 for financial services on Instagram, Twitter, and LinkedIn. Facebook is the one platform that saw a decline in conversion spending for finserv, as advertisers focused in on full-funnel strategies and began to balance their investments across all three stages of the marketing funnel.

The financial services industry has a distinctive audience, and social is the best place to reach many of its niche segments. Most finserv offerings – like life insurance, money management, and financial planning – are tied to important life decisions. As a result, it can be a challenge to convert customers, and the consumer journey is often protracted. For these brands, social media is an essential marketing tool, allowing them to find qualified leads, personalize their messages, and scale their campaigns to a targeted audience.

Target Niche Audiences to Convert the Most Qualified Users

With audience targeting on social media, you can take calculated steps to distinguish audience segments and begin generating conversions. Using demographic, psychographic, and lifestyle factors, social offers unmatched targeting that refines complex idiosyncrasies into audience segments; for example, brands can select users who like “X behavior, but not Y behavior,” or “those interested in X and Y, but not Z.” Beyond interests and behaviors, you can key in powerful demographic parameters specific to your customers, like age, relationship status, education, and financial status. This limitless segmentation not only lets you target a refined audience, but you can also effectively test new audience segments against your brand’s offerings.

In the case of a global financial services brand that worked with Adaptly to develop a paid social media strategy, identifying the right niche audience was just the beginning of success.

Financial services customers have a much longer customer journey than those buying, for instance, a retail product like a shirt. In most cases, finserv brands have to engage drawn-out, top-of-funnel tactics before acquiring leads and moving to lower-funnel action. It’s here that paid social proves indispensable, as it gives brands access to users at every stage of the funnel. It helps brands nurture users along their journeys, from awareness to consideration and ultimately to conversion, using strategic targeting tactics to drive success at the bottom of the funnel.

For the financial services advertiser that we worked with, this meant shaping their strategy to include a process for driving users to conversion through paid social. The strategy had three general phases, which can be replicated across industries to drive lower funnel actions.

– Step 1: Tagging and driving users to the brand’s site for more traditional mid-funnel activations, i.e. information collection and product comparison.
– Step 2: Segmentation of specific retargeting buckets and catered messages across the different lower-funnel ad units to move users from consideration toward the conversion stage of the customer journey.
– Step 3: For users who interacted with certain landing pages and showed interest in the offering, retargeting tactics were used to continue to engage with these users until the final point of conversion.

Because of the robust targeting and varied ad format capabilities available on every social channel, we worked with the finserv brand to activate across a mix of platforms. This decision not only helped us reach the right audience, but also gathered the high audience volume needed to generate conversions, which had been harder to achieve using other digital marketing methods. Many brands run into the same issue when trying to develop significant reach, and social is steadily proving an ideal avenue for expanding audiences to use as demand generation down the line.

The Next Wave of DR Activation on Social

While social channels have historically been prioritized for their awareness-driving capabilities, they are continually developing middle and lower-funnel offerings as well. As consumer shopping habits continue to evolve online, and as brands look for new and unique digital advertising potential on existing channels, social platforms like Facebook and Instagram will prove increasingly useful avenues for direct response tactics. While we still recommend activating across the full funnel for the best overall return on investment, the lower-funnel ad units and targeting capabilities on social should not be left out of any digital media plan looking to drive bottom-line results.

Each social platform serves its own unique function, and each brand’s industry, messaging, target audience, and goals will dictate how to best invest at every level of the funnel. Learn more about why you should implement a full funnel strategy, and discover which are the best ad types for each stage of the funnel. Or, if you’re looking to set up a social strategy that delivers on real business goals, reach out to our team at Adaptly.