Facebook hasn’t been this easy in years, here are the 3 most important things you need to know!
Audiences & Data
The single most important thing about Facebook is to remember that it trains in the currency of data & attention.
Facebook relies on the data of what it sees in the platform & from the pixel to determine who should see each ad. Even with the world's most restrictive privacy settings, Facebook will always be able to see what content you engage with, where you’ve spent your money, how long you spend on sites after clicking on links from the platform, and what type of content you want to see, and where, and when you want to see it.
Understanding that every piece of content collates its own data and creates its own audience, is fundamental to understanding how to maximize the success of Facebook. Gone are the days of needing to use targeting audiences or manage customer journeys through a funnel! Not only are these methods less stable, but they also lack the ability to scale and create the issue of rising costs over time which makes Facebook ads unsustainable.
When we use targeting audiences, what we are doing, is paying extra to exclude users who might be ideal. The reason that audiences, and ads, ultimately fatigue is because the cross-section between the audience the ad appeals to, and the highly restrictive exclusions that we’ve placed on where it can go, ultimately runs dry.
The more often you force ads to be shown to people who do not have a good Estimated Action Rate for that post ID, the higher your costs get & the more unstable your results become. When you use broad targeting and allow the ads to leverage their own audiences & let the machine learning curate the customer journey funnel, we eliminate this legacy liability.
Ultimately, instability and ad fatigue are the result of mismanagement and are 100% avoidable.
Platform Specific Relative KPIs
When trying to measure Facebook advertising, the biggest mistake most people make is misvaluing attribution. We have to remember that attribution at best is relative because no customer journey exists in isolation. Most customer journeys are months or decades long. It’s completely unrealistic to expect any customer to buy off of the first impression of any ad for any product and most brands have multiple marketing channels.
When trying to optimize and ultimately scale our Facebook ad accounts, we have to understand that we need relative KPIs that are specific for each platform. These KPIs are determined, not only by that platform’s efficiency, but also by where it sits in the customer journey and funnel, and the impact of the channel across the media mix model.
The target CPA for Facebook should never be the target CPA for a blended view of a brand. The blended CPA for any brand will always be less than the Facebook CPA. This is because we have email and search, organic traffic and returning customers, and a dynamic marketplace of competitors and real-world conversations.
When you’re trying to scale a brand, Facebook’s target CPA needs to be weighted with respect to the overall incremental lift that it brings to more profitable channels like search and email. Using audiences like lookalikes and retargeting options will considerably increase the overlap of sales attributed to Facebook that also gets attributed to other channels. This means that the allowable Facebook CPA must be much lower than could be if we targeted only Broad.
Remember, that when we target Broad, we have the greatest lift to organic and search and email, which means that we are most effectively amplifying the volume of transactions from our considerably higher profit margin marketing channels.
Facebook ROAS versus Brand growth
The return on the ad spend that we can attribute to Facebook, or any marketing channel must be viewed through the lens of what touch points that channel had in the journey. We have to also accept that no channel exists by itself, so the credit for every single transaction should be given to multiple channels.
Rather than trying to solve the unsolvable problem of how much credit every channel gets in order to scale our business, we need to stop trying to appease the ego of the marketer by measuring return on ad spend as a key performance indicator.
The way to scale a business is to ultimately acquire future cash flow at a profit, by prioritizing the acquisition of profitable customer journeys. When we acquire customers, even at breakeven or less, who will on average purchase more than once, we access future revenue. If this future revenue comes in at a profit over operating costs, then, as that future revenue grows, we can invest more in the amplification of the acquisition of these profitable customer journeys.
Simply put: improve the revenue floor to scale ad spend
It’s that simple, everything else is a liability!
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