How Facebook Prints Money
Performance marketing on social is foundational to Dysrupt. As such, it would be tone-deaf to not speak about the #StopHateForProfit campaign.
Currently, 313 companies are participating in the protest including some of the largest advertisers in the world: Unilever, Verizon, Walgreens, Patagonia, Diageo, etc. (Full list here). It is important to note that as we were finishing our write up Facebook posted an updated response addressing the nine recommendations outlined by the Stop Hate For Profit boycott organizers. It will be interesting to see how the boycotting advertisers respond to the Facebook updates.
If Facebook was a TV network, this type of boycott would work extremely well. Unfortunately for these brands Facebook is not a TV network. Facebook has entirely different economics than a TV network for multiple reasons, but the big two that matter in this discussion are that:
- Facebook has an extremely large advertiser demand coupled with self-serve ad buying that can be effective for anyone
- Facebook's auction has no fixed price for an impression and thus rates are dictated by the market
Because of these facts, this boycott by the top advertisers could mean Facebook makes more money - not less.
Huh?
With 8 million active advertisers and $17.74 Billion in revenue in Q1 2020, Facebook has a healthy business and a high level of demand. Furthermore, Facebook's business is driven almost entirely by a self-serve auction that allows the smallest business to compete and consistently win against the largest, most well funded creative agencies and corporations in the world.
This ability for a small business to compete with a large business is driven by an auction that actively subsidizes great ads and penalizes poor ones. This is a core component to Facebook's algorithm - if you make more relevant and engaging content then Facebook will let you win more impressions with lower bids - or if you make bad content then Facebook will require a higher bid in order to win impressions. It's why we feature a Creative Review each week in our newsletter. For anyone wondering why they aren't hitting daily spend limits, look at your creative & site flow.
And yes while all advertisers are welcome and can compete in the auction, in reality the larger advertisers still have more resources at their disposal. They have access to the best creative and strategic agencies in the world, platform teams dedicated to their business, and likely an internal team that knows every nuance and hack to extract the most value out of the auction. And Facebook's auction allows them to pay less for each impression because of this extra work.
Now what happens when that subsidized top tier advertiser leaves the auction?
Stratechery explains one aspect in a recent article, "The news about large CPG companies boycotting Facebook is, from a financial perspective, simply not a big deal. Unilever’s $11.8 million in U.S. ad spend, to take one example, is replaced with the same automated efficiency that Facebook’s timeline ensures you never run out of content. Moreover, while Facebook loses some top-line revenue — in an auction-based system, less demand corresponds to lower prices — the companies that are the most likely to take advantage of those lower prices are those that would not exist without Facebook, like the direct-to-consumer companies trying to steal customers from massive conglomerates like Unilever."
This goes to our first point -- Facebook has relatively unlimited advertiser demand.
Unilever pulling ad spend has no impact on Facebook as the impression share would simply be gobbled up by the next advertiser in-line. There is no upfront or roadblock so Facebook isn't scrambling to fill the inventory space. Essentially all impressions are bid/won dynamically in fractions of a second, every second, of every day.
*And now the bold statement and irony that #StopHateForProfit could actually make Facebook more money.
As we noted above, the impressions won by a top tier advertiser like Unilever mean they are likely paying less than the second-place finisher. The logic goes as follows.
- Unilever drops out of the auction
- There are 8MM other advertisers available to potentially purchase ads in the auction that Unilever was previously beating with stronger creative/tactics and thus having to bid less
- What would have been the second-place finisher in the ad auction will now instead win that impression. They were second because their ads were of lower quality/relevance to the user.
- This new winner will thus pay slightly more for that impression than Unilever would have (all else being equal)
Facebook only loses revenue when people stop using the platform. Fewer impressions to sell means less revenue for Facebook. Though we doubt that's going to happen as Facebook saw a 10% increase in MAU due to COVID. Our bet is that Facebook's next quarterly will once again show record revenue.
--
* Article originally written on July 7th for Issue 30 of Weekly Dysrupt
Thanks to Mirza Babic for sharing their work on Unsplash.
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Creating a landing page that drives high conversions is essential for effective advertising campaigns. The key to a successful landing page is a clear and compelling call-to-action (CTA) that guides visitors toward a single goal. By focusing on this primary objective, businesses can increase their leads and improve overall campaign performance.
Effective landing pages often utilize well-designed templates, clean layouts, and concise messaging. These elements help maintain visitor attention and reduce the likelihood of them leaving the page. Additionally, personalizing the content to resonate with the target audience can significantly enhance engagement.
Conversion rates can be improved by incorporating elements such as testimonials, relevant images, and strategic use of whitespace. These elements build trust and highlight the value proposition of the offer, making the visitor more likely to take action. Utilizing best practices and continuously optimizing the landing page will ensure it remains effective over time.
Essentials of Effective Landing Pages
Creating an effective landing page involves focusing on design and layout, as well as crafting compelling content. These elements work together to capture visitor attention and drive conversions.
Design and Layout Considerations
A clean and organized design is crucial. An effective landing page for ads should have a simple structure that guides the visitor's eye to the CTA. Avoid clutter. Remove extra navigation to keep the visitor focused on the main action you want them to take.
Visual elements like high-quality images or videos can capture attention. Use colors that align with your brand but also create contrast to make the CTA stand out. Consistent font styles and sizes help maintain readability, while white space enhances content focus.
Content Is King: Crafting Compelling Copy
The headline should quickly communicate the main benefit or message of the page. It needs to be clear and persuasive. Compelling copy is crucial. Use a value proposition to explain what the visitor gains by completing the desired action.
- Bullet points* can break down benefits or features in an easy-to-read format. Avoid long paragraphs – be direct and concise. Testimonials or case studies can add credibility and encourage trust. Ensure that all text supports the main goal without overwhelming the reader. Keep it straightforward and focused.
Optimization Strategies for Google Ads
Effective optimization of Google Ads involves enhancing keyword relevance, leveraging analytics, and conducting A/B tests to improve ad performance and user experience. Focusing on these strategies can lead to higher ad efficiency and better return on investment.
Keyword Relevance and Ad Copy
Keywords are the backbone of any Google Ads campaign. Ensuring keyword relevance means that the keywords used in ads must match what potential customers are searching for. This involves extensive keyword research to find terms that align with user intent.
Ad copy plays a crucial role in optimization. The text should be clear and compelling, directly addressing the needs highlighted by the keywords. Including keyword-rich anchor text, such as phrases that link directly to landing page best practices, can improve ad quality scores and relevance.
Here are some tips:
- Use exact match keywords for highly relevant searches.
- Write ad copy that reflects the keyword intent.
- Highlight unique selling propositions (USPs) to stand out.
Utilizing Analytics for Improvement
Analytics is essential for measuring and improving the performance of Google Ads. Google offers tools like Google Analytics and Google Ads reports that provide insights into user behavior. Key metrics like click-through rate (CTR), conversion rate, and bounce rate help in understanding how well ads are performing.
By analyzing this data, advertisers can make informed decisions about where to allocate budget and which landing pages need improvement. For instance, a high bounce rate might indicate that a landing page does not match user expectations. Optimization efforts should focus on making the landing page closely match the promises made in the ad, which can be guided by Google’s guidelines.
A/B Testing for Performance Tweaks
A/B testing is a method where two versions of an ad or landing page are compared to see which performs better. This involves changing variables like headlines, images, and calls-to-action to see what resonates the most with users.
Running A/B tests can lead to significant insights. For example, one version of an ad might have a higher CTR because of a more compelling headline. Tools like Google Optimize can be used for this purpose. When tweaking landing pages, it's important to implement changes like strategic CTA placements and messaging.
By systematically testing different aspects of an ad campaign, advertisers can fine-tune their strategies to maximize performance and conversion rates.
Conversion Rate Optimization
Conversion Rate Optimization (CRO) focuses on improving the number of visitors who take the desired action on your landing page. This can be achieved through effective CTA elements and trust signals like testimonials.
Call-to-Action Elements
The call-to-action elements are crucial for encouraging visitors to act. These elements should be clear, concise, and placed prominently.
Use action-oriented language like "Sign Up Now" or "Get Started Today." The button or link for the CTA should stand out with contrasting colors to grab attention. It's essential to perform A/B testing to see which CTA versions drive higher conversions. Split testing different offers or placements can significantly improve landing page performance.
Trust Signals and Testimonials
Trust signals and testimonials help build credibility and reassure visitors about your service or product.
Displaying testimonials from satisfied customers can increase the conversion rate by proving that others have benefited from your offering. Trust badges, like security seals or endorsements, add a layer of trust. Positive reviews and ratings should be easy to find on the page, boosting visitor confidence and leading to more conversions. Aim to include images of real people with their testimonials for added authenticity.
Building a Perfect Landing Page for Advertising
Meta’s Advantage+ Shopping Campaigns (ASC) are transforming how advertisers run their marketing efforts on Facebook. These campaigns automate up to 150 creative combinations at once, helping advertisers save time while optimizing ad performance. By leveraging machine learning, ASC identifies the best audiences, driving more efficient and effective results.
ASC campaigns focus on smarter and faster ad conversions. Unlike manual setups, Advantage+ campaigns have preset settings that streamline the creation process. This results in higher performance and less time spent on configuration, making it ideal for businesses looking to maximize their advertising efforts with minimum hassle.
For those interested in taking advantage of this automated solution, Meta’s Advantage+ simplifies the setup and management of ad campaigns. By using advanced algorithms, it ensures that campaigns reach the right audience, improving the cost per acquisition and overall return on investment.
Understanding Advantage+ Shopping Campaigns
Advantage+ Shopping Campaigns streamline the ad creation process by using automated systems to target the best audiences. This method improves efficiency and reduces the need for manual adjustments.
The Role of Meta’s ASC in Digital Marketing
Meta’s Advantage+ Shopping Campaigns play a crucial role in digital marketing. These campaigns use machine learning to identify and reach the most relevant audiences. This automated process helps businesses save time and resources while improving ad performance.
Instead of manually selecting audiences, the system dynamically adjusts settings to optimize results. Advertisers only need to choose a country, and the platform handles audience targeting. This leads to higher efficiency and potentially better return on ad spend (ROAS).
Components of ASC Campaigns
Components of ASC campaigns include automated targeting, dynamic creative testing, and centralized budget management. Automated targeting eliminates the need for manual audience adjustments, allowing the system to find the best placements.
Dynamic creative testing is another key feature, enabling advertisers to upload various creative assets such as static images and videos. The system then rapidly tests these assets to determine the best-performing ones. This approach saves time and optimizes ad delivery.
Budget management in ASC campaigns is more flexible. Unlike traditional campaigns, where budgets are set manually, the ASC system adjusts spending based on performance. This ensures that the best-performing ads receive the most budget, maximizing efficiency and effectiveness. These features make ASC campaigns a valuable tool for digital marketers seeking to optimize their advertising strategies.
Launching an ASC Campaign
Creating and launching Meta Advantage+ Shopping Campaigns involves setting up ads and targeting the right audience to optimize performance.
Creating Your ASC Ads
To start, navigate to Ads Manager and select Create. Choose Sales as your campaign objective. Then, opt for the Advantage+ shopping campaign.
Click Continue. Many settings are preset for ASC campaigns. You can review these by selecting See all preset settings.
Meta's ASC uses machine learning to create up to 150 ad combinations. This helps in finding the best-performing ads. Customize your ads by uploading product images, writing ad copies, and setting a budget.
Ensure your ads are visually appealing. High-quality images and clear, engaging text result in better performance.
Targeting and Optimization
ASC targets both new and existing customers. To set up targeting, first define your audience's demographics, interests, and behaviors. ASC leverages machine learning for optimizing ad delivery, finding the most likely buyers.
Utilize custom audiences to target people who have interacted with your business before. Lookalike audiences can help reach users similar to your best customers.
Monitor campaign performance regularly. Use the data to refine targeting and improve ad effectiveness. Adjust budgets based on what works best, ensuring optimal performance and better return on investment.
By following these steps, you can effectively launch and optimize your ASC campaigns, reaching the most relevant audience efficiently.
Measuring Campaign Success
Measuring the success of Advantage+ Shopping campaigns involves tracking specific performance metrics and analyzing data to ensure your advertising goals are met. This includes monitoring key performance indicators (KPIs) and interpreting data within the Meta Ads Manager.
Key Performance Indicators
To evaluate the effectiveness of ASC campaigns, it is essential to focus on several KPIs. Click-through rate (CTR) measures the proportion of people who clicked on the ad after seeing it. A higher CTR often indicates a more engaging ad.
Conversion rate indicates the number of visitors who completed a desired action, such as making a purchase. This helps assess how well the ad translates interest into actions.
Return on ad spend (ROAS) calculates the revenue generated for every dollar spent on the campaign. A higher ROAS means better efficiency in ad spending.
Cost per acquisition (CPA) measures the cost to acquire one customer. Keeping a low CPA while maintaining or improving conversion rates indicates a cost-effective campaign.
Analyzing ASC Data
Analyzing data from ASC campaigns requires understanding patterns and making informed decisions based on them. Segmentation of data by audience demographics or behaviors helps identify which groups are responding best to ads.
A/B testing different ad elements, such as headlines or images, helps find the most effective combination for attracting customers.
Visualizing trends with tools like graphs or charts in Meta Ads Manager allows easy comparison over time. This aids in identifying periods of better performance and understanding possible reasons behind them.
Using these methods, advertisers can continually optimize their campaigns by adjusting their strategies based on the insights gained from data analysis. For more details on ASC performance, refer to the insights available on Meta’s Advantage+ performance.
