My fellow digital marketers – before we talk about Facebook performance metrics, please complete this short survey.
Question: Why do you create new Facebook ads?
- Out of pure habit.
- Our creative team never has enough work to do.
- Because ABT – “Always Be Testing” – amiright?
- It’s in the contract! We promised our client X new ad creatives per month!
- We let our performance data be our guide.
- None of the Above
- All of the Above
If you selected “F” above, then congratulations! You’re a super-evolved digital marketer! Or…you’re just pretty good at kidding yourself. In reality, most of us are probably doing some combination of these different scenarios.
And for good reason. Today’s digital agencies face the same age-old issue as the traditional Mad-Men agencies of yore: their media and creative teams are siloed.
Too often, the media team will lob a request for “better” creative over to their design team without communicating why previous ads are (or are not) performing well. The creative team spends countless hours generating fresh new creative only to see that 99% of the time, the Facebook algorithm prefers the old, stale creative that was running before. But without an understanding of the performance, the feedback loop is never closed, and the creative team remains in the dark.
Bridging the Media-Creative Divide with Data
It’s time to bridge the divide between the media and creative teams, my friends. And – you guessed it – the material we’re building our bridge with is pure, raw, glorious data. It’s time for the media team to take the lead in the creative design process. Don’t worry – this doesn’t mean brushing up on Photoshop. This means leveling up your Facebook analytics skills!
Across the board, digital channels like Facebook are taking more and more optimization controls away from us advertisers. This means the creative design is becoming more important than ever before. Indeed, it may soon be one of the only optimization levers we have left as digital marketers.
Three Key Facebook Metrics for Understanding Ad Performance
Here’s the good news: Facebook’s reporting metrics are now more sophisticated and insightful than ever. To name a few, here are three key Facebook metrics that will help you understand your ad’s performance. Collectively, they are known as Ad Relevance Diagnostics.
- Quality Ranking – Facebook wants its users to have a high-quality experience across their platform so they’ll return again and again and hang out for a while when they’re on Facebook. This goes for ads, too. Quality Ranking is Facebook’s measure of the perceived quality of your ad compared to other ads serving the same audience. In other words, if your ads aren’t giving Facebook users a high-quality experience, your ad impressions will fall (or may never gain volume in the first place).
- Engagement Rate Ranking – Essentially, Engagement Rate Ranking is how much engagement Facebook expects your ad to get, including clicks, reactions, comments, and shares. If Facebook believes your ad will get lower engagement compared to ads competing for your same audience, then they’ll be less inclined to serve your ad, resulting in fewer impressions and results.
- Conversion Rate Ranking – The Conversion Rate Ranking is a prediction of how likely someone is to complete your desired conversion goal after clicking on your ad compared to other ads competing for the same audience. If your landing page is slow, irrelevant or otherwise poor, and your historical conversion rate is very low, then you will likely see a lower Conversion Rate Ranking. Facebook perceives a conversion as a sign that your customer has had a positive and useful experience after clicking on your ad. Therefore, Facebook will reward advertisers that achieve a high Conversion Rate Ranking by preferring and serving their ad more often.
In Facebook Ads Manager, you can pull all three of these metrics right into your performance dashboard at the ad level.
Source: Facebook Ads Manager
So, What’s Next?
If you want to learn how to put insights from these and other metrics into action, join me on Day 2 of Hero Conf. 2022. I’ll be presenting my session: Why Your Shiny New Facebook Creative Isn’t Performing and How to Fix It.
I’ll show you how we go beyond the surface-level Facebook reports here at Effective Spend. You’ll learn how to analyze key Facebook performance metrics and how to translate your analysis into effective creative optimization. Here’s an overview of what we’ll cover:
- Perform platform and placement analysis to identify creative performance gaps
- Pull the right creative levers to boost key metrics like CTR, CPM, and CVR
- Combat ad fatigue, increase ad relevance, and engagement
- Translate your data analysis into a sound creative optimization strategy
With better creative analysis, direction, and testing methodology you can increase the ROI of your designer’s time, with a more predictable creative design process that has a higher success rate.
Hope to see you in Austin on February 1st!
Ad Fraud Warnings to Look Out for in 2022
Advertisers spend $455 billion in online advertising per year and $42 billion of it lost due to ad fraud in 2019, according to Juniper Research. In addition, the Wall Street Journal reported that 28% of all web traffic likely comes from “non-human” bots.
Why hasn’t ad fraud been stopped yet?
In short, it’s still difficult to detect.
Fraudsters are using far more sophisticated techniques today than in the earlier days of the web and a single advertiser can run millions of ad impressions across hundreds of websites, making it extremely difficult to spot irregularities at such a large scale.
It’s not a secret that ad fraud remains a major problem. But are advertisers aware of it and, if so, are they doing anything about it?
Fraud Blocker, a click fraud protection software, sent out a survey to PPC marketers to help answer some of these questions as they plan for their 2022 campaigns.
What is ad fraud?
Ad fraud is a means to defraud advertisers by using techniques that inflate the total number of ad clicks or views for financial gain.
With click fraud, malicious actors can employ robots or low-wage workers to repeatedly click on ads illegally. Unaware of the fraud, advertisers then pay for the clicks as if they were real humans with actual buyer intent.
Another type of ad fraud, impression fraud, is often done by serving ads in places that are invisible to the human eye. This can be done by stacking ads on top of one another, loading them in tiny iframes, or serving them in the background of a mobile application.
Here are a few of the most common types of ad fraud today:
- Ad Stacking: Multiple ads are stacked on top of one another where only the top ad is visible, however advertisers are charged for the non-viewable ads.
- Pixel Stuffing: A malicious publisher loads ads, or an entire website, inside a 1×1 pixel. The ads are non-visible to the human eye.
- Click Farms: Attackers hire a group of individuals whose job it is simply to click on ads throughout the day. Click farms use techniques that give the impression that each click is from a different user and device.
- Click Bots: One of the most popular methods of click fraud is done by web robots. These bots can be simple programs that click on ads repeatedly or they can be large operations that are installed with malware on user’s devices and click on ads unknowingly in the background.
- Location Fraud: The geographic location of ads are spoofed using a Virtual Private Network (VPN). This makes ads appear to be shown in a more desirable location, such as in the US, despite actually being shown in a less desirable country.
- Video Viewing Fraud: The popularity of video channels can be easily faked to appear more appealing to advertisers, much like social media followers. Advertisers ultimately end up paying based on the view counts which a large portion of may not be from real humans.
- Affiliate Ad Fraud: Fraudsters manipulate the cookies on a user’s device to wrongly credit an associated affiliate as the source of purchase without the user’s knowledge.
- Source Spoofing: The data detailing where an advertisement ran is altered to appear as a more trustworthy publisher or mobile app.
- Domain Spoofing: The domain name is changed to falsely appear as if the ad came from a more premium site, such as changing from junknewssite.com to WSJ.com.
Visit here for more details on the different types of ad fraud.
Ad fraud still remains a large concern for advertisers
In the new survey, PPC managers were asked about their awareness of ad fraud, their overall level of concern and, what role in marketing they held to see if there was any correlation.
The vast majority of all respondents, 70%, stated they were somewhat or very concerned about ad fraud.
The survey also showed that more experienced marketers had a larger concern about fraud. These particular respondents may be able to identify fraud more frequently due to their dedicated marketing and analytics experience relative to more general business owners and consultants.
Ad fraud continues to significantly impact campaign performance
All respondents to the survey had direct experience managing PPC ad campaigns and most of them reported seeing a large amount of fraud.
74% of those respondents experienced more than five percent of fraud in their ad campaigns and an incredible 11% of marketers experienced greater than 25% of fraud. Even a small amount of fraud can have a tremendous impact on an advertiser’s budget and performance.
The types of ad fraud, and their marketing channels, still vary wildly
Historically, click bots were often the most commonly mentioned type of fraud, but today the survey shows “ad stacking” and fraudulent URL sources as the most common problems for PPC managers.
Click bots and “pixel stuffing” were the third and fourth most commonly mentioned and over 10% stated that competitors clicking their ads was a major problem for them.
The respondents also experienced fraud across every channel in nearly the same amount. Even newer technologies, such as over-the-top streaming TV (OTT), reported sizable issues of ad fraud. This could be due to it having less mature ad tech that creates a greater potential for exploits.
Experienced marketers use third-party software to help prevent fraud
Eliminating ad fraud entirely can be very difficult, but advertisers can rely on a few techniques to help save their budgets and improve their performance.
The first is to simply follow best practices to help identify bots, such as adding a “honey pot” to lead forms, or by frequently monitoring data from clicks, views, and leads to find irregularities and then adjusting advertising campaigns accordingly. However, these require experienced marketers to be able to identify the bad data and it can be labor-intensive to frequently monitor and take action.
Another option is to rely on anti-fraud services provided by ad networks, such as Google Ads. This can be effective; however, there is often a conflict of interest the ad networks generate revenue from each click or impression regardless if it’s fraudulent. Reducing their fraud clicks thus reduces their revenue. Some ad networks also provide very little transparency of invalid activity in their reports and then the burden can be up to the advertiser to request reimbursements if fraud is discovered.
Some ad networks, such as Google Ads, provide “invalid clicks” in their campaign reports for advertisers, but one man sued Google after allegedly discovering his invalid clicks were far greater than what the Google reports were showing.
When the survey respondents were asked if they believed Google Ads blocked click fraud, only half of the respondents, 49%, believed Google did. This should be a major consideration for advertising in 2022.
The final option is to use a dedicated, independent ad fraud detection software. There are several players on the market that can help advertisers detect, block fraud in real-time and the survey showed that about 50% of advertisers use these services, or have considered using one.
Overall, the results of this survey indicate the prevalence of fraud in advertising campaigns today is still very high. As marketers plan for 2022 they should consider taking action against this fraud to improve their ad performance and extend their ad budgets.
The Fraud Blocker survey was conducted by Pollfish and concluded on December 1, 2021. It was sent to a randomized group of PPC marketers and media buyers in the US and UK who purchased digital advertising in the prior 24 months. 200 respondents completed the survey. Pollfish is a leading survey company with a pool of over 480 million mobile audience members worldwide that participate in their surveys.
Use Customer Lifetime Value to Find More Clients
With new privacy rules continually changing the landscape of third-party data, brands are increasingly becoming more focused on understanding their current customers in order to make more sophisticated marketing decisions. One approach to this is utilizing customer lifetime value (LTV) to segment your best customers and ultimately find more of them. In this article, we’ll provide a brief outline of LTV but you’ll want to attend Hero Conf 2022 in Austin, Texas for a more in-depth breakdown with key takeaways.
What is customer lifetime value?
The lifetime value of a customer, or customer lifetime value (LTV), represents the total amount of money a customer is expected to spend in your business, or on your products, during their lifetime.
*Note on calculating LTV*
Now to be fair, there are a number of varying ways to calculate LTV going from relatively simple, to complex and complicated. This article will not be focused on evaluating the best approach or even how to calculate LTV. I do have some preferred tools which I’ll share at Hero Conf- but ultimately finding the best tool that works for your brand is important.
Large brands like Amazon and Starbucks have documented how their understanding of LTV has influenced their marketing and overall business decisions. Smaller brands who often have limited resources in their pursuit of growth often overlook LTV or don’t truly appreciate how helpful it can be to their overall growth.
Which campaign is performing better?
Take a look at the chart below – at a glance – which campaign appears to be performing better?
|Campaign A||Campaign B|
|Cost / Acquisition (CPA)||$10.00||$16.67|
Most digital marketers, including myself, would say campaign A. More purchases (revenue), lower CPC, and lower CPA. Seems pretty obvious.
But a question that’s worth asking is – what if campaign B focused on acquiring a better quality customer? Someone who purchased a higher average amount bought more frequently, and stayed, is a customer of the brand for a longer period of time. Ultimately, a customer with a higher LTV. The question of which campaign is performing better looks a lot different when LTV is factored as a metric and could lead to very different marketing approaches.
Looking beyond CPCs & CPAs
These are conversations that more brands should be having. Looking at CPCs, CPAs and the revenue from the first purchase are all very common KPIs, but they can be misleading and myopic. Factoring in LTV provides a more holistic approach to making marketing and overall business decisions.
Going a step further, brands that decide to utilize LTV often come across the hurdle of how to efficiently segment their best from worst customers. In the workshop, I’ll share the most effective analysis that we’ve found. For brands on Shopify, we’ll take it a step further and offer a valuable app that will both help solve LTV and segment your customers as well. There are a number of apps in the Shopify App Store that can help calculate your LTV and effectively segment your customers for you, but there’s one that we’ve found to be leaps and bounds ahead of the rest.
Finally, once you’ve segmented your customers, you now have the ability to supercharge your marketing efforts to find more of your best customers, while also excluding targeting anyone who you believe might be exclusively bargain hunters or cherry pickers.
If you’re interested in scaling your brand, you’ll want to attend this workshop. Understanding LTV and how to find more of your best customers will be an invaluable tool that will help move the needle for your brand in 2022. Key takeaways will be:
- How LTV has shaped the decisions of large brands we all know
- How LTV provides a more holistic picture of success within paid search
- How we’ve helped a women’s apparel and homeware brand find more of their ideal customers
- Tactical insights (including apps/tools) on how to implement an LTV strategy within paid search
Hope to see you there!
Tips for Optimizing a Localized PPC Account
Before jumping into the components of a local PPC account and why it matters, we should first define what constitutes a local PPC account. The basic definition is that it targets customers within a specific region. The strategy for localized PPC specifically involves using local keywords and geotargeting. One would quickly assume that only brick and mortar businesses like a neighborhood pizza shop, dentist’s office, or boutique retailer would run local campaigns, but that isn’t always the case. Even if you have locations around the world, you can serve and sell to potential customers virtually, by using a localized approach.
The Value in Running Localized PPC
As PPC marketers, one of our biggest responsibilities is to optimize campaigns. The term ‘optimize’ may sound like a broad term, but it really represents many tactics. The biggest areas of focus for optimization would likely be to improve the engagement via click-through rate, improve the return on ad spend via sales leads or transactions, and make each dollar in the budget go just a little farther. In national campaigns, it may sometimes be a little bit harder to find pockets of wasted spend, like geographic targets for example, but in local campaigns with a laser focus, inefficiencies are easier to spot and/or avoid. If the budget is tight and you can’t afford to spend money on clicks, you have to optimize toward what works.
How to Optimize for Local PPC
In terms of local PPC, the biggest way to optimize campaigns would be to focus on performance by geographic area. More often than not, when you dig into the data, you’ll find these areas of opportunity. In Google Ads, location reporting provides insights into not
only your targeted locations but also your matched locations (where activity has been attributed to). Reviewing these location reports is a great way to discover new pockets of results-driving zip codes or DMAs, which can be leaned into with a positive bid modifier to increase traffic, or conversely, excluded from your campaign altogether if they are wasting budget by not driving conversions. Additional geographic reporting available in Google Ads includes the distance report, which shows how the distance from a location impacts search ad performance.
Here are a few reasons why optimizing for location is so crucial in PPC:
- Nearly 30% of searches for something in a specific location will result in a purchase (Source: Valve and Meter, via Google).
- In 2020, 93% of Americans used the Web to find local businesses. (Source: BrightLocal)
- Almost one-third of all searches made on mobile phones are location-based (Source: The SEM Post).
Source: Crimson Park Digital
There is so much more to local campaigns than just their location settings, however, a huge factor that contributes to performance is intent, via localized keywords. These are phrases that not only include the words “near me,” “local,” or “nearby,” but also zip codes, town names, and other localized signals that show “near me” intent.
Did you know?
- 82% of smartphone users are actively searching for businesses near them (Source: Search Engine Land)
- 76% of people who search for something nearby on a smartphone will visit a business within one day (Source: Google)
- Almost 70% of searchers on mobile will call a business using a link from the search (Source: PowerTraffick, via Google).
Localized searches are not just siloed to mobile, even with such strong mobile statistics, it really depends on the industry, offerings, business, and how that type of customer behaves by device. Is your business in higher demand when customers are already on the go? Or are your services something that needs extensive research ahead of time, before leaving home? These are questions to ask before dialing up the mobile bid adjustments. 59% of consumers still prefer to search for local information on a desktop versus other smart devices.
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