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If you've been advertising on Facebook for more than 3 months, you may have noticed a pretty significant drop in performance around the end of August. While performance drops are expected every now and then and ad competition does rise during Q4, this performance drop has been like no other.
Here are some words just from a few experienced Facebook advertisers on Reddit:
- 17 hours into the day, not a single sale :) Absolutely unprecedented. Going to try TikTok today. (Author: pinkcuppa)
- It’s madness isn’t it, we’ve done every kind of campaign possible, literally nothing working atm (Author: Full-Ad5766)
- The worst performance I’ve seen in a while. Overall everything is down. ATC, IC, Purchase. Right as our season begins, we’re hit with these issues. We are looking to steer away from FB ads due to this. (Author: EverydayMustBeFriday)
Why Has Performance Dropped?
Some People claim a bug in the system, others claim the performance issues are caused by a new update to Facebooks advertising algorithms.
While its very likely a combination of causes, its evident that the tightening of privacy regulations across the world is one of the leading factors. There are over 1.46 billion iPhone users across the world. So its not controversial to say that Apple's introduction of the App Tracking Transparency (ATT) feature in iOS, which allows users to control whether they want to be tracked by advertisers, has had a significant impact on the advertising ecosystem.
What Do These Privacy Updates Mean Exactly?
Decreased Targeting Precision: With the adoption of ATT, it's now harder for advertisers to target users with personalized ads. This impacts the effectiveness of ad campaigns and decreases their performance.
Less Data for Facebook: More privacy for the individual is great. However, if only a small percentage of individuals opt in for data collection, there is a smaller group of people whom Facebook knows will buy what products. Simple supply and demand, as the supply of of users who can be targeted accurately decreases, the cost of each set of eyeballs increases. This means that advertisers with tighter margins will be pushed out to other platforms while larger margin business will be able to withstand the rise in CPA. This could be why we are beginning to see a push in e-commerce towards selling higher ticket items.
What's The Solution?
We may not see the effectiveness of Facebook advertising return for a little while. However as a fair number of advertisers are priced out of the ad market, competition will fall and with it CPA's - could be a small or large improvement. Our current strategy at Gallus Growth is to continue using Facebook ads but at a lower spend for businesses with tighter margins - at least until we see some stable improvement to current average CPA's.
Struggling with getting ad costs down? Check out some of our other articles that will help you increase your brands exposure through SEO, organic marketing channels, and other forms of marketing.
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