Although most of my writing revolves around sharing my knowledge on ways to help advertisers gain a better understanding of how to create better ads, every once in awhile I like to write about things that advertisers and businesses should be aware of and careful of.
I hear a lot of advertisers that say that the reason their business still exists and thrives is thanks to advertising platforms like Facebook ads. That’s great and all, but it’s important to remember that even if your business’s growth is supported by advertising platforms like Facebook ads, these platforms don’t care whatsoever about their advertisers. They use your success to attract other advertisers like yourself to serve the ultimate goal of making more money. So even if initially your business’s interest and Facebook’s interest point in the same direction that’s great, but remember that their goal is for you to spend more money on their platform, not to make you more profit. I’m pretty sure it’s not news to most readers, but it’s important to repeat, the only thing that platforms like Facebook care about is this:
Every company they purchase, every feature they release, and every statement they make, it all comes down to getting this stock price up so the good and old “righteous” stock owners of Facebook could make more money.
Before we steer off the topic further, let’s focus on the important:
1. Your ad account, personal Facebook account, and FACEBOOK PAGE are subject to being banned from advertising at any time. Regardless I’ve how much you’ve spent and unless you’re a famous large brand like Nike or Coca-Cola or one that has serious influence, you’re currently at risk of being banned from the platform for what is known as “ violating the advertising policy.” Like on any advertising platform or online software you use, when you enroll you agree to their terms of service. In short, the terms are written in a way to ensure that you don’t read them and are written to ensure you have very little to no rights. This means to you that all those followers you worked so hard to gain, and all those creative posts you created could be worthless overnight. It’s not enough that they took away your organic reach and your ability to communicate freely with your followers at no cost, your page is at risk of getting banned. Over the last few years, the number of reported cases online of advertisers who woke up to have their page disabled from advertising and their ad account disabled have been growing at alarming rates. Advertisers are left in the dark and go from years of building their business using paid ads like Facebook ads to getting shut down overnight with no one to talk to. You might be asking why don’t they try to contact customer service to resolve this? Well, here is the best part: customer service doesn’t exist. That’s right, a company that makes 17.5B in revenue from their advertisers in a year doesn’t need to provide them with any customer support, I mean why would they spend that extra money? Advertisers will come back on their knees anyways. The most amusing part is that some advertisers have the option to contact a concierge chat support if they need some assistance, but ad account shutdowns and page disables are the one thing that this chat support doesn’t handle and isn’t able to provide any support for. Crazy, I know. The best part about this is that the actual reason that ad accounts get suspended and pages get restricted from advertising never gets revealed by Facebook. It’s a bigger secret than what happened in Area 51.
2. ROAS is not ROI and is a metric you should be cautious about. I wrote an article that explains the difference and discusses it in depth here. In short, what makes or breaks your campaigns is that holy metric, ROAS. Advertisers make vital marketing decisions based on this metric without understanding its true meaning. The most asked question when it comes to ad performance is what’s the current ROAS performance. By definition, ROAS means the total return on advertising spend, and ROI means the return on investment. Two completely different terms where ROAS is intended to measure revenue driven from ads and ROI is intended to measure profits driven from ads. The fact that some advertisers confuse these terms don’t go unnoticed by advertising platforms, and for them, it’s just great news because if you confuse the terms you are likely to think they are the same and spend more money on their platform. The bigger issue is that advertisers think that if Facebook reports a specific number in the ROAS column,then they think it’s a holy number. They accept it as being true, which is concerning. The way platforms like Facebook calculate and take credit (attribute) for revenue is quite simple and it goes like this. They build an algorithm where the main goal is to provide you the best results possible so you can spend more money on ads. That means that they will also try to find the “easiest” way to get you conversions, even if it means targeting people who are already your customers or people who are in the process of buying. Then, they use an aggressive attribution system that says, anyone who makes a purchase after 28 days of clicking or VIEWING an ad we consider a conversion and will claim that conversion under the return on ad spend. In my modest opinion, return on ad spend should be the pure return of extra revenue that comes as a result of a person seeing an ad for the first time and purchase because of that, thus called return on advertising spend. If the person is a previous customer or someone from your email list, then should Facebook claim it as a return on advertising spend? It doesn’t really sound fair to me. What about a person who discovered your brand through Youtube, and then viewed an ad on Facebook without clicking, should that person really be counted under the return on advertising spend metric? If so, should it be reported on both platforms as a return on advertising spend? Luckily at the upcoming Apple IOS battle will partly take care of this issue and will dramatically limit Facebook’s ability to claim credit for conversions that they didn’t have a meaningful connection and contribution to. At least that will help advertisers a little. The key takeaway here is not to rely on the ROAS metric reported by advertising platforms like Facebook in the way that you evaluate your ad performance and be cautious with the way it influences your marketing spend, as it is designed to do one thing, to make you spend more money on the platform. Remember that ROAS doesn’t take into account associated costs like merchant fees, refunds, chargebacks, fraudulent, or canceled orders. This means that if on average you lose back 20% of the revenue to refunds, chargebacks, and other “hidden” costs, that number should be deducted from the reported ROAS.
3. When you target “prospecting” or “cold” traffic, it might be your existing audience. When I mention this point to advertisers, they get really surprised. You see, Facebook never takes the time to accurately define what they consider as prospecting or retargeting audiences. This means that even when you make a selection to target cold traffic (new users) it doesn’t mean that some returning traffic won’t be included.
What about users who came from other platforms like Google? Or existing customers that haven’t shopped in a while? They will easily find themselves in the “prospective” audience list. In addition, nothing is exclusive here. Targeting prospective could mean for the majority of the audience but not for all. The only way to minimize the targeting of warm or existing traffic is to use aggressive exclusions based on pixel data, customer lists, and blocking as much warm traffic as possible. But guess what, Facebook says it harms performance (I wonder why).
4. Facebook doesn’t reveal how many times a user clicked on an ad or what path led to the conversion. For the masters of tracking users, the company that can follow users across different devices and platforms can’t provide advertisers the basic data of how many clicks a user made before making a purchase or a different conversion? What about the user’s path and the actual steps that users made before the conversion? You want to tell me that they can track and report steps A & Z (click and purchase), but they can’t show you the full picture of each step? Perhaps if they do reveal more information advertisers will realize that in some of these conversions Facebook played a less significant role and shouldn’t take credit for the conversion. For example, revealing more information can show that some conversions happened days after a user has seen the ad without clicking on it, or might show that a user made the purchase after clicking on an ad on a different platform.
5. By using a Facebook pixel you open your business to more competition allowing direct competitors to target your users. Just remember that everything good in life comes with a cost. That same laser targeted delivery that you get for your ads, someone else is paying the price for it. Here is how it works, the idea behind the Facebook pixel is not only to track what happens after a user clicks on a Facebook Ad and lands on your website. If Facebook truly only cared about that, then they would only ask you to place the pixel on the thank you page or a page that would trigger your desired conversion. In reality, they use Facebook pixels to track what people do off Facebook so they can slice that information up and offer it to other advertisers. Just like Facebook puts your ad in front of people that might be interested, they do the same for other advertisers using your pixel and your data. Consider this scenario. Let’s say that I am selling sunglasses online. Out of nowhere, my products are a hit! They are trending on Facebook and I am receiving massive amounts of sales and traffic. Then comes another advertiser who also sells sunglasses online. He tells Facebook that he wants to get purchases and sets up a simple campaign to promote his store. Facebook looks for similar people “in the market” for similar products. How do they know who is in the market? Based on their network of pixels that track every user and literally every website. Quickly, your competitors can start targeting your website visitors and bite a chunk of your potential revenue. So remember, the same way that Facebook helps you find “in-market” users, it helps your competition too.
6. Using interests. behavioral targeting, or even lookalike audiences have not been proven to be more effective than using no targeting at all.
If you are not familiar, interest is Facebook’s way of offering advertisement targeting options to target users based on what they care about or have an interest in. Kind of the same idea as targeting based on keywords, just on a discovery platform. Lookalikes are creating similar audiences and targeting groups based on an audience source (customer list, followers, website visitors etc.)Yes, it will be a shock to many as many advertisers swear that interests work better than anything else and there is a consensus among advertisers that lookalikes are effective. If you read my blogs, then you know that I never blend in the mainstream and being in consensus was never something I was noted for. Let’s stick to the facts. There is no official statistically significant study shown by Facebook or any other credible source showing that interests, lookalikes, or behavior targeting work better than no targeting. You would expect there to be more than 1 for a company that generates 17.5B a year in revenue from advertisers. Even Facebook commonly recommends sticking to broad targeting as much as possible for most optimal results.
Facebook recently added lookalike expansion feature, they push for targeting expansion and recommend targeting worldwide instead of several countries. All these selections cancel out your targeting or lookalikes selection and adjust your targeting to a more broad target to have the largest audience size possible. Selecting these expansion boxes is like not using any targeting at all. The reason interests and lookalikes were offered initially, was to reinforce advertisers’ perception that he has control over who sees his ads and not just give the feeling that it will be shown to random people. They wanted to give advertisers the sense that their ads are targeted from the first impression.
7. Retargeting campaigns are designed to make you spend more money. This might be confusing to some, but retargeting campaigns might cause advertisers to spend more than what they need to get a customer over the fence or in the process of purchasing to convert. In simple terms, most advertising platforms use the last touch model which means that an ad that interacted with a user last before the conversion happened gets the credit. On Facebook, until Apple stepped in with the IOS 14 update, it was based on a view or click interaction which means that even if a user just saw the ad before he actually made the conversion, then the retargeting campaign got the credit. Now, with click through conversions, it takes a little more work to get credit for a conversion, but there is still a question of how many ads you should show a user before he converts. Obviously, when retargeting campaigns are designed to interact with users right before they make a conversion, they are likely to have the best results among all campaigns which will lead more advertisers to spend more money on them. But the takeaway from here is how much is enough. If users tend to purchase after seeing 1-2 ads, then is it really worth aggressively pushing retargeting ads at them and inefficiently spending a lot of money? Not saying retargeting campaigns are a bad idea, just emphasizing how they are designed and that they should be used with caution. In my opinion, the fate of your retargeting campaigns should be dedicated to other internal measurement tools such as overall lift in conversion rate or sales, as if you’re only relying on what Facebook is reporting to you and don’t see that lift in your revenue and profits, it might be worth reevaluating.
8. Your ads can be accessed by many people who work on Facebook. Last but not least, this is something that most advertisers don’t talk about. Remember that Facebook is a business that is run by people. The whole privacy speech that Facebook states that they enforce and care about doesn’t apply to every area.People who work in Facebook’s marketing department (those whose job is to increase advertisers’ monthly spend) have access to a lot of information. They can pull up ad accounts by entering the associated Facebook page and can pretty much pick through most ad accounts that they have interest in. It doesn’t mean that they use that information to harm advertisers or sell it to other advertisers, I am just mentioning that people who work at Facebook have access to your ad account and data. Something that is worth noting.
It’s important to remember that Facebook puts profit over its users and has many tricks up their sleeves to trick you into thinking that your ad campaigns appear to be more successful than they really are. Examples of this are ROAS and ROI. These are both metrics that are strategically programmed to make the platform seem as successful as possible. Retargeting campaigns are similarly designed to trick you into spending more money. Be wary that “prospecting” or “cold traffic” targeting may be taking credit for conversions that were initiated off-platform.
Facebook pixel tracks your audience’s movements and uses that information to make your competitor’s ad campaigns more successful, but purposefully doesn’t reveal the movements to you that resulted in a conversion to cover how insignificant of a role that they really may have played in certain conversions. “Interests” or “behavioral targeting” options have never been proven more effective than no targeting and exist for the sole purpose of tricking the user into thinking that they have more control in their campaign than what they really have.
The simple fact that your ad spend account is expendable is proof in itself that Facebook does not have your business’s best interest in mind. Facebook can ban your account at any time for violating the advertising policy without offering any explanation. Lastly, Facebook employees have total access to your data, which may or may not alarm you.