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Facebook is just an advertising tool Not your customer data host

January 5, 2022   |
   Raja Rajan

So far, we marketers enjoy using Facebook services that hold our customer data, their behavioral data, etc. Based on the data within our Facebook account, we planned our ad campaigns, marketing funnels, retargeting strategies, etc, and made the desired sales. 

In recent years, due to privacy regulations, Apple iOS’14+ updates, and other factors, Facebook was undergoing a massive change within its ad platform. Now, the transformation is inevitable. 

There is comfort in predictability, but the truth is, without change, often there is no growth.

Like every other industry that stood the test of time, it’s time for modern marketers to adapt to the change and experience more growth than ever before. Its time for us to own our customer data, strategize it and utilize the data on Facebook (i.e, simply use Facebook as an advertising tool and win the advertising game)

Here in this blog, we will be explaining

👉 The History of Facebook Ads

👉 How marketers enjoyed using Facebook advertising

👉 Factors that spurred change in Facebook advertising

👉 What does the future hold for marketers?

👉 How to navigate these challenges and WIN big time

👉 Utilise Facebook as an advertising tool

👉 Real-time First-party data strategies

The History of Facebook Ads

2004: Facebook’s first ad revenue project called Flyers has launched. 

2005: Started offering sponsorship deals to brands like Apple on Group section and generated $100,000 in a few months.

2007: Facebook launched its Ads platform that includes beacon and marketplace. Beacon tracks Facebook users on more than 40 sites even after leaving Facebook.

2011:  Facebook introduced its desktop ad program called Sponsored stories

2012: Facebook launched its mobile ads platform

2013: Facebook purchased Atlas solutions from Microsoft to improve their ad platforms limitations. This purchase helped Facebook show retargeting ads to people who searched for products outside Facebook.

2016: Introduction of bots within Facebook messenger platform

2018 – 2021: Facebook expanded its ad offering into 8-different advertising options (Photo, Video, Stories, Messenger, Carousel, Slideshow, Collection, Playable Content)

So far, How marketers enjoyed using Facebook advertising?

To bring in visitors, who will be interested in making a purchase. Marketers utilise Facebook’s interest targeting feature to deliver ads to the relevant target audience groups. 

These target audience groups would have shown interest in our products on a competitor site. Therefore, the chances of them making a purchase is high. 

Example: You’re trying to sell a pair of sneakers. With Facebook interest targeting, you can target people who have already shown interest in sneakers and can make a sale. 

Retargeting – Embrace the power of Facebook pixel Now! 

Pixel helps track the website visitors, their behavior, engagement with the brand, pages they visited, and even items they added to the carts. These behavioral data help marketers plan their Facebook retargeting campaigns based on their intent.

Once you run ads to people who visited your website before, pixel helps you track their behavior as well. This lets you find what advertisements and audience types were effective in making a sale, helping you focus on targeting a relevant audience for better sales.

How Facebook retargeting works

Factors that spurred change in Facebook advertising

People are increasingly more cautious about their privacy. This led the governments to enforce privacy laws and businesses to adopt a privacy-first design model.

The major causes that are driving changes in the Facebook ad ecosystem and limiting the tracking abilities of the Facebook pixel are 

⚫  GDPR, CCPA, and other privacy laws across the world

⚫  Cookieless browsers – Firefox and Safari have already banned third-party cookies.

⚫  The recent Apple iOS’14+ updates 

Facebook has no more access to iOS user behavioral data

Due to the recent iOS’14 update, the tracking ability of Facebook pixel is limited & Facebook no longer have the access to iOS user behavioral data like they used to have before iOS’14+ updates.

Facebook iOS'14 update opt in form

With lesser access to behavioral data and limitations in pixel tracking, the match rate crumbles and falls less than 25%. This results in shrinking the remarketing audience size substantially (i.e. there are instances you won’t be having enough audience to run remarketing campaigns).

Even if you have enough audience to run remarketing campaigns, the campaign performance at present compared to previous campaign performance before the iOS 14+ update would be very low.

Who Will Be Affected?

Businesses & brands who run Facebook Ads & Facebook business Tools to:

⚫  Target audiences

⚫  Track web conversion events (click, form submission, etc.)

⚫  Advertise mobile apps

⚫  Run remarketing campaigns

⚫  Lookalike creation

⚫  Optimize ads

The real-time impact of these changes on Facebook pixel

After the iOS’14+ update, here are the significant changes which are spoken across marketing communities

⚫  Drop-in campaign performance.

⚫  Match rates reduced below 25%.

⚫  Remarketing audience size pool has reduced beyond 40%.

⚫  ROAS and CAC dropped 1 – 2.5x times.

What does the future hold for marketers?

Today, there are more than 120 countries engaged in some form of international privacy laws for data protection to ensure their citizens are legally protected. With the process, it is clear that privacy laws will regulate data tracking and other forms of behavioral data collection.

Browsers like Safari and Firefox have already gone cookieless. Google follows the same path and plans to phase out third-party cookies in its Chrome browser by around 2022. With Google phasing out cookies completely on chrome browser, the series of issues that happened with iOS’14+ devices are expected to repeat on Google products.

These policies and changes in the near future can severely impact Google ads and other marketing platforms as well.

3rd-party cookie timeline

How to navigate these challenges and WIN big time

It is now clearly evident that Facebook’s ability to track & collect businesses data is severely limited. 

The browsers like chrome going cookieless and with other regulations, things are going to get a lot more worse in the future for Facebook ad campaigns. This will directly impact the campaign performance a lot more than in the present times.

The only way to go for businesses is that they should get more hands-on with their first-party data tracking. This will help set businesses to roll with future changes due to increased data privacy. 

Own your customer data (first-party data)

Instead of depending on Facebook to collect website data. Businesses should collect their first-party data.

First-party data is of two types

⚫  Customer data/ Known visitor data

⚫  Anonymous visitor data

Why you must collect anonymous visitor data?

98% of the audience who visits your website won’t give you any data, i.e name, email address, etc. and this audience group is called anonymous visitors

Even 2-3% of conversions from the anonymous visitor group can up the store’s revenue game by more than 2x times. 

You can use tools like CustomerLabs CDP to seamlessly collect first-party data (both customer data and anonymous visitor data.

First party data - Anonymous and known visitor data

Plan your marketing strategy for the website visitors (first-party data) and segment them.

Based on the funnel strategy devised for the website visitors, you can segment the first-party data into various groups like

Example segments for anonymous visitors

⚫  Cart_abandoned for more than 60days – MOFU

⚫  Product _viewed_more than 2times – MOFU

⚫  Initiated_checkout_not purchased – BOFU

⚫  Added_to_cart_ – BOFU

Example segments for known visitors/ customers

⚫  Customers who bought products on black Friday sales

⚫  Customers who bought Apparel jeans before 6-months.

The above segments are created for both anonymous and known visitors/ customers.

For anonymous visitors, the segments are created to make them enter the funnel and end up purchasing a product.

Example: For a group of anonymous visitors who checked a particular product like blue jeans can be segmented and run ads with a discount to make them purchase the product

While the customer segments are built to make them purchase again and increase the Customer Lifetime value

Example: For a group of customers who bought a pair of candles last Christmas can be segmented and run ads with a discount to make them purchase again in this holiday season.

To do this advanced matching segmentation, you can utilise CustomerLabs CDP audience builder to create various audience segments

Sync your data with Facebook and other ad platforms

After collecting and segmenting the first-party data into various groups. You can sync them with Facebook via Conversions API.

Facebook Conversions API

With the help of a CDP tool like CustomerLabs, you can implement Conversions API for your e-commerce store in less than 60 minutes and start syncing your e-commerce store’s first-party data with Facebook.

Utilise Facebook as an advertising tool

You’ve now collected, segmented, and synced your first-party data with Facebook. Now, you can simply guide and use Facebook as an advertising tool alone and run ads against the first-party audience synced with Facebook. This lets you achieve the desired goal as per the marketing strategy devised.

What else can you do?

👉 For top-of-the-funnel campaigns, you can build a lookalike audience based on the first-party data synced on Facebook.

👉 Educate the Facebook algorithm to show ads similar to the audience (first-party data) who have synced within the platform 

Our customers implemented the above first-party data strategies and here are the results

Increased match rates from 25% to more than 80%

Here’s an experiment, we ran with our own blog visitors (first-party data) to check how match rates work and how to achieve optimum match rates beyond 80%

We created a custom audience segment of the URL blog visitors on the Facebook audience manager and synced it with Facebook.

Facebook pixel match rate

On the other hand, we had our blog visitor data (as first-party data) collected from last November. We figured out a way with our CustomerLabs CDP to pass this segment to Facebook.

CustomerLabs First party data match rate

It is clearly evident in the first experiment (traditional approach), we are able to match only 25% (4700 out of 16k+ visitors). 

On the other hand in the second one, when we synced the same blog visitor data as first-party data (with the help of CDP) to Facebook -> We matched 15000 out of 16k+ visitors which is over 80%.

Here’s the result of one of our e-commerce client’s match rates from the total audience size of 2 Million – Facebook pixel was able to match only 25%, while with CustomerLabs CDP they achieved match rates beyond 80%.

CustomerLabs clients First party data match rate vs Facebook pixel match rate

You may ask What’s the big deal with high match rates?

With low match rates, there is a high chance you won’t be having enough audience to run remarketing campaigns.

While with high match rates, your audience group is qualified for running remarketing campaigns and as shown the performance will exceed the normal standards

Re-activating the mid-funnel audience 

Most marketers’ campaign structure focuses on top and bottom-funnel campaigns In general, marketers run top-of-the-funnel campaigns to bring in visitors and then run retargeting campaigns for the bottom-of-the-funnel (like add to cart, checkout, etc) for the next 7-21 days and push for a sale. 

Here the audience in the mid-funnel like (audience who checked a product category twice and left, audience who checked a specific product, etc) is often ignored.

Practically, due to cookie removal policies, ad platforms remove website data within 90-days and marketers cannot retarget beyond 90-days.

The fact is after 21 days of retargeting, these audiences who’ve shown high intent of purchase will be left forever and the marketing team starts the process from the scratch again which goes for a never-ending loop.

Here’s a successful mid-funnel strategy we devised for one of our customers and segmented their audience accordingly using CustomerLabs CDP

⚫  Cart_abandoned for more than 30days – MOFU

⚫  Product_viewed_not_ added_to_cart – MOFU

⚫  product _viewed_more than 3times – MOFU

⚫  Added_to_cart_not purchased – BOFU

⚫  Added_to_cart_before 30days – BOFU

The segmented audience is then synced with ad platforms and campaigns went live. As CustomerLabs syncs the segmented data every data as an event with Facebook, the retargeting campaigns can be set and run even beyond 180 days. 

By using CustomerLabs CDP, the mid-funnel campaigns are rolled out on Facebook and the results revealed that adopting to first-party data strategy has yielded better results  

⚫ Improved Facebook custom audience match rate from 25% to beyond 80%

⚫ Increased ROAS from 2 to 3.5X 

⚫ Reduced the cost per purchase by 35%.

Conclusion:

Marketers and businesses have been hard-wired naturally to use Facebook as an end-to-end solution to store customer data and to run advertising campaigns.

Yes!!! Old habits die hard. But the change is inevitable. It’s time to use Facebook as an advertising tool alone.

As the world moves in to be privacy-centric, these privacy regulations, the Apple iOS’14 updates have proven to be an eye-opener for businesses to hold control over their first-party data.

Instead of using Facebook to store customer data, By owning the first-party data, you can analyse their behavior, and based on your intent(sale, product visits, etc) you can feed the relevant customer data groupings to Facebook and can simply use Facebook for running ads against them. 

In fact, the above real-life examples have proven that by owning and using first-party data in comparison to pixel data the campaigns are proven to be a lot more cost-effective, highly personalized, improved match rates along with an increase in overall improved campaign performance

Businesses that understand this sooner and plans ahead are the ones who are poised for dominance in their markets.

 
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