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How e-commerce stores can use first-party data for Facebook retargeting

January 19, 2022   |
   Raja Rajan

Retargeting is one of the key marketing strategies for e-commerce businesses to lure site visitors into the funnel again and make them purchase a product or subscription. 

In fact, some marketers use retargeting to increase their Customer Lifetime Value. In recent years, several challenges for marketers & businesses have emerged which causes a steady decline in Facebook retargeting performance.

In this article, you’ll learn what’s causing the decline of Facebook retargeting campaigns and what can you do to improve your campaign performance.

The challenging tides 

In the last decade, digital marketing depended on tracking pixels and cookies to record a visitor’s browsing behavior.  

Pixels usually track user paths from website to website and aggregate a detailed profile based on various parameters includes age, interest, status, shopping history, etc.

After the GDPR implementation in 2018, cookie tracking without user consent is considered unlawful against the GDPR, striking the first blow on the pixel tracking technology.

With growing concerns over privacy by internet users, browsers like Safari and Firefox have blocked third-party cookie tracking by default. Googles chrome follows the same path to phase out third-party cookie tracking by the end of this year.

Safari and Firefox have blocked third party cookies

The latest Apple iOS’14 update has sent a strong message for businesses to take control of their website data rather than depending on the Facebook pixel data.

Impact of iOS’14 on Facebook retargeting campaigns

After the release of the iOS’14 update, it is mandatory to get user consent for tracking the user activity within the app.

Apple iOS'14  update

The real-time impact on retargeting due to the iOS’14 update

👉 Retargeting audience size reduced beyond 50% as most users have opted out of tracking. 

👉 Match rates reduced below 25%

Who is impacted by these challenges?

The update has swiftly changed the way of how social advertising works. The key impacted areas are

👉 E-commerce businesses that run retargeting ads based on user behavior.

👉 E-commerce businesses/ subscription businesses who like to show ads to visitors who feed on their new blog/ article.

As per Facebook, the chances of retargeting audience size are going to get smaller as more devices upgrade to the iOS 14 update. 

Facebook - Impact on ad marketing

Source: Facebook – Impact on ad marketing

In the near future, chrome is going to ban cookie tracking. This iOS’14 update problems are then going to replicate and evolve in google devices as well.

The way to solve these problems is to take control of your e-commerce website/ store’s first-party data.

How does first-party data help boost your Facebook retargeting campaign performance? 

First-party data is the information you directly collect from your audiences or website visitors

The types

👉 Anonymous visitors

👉 Known visitors or customers

Here’s how first-party data can be defined

Anonymous visitors – 98% of the website visitors won’t provide you any data, i.e., email address, first name, last name, mobile number, etc., and are called anonymous visitors.

Customers/ Known visitors – Website visitors who provide their name, email address directly while making a purchase or by any other way are called Known visitors/ customers.

First-party data: Anonymous and known visitors

Why you must collect anonymous visitor data 

98% of the website visitor are anonymous and are brought in via various marketing activities and the chances of these majority visitors making a purchase are higher.

Even 2-3% sales from these anonymous audiences can improve your revenue game multiple times.  

Consider utilising CDP tools like CustomerLabs to collect both the anonymous and known visitors of your website.

How advanced audience segmentation can help accelerate your personalised retargeting to the next level

Personalisation is the key to winning any marketing strategy. While running retargeting campaigns, you can run personalised ads based on user behavior and their activities.

After collecting the anonymous and known visitor (customer) data. These data can be segmented based on their behaviours and personalised ads can be run based on the segments grouped

Here’s an example of anonymous visitor data segments

The following anonymous visitor segments are created based on their behaviours and these segments help run personalised ad campaigns specifically catered to the segment groups.

⚫ Product viewed more than 3-times

⚫ Cart abandoned for more than 45 days

⚫ Category viewed more than 2-times

⚫ Initiated check out and not purchased

⚫ Added to cart

⚫ Products in the wishlist for more than 60 days

Example: For a group of anonymous visitors who visited a particular product i.e, black jeans/ black shoes can be segmented like – visitors who checked black jeans in the last 60 days

For this segment of visitors who checked black jeans, a marketer can run a 40% discount campaign sale for the particular black jean product and make them purchase it via retargeting campaigns.

Likewise, you create a segment group for known visitors and make repeated sales to them increase the overall customer lifetime value.

Here’s an example segment of known visitors/ customers

⚫ Customers who bought black shoes before 6-months

⚫ Customers who purchased pink jeans before 5-months

⚫ Customers who purchased mobile on cyber Monday sales

⚫ Customers who bought candles last Christmas

⚫ Customers who added products to the cart in the last 60 days

Example: For a group of customers who purchased candles during Christmas can be segmented like – customers who bought candles last Christmas.

For this customer segment who purchased candles last Christmas, a marketer can run personalised ads with offers and discounts on candles and make them purchase again.

To seamlessly segment your first-party data audience, you can use CustomerLabs CDP audience builder to create various audience segments.

Our own experiments and our customer’s campaigns with first-party data and its results

Increased Facebook audience match rates from 25% to more than 80%

We noticed that with Facebook pixel, we are getting less retargeting audience size and low match rates.

So we decided to run an experiment with our blog visitor data to find what gives us better match rates Facebook pixel or First-party data.

In our first experiment using Facebook pixel, we created an audience segment of our blog visitors on Facebook audience manager and synced them on the Facebook platform.

Here are the results, out of 16000 visitors, Facebook can match only 4500+ visitors (i.e, just 25% match rate) 

Facebook pixel Match rate

In our second experiment with first-party data, we created audience segments of our blog visitors using CustomerLabs CDP and synced them with Facebook.

Here are the results, out of 16000 visitors, First-party data with CustomerLabs CDP can match 1500+ visitors (i.e, match rates beyond 80%) 

First-party data - Facebook Match rate

Here’s the result of one of our e-commerce client’s match rates from the total audience size of 2 Million – Facebook pixel can match only 25% of them while with CustomerLabs CDP they got a match rate of 80%.

CustomerLabs client match rate experiment

Activating mid-funnel audience for retargeting campaigns

Now with these high match rates, our e-commerce client has activated his mid-funnel audience for retargeting campaigns

Here are the segments created for the retargeting campaigns

⚫ Added to cart and not purchased

⚫ Added to cart before 60 days

⚫ Product viewed more than 2-times

⚫ Wishlisted for more than 60 days

⚫ Product viewed not added to cart

The segmented audiences are synced with Facebook as an event every day with CustomerLabs CDP. This lets the e-commerce business run ads even beyond 180 days, breaking the cookie barrier.

Based on the segments created, the ads are personalised and the mid-funnel campaigns went live on Facebook.  

Here are the results obtained proving that first-party data strategy outsmarts the usual pixel-based campaigns

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

⚫ Improved ROAS from 2 – 3.5X 

⚫ Reduced the cost per purchase by 35%.

Conclusion

Facebook has around 2.1 billion active users across the world making It a powerful advertising platform for marketers to generate high revenue. With third-party cookies coming to an end, it’s time we use Facebook as just an advertising platform rather than a customer data host. Businesses should start using first-party data rather than third-party data for running Facebook ad campaigns seamlessly. The best thing with first-party data is it is accurate, cheaper, and can run highly personalized campaigns. 

In terms of retargeting campaigns and running funnel-based campaigns – the only solution for businesses is to start owning their data. If you require any assistance in collecting first-party data, feel free to book a time with us, we can help.

 
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