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Increase your E-Commerce stores ROAS using first-party data

October 19, 2021   |
   Sariga V

The sign of a cool and effective campaign is when the money earned from new customers should outweigh what was spent on the advertising itself. As a cool and optimistic marketer, we expect the ROAS to grow and lit up when we have 2.14 billion online shoppers. But the ROAS has neither grown nor fallen just stagnant.

ROAS is stagnant. But why?

We have a lot of blogs online saying to improve the ad copies, creatives, create lookalikes, set up retargeting campaigns, etc.

But the issue is the target audience. We could absolutely improve the ad copies and creatives provided we have the right audience to target. Just optimizing the campaigns, testing copies alone does not work when the target audience is not tuned.

Personalization gone wrong – “Am I targeting right?”

Personalisation gone wrong

You drive a top-of-the-funnel campaign to create awareness with great ad copies and creatives in all the digital advertising platforms. After the first level of nurturing and warming up, it becomes the marketer’s responsibility to push and motivate the customer to make any decision like add to cart or purchasing.

To provide that level of push and motivation, the marketers need to have the right target audience so that the messaging reaches the right audience. And that’s personalization, my friend.

But in reality, personalization works like,

Now, if you want to run personalized ad campaigns for the first-time visitors of your website on Facebook to find your Jim, Tim, and Cooper from the vast group of audience. But Facebook’s custom audience match rate gives you a mild cardiac arrest because it won’t match Jim and Cooper due to lower match rates.

 

Facebook Custom Audience Match rate is pathetic

Under usual circumstances, the Facebook custom audience match rate is between 20-30%. And that’s the reason personalization goes wrong and so Facebook shows Tim’s personalized content to Jim. 

Personalisation gone wrong

When dug deeper to find why is it difficult for Facebook to find the right Jim and Tim, one of the reasons was the iOS’14 update where the users have the choice of opting out from being tracked. And also GDPR and CCPA added the flavor of putting privacy and consent first. To know more, check Facebook’s document https://www.facebook.com/business/help/809291819996156.

The bottom line is that we need to have complete control over the data to strategize our marketing ideas. To have complete control over the campaigns then we need to own the data which is First-Party data.

Why First-party data is the future?

Of course, we already have an iOS update and saw the dip in the ROAS and the overall ad performance. And there is Google’s announcement of phasing out third-party cookies from Chrome by 22/23.

Yet, the reason why you need to start collecting first-party data today is that we did an experiment and saw Facebook Custom Audience Matchrate up to 80% using First-Party data.

First party data is the future

So if you need to save your match rate from sinking, then, you need to collect your own data now.

With a higher custom audience match rate, you could re-iterate your marketing strategies for higher ROAS:

Strategy 1: Turn your anonymous visitors into purchasers

Almost 98% of the website visitors are anonymous and the rest of 2% are purchasers.

For instance, there is a user who browsed shirts and pants and left your website. Usually, there will be retargeting ad campaigns for these website visitors. If the audience does not interact with the brand between 7-21 days then it is assumed that these audiences are not interested. But it simply means that the customer’s salary is yet to be credited or waiting for sale season or just not the right time for purchase.

retargeting

But we miss these middle of the funnel high intent audience group.

These visitors can be re-activated and not re-targeted again after 5-6months. People buy jewelry, clothes, accessories very often in the interval of 2-3months. Marketers just need to re-activate and remind the intent of the user to buy. You can check out Google’s article on the “messy middle” of the purchase journey to know the power of the middle of the funnel.

Strategy 2: Bring the first-time purchasers back into the funnel

Amazon is known for its recommendations based on the purchase history and personalization based on the purchaser’s behavior.

A user who buys a red shirt 3 months before has better chances to buy another shirt/t-shirt in the interval of 3-6months. By utilizing the power of personalization, we can re-activate the first-time buyers and can bring them back to the funnel to improve. This in turn helps to improve the overall customer lifetime value. Check this out to improve the LifeTime Value of the customer.

 

Closing note:

After achieving the standard 2% conversions rates. In general, marketers run retargeting campaigns (7-21 days) for the rest 98% of the audience.

The catch here is after retargeting them for a specific period of time (7-21 days). This huge pool of intent audience (98% visitors) is left behind forever, unutilized.

Even if you want to re-activate these users who are stuck in the middle of the funnel, Facebook gives a heart attack with a match rate of less than 30%. Due to this poor audience match rate, you won’t be able to reach the right audience with a personalized message. This impacts the overall efficiency of your ad campaigns and in turn, reduces your ROAS as well.  

Since we have the iOS’14 update already in place and also we got Google’s announcement of phasing out third-party cookies, it is high time we start collecting our own data which is First-Party data.

By properly utilizing the first-party data, you can achieve an optimum custom audience match rate beyond 80%.

With the help of a Customer Data Platform like CustomerLabs, you can effectively create various audience sub-segments to engage and run personalized ad campaigns on Facebook, Google ad platforms.

Now you can say hi to your Jim and Tim.

 
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