Facebook advertisers have faced a seemingly never-ending set of challenges recently from the impact that iOS14.5 has had on targeting and tracking to tackling reporting bias.
But will Google’s planned removal of third-party cookies add yet another roadblock to the list for Paid Social advertisers to consider?
Read on as we explore:
- Facebook’s role in digital marketing
- How Facebook tracks conversions
- 3 Facebook advertising challenges
- Facebook in the cookieless future
- The importance of blended ROAS in a cookieless world
What is Facebook’s role in digital marketing?
From a standing start in 2004, Facebook has grown to be not just one of the most successful social networks on the planet but also one of the key players in the paid social advertising market.
As one of the third most visited websites globally, it has become a magnet for digital advertisers showing stellar levels of growth alongside the other two big market players Google, and the newer entrant Amazon.
Facebook advertising, and Paid Social in general, has become an essential part of many advertiser’s media plans in recent years. Offering a range of advertising options from display to re-targeting style ads in a range of format from image and video to story type content.
However, increasing calls for privacy, changes by other platform providers and the impending death of third-party cookies are all impacting the targeting and tracking capabilities that Facebook ads offer.
How does Facebook track conversions?
Facebook uses pixel-based tracking to target and measure conversion on advertising activity.
For a long time, this has offered marketers fairly powerful marketing capabilities, as they have been able to create personalised campaigns using a host of information gathered from user profiles, including:
However, it hasn’t always been plain sailing with conversion tracking in Facebook reporting.
For example, their process for tracking conversions has long included conversion credit for ads that have been ‘seen’ by a user, rather than those that may have been ‘clicked’ on the way to conversion (which is the accepted convention that other tools like GA use in their conversion tracking).
The issue has led to more and more Facebook advertisers questioning the validity of the conversion reporting that Facebook itself is putting in front of them.
The situation was compounded by Apple’s decision, in its iOS14.5 update, to ask app users to opt-in for ads from providers like Facebook.
With low uptake rates on this, Facebook lost access to a huge swathe of advertising inventory overnight – and crucially it also lost 75% of its reporting window as its attribution window shrunk from 28 days to just 7. And as a direct result, attendant issues for tracking and reporting effectively on conversions and campaign ROI.
The removal of third-party cookies, which much of Paid Social advertising including Facebook ads relies on, is only going to compound the problem.
3 Facebook advertising challenges
There are a number of challenges that Facebook advertisers are facing right now, including:
1. The lingering impact of the iOS 14.5 update from Apple
Prior to the iOS 14.5 update Apple, had been actively tackling privacy issues and had already shown its teeth in terms of moving to protect privacy – by blocking third-party cookies in its Safari browser in 2019.
However, the decision to ask users to move from opt-out to opt-in for advertising purposes has had seismic implications for Facebook advertisers, in particular.
Leaving aside the resulting dramatic upward trend on CPAs for now, which we tackle in the next section, the change also impacted:
- Targeting – depending on which set of stats you look at, the opt-in rate for apps post iOS 14.5 was as low as 5%. Which has meant that Facebook advertisers have lost access to a huge chunk of audience including a significant fall in audiences for re-targeting. And also degradation in the data used for lookalike audiences.
- Reporting – this also had a knock-on effect on reporting with issues like the PCM(Private Click Measurement) Protocol causing a 3-day delay in attribution data. Which has led to less conversions being reported in Facebook as a result.
- Optimisation – a limit of 8 conversion events per website has also impacted the volume of inputs to the algorithm that helps to optimise Facebook campaigns.
According to our own research, 60% of marketers are spending more on Paid Social platforms like Facebook but have seen a decline in the performance of their Facebook ads since iOS14.
2. Vastly increased levels of CPAs on Facebook
One of the other key challenges that advertisers that use Facebook are encountering are sky-rocketing ad costs.
Depending on sector and ad mix this has meant rises of as much as 89% for marketers. And it is a trend that has spilled over onto other channels with TikTok seeing an increase of 92% too.
The reasons for this are complex but include:
- The knock-on effect of the pandemic – where advertisers with offline plays piled into online promotion and e-commerce models
- The continuing impact of iOS 14.5 which had a disproportionate impact on Facebook ads
- The resulting squeeze on ad inventory, and prices
53% of marketers, in our own research, indicated that they are concerned about rising paid media costs. And, more worryingly, only 16% are seeing increased ROI from this heavy increase.
3. Concerns over bias in reporting
Part of the issue with Facebook advertising is that marketers are also heavily dependent on the quality of reporting provided by them.
And, as a platform that takes a walled garden approach to data, it can be challenging for marketers to get a clear view of the impact of their ads.
In fact, an incredible 80% of marketers have indicated that they are concerned about bias in AdTech reporting.
Consider the instance on the right. This is a live example – for a well-known online clothes retailer in the UK – where we didn’t take what Facebook spend data was telling us about attributed revenue on trust. And decided to dig deeper to validate what AdTech reporting was showing us.
In this case, not only were Facebook reporting 68% more revenue than was properly attributed by Corvidae. But an incredible 34% of spend was not optimal and Corvidae was able to identify that re-allocating it would generate an additional £1.6m.
Will the removal of cookies impact Facebook?
The answer to this is whole-heartedly yes.
Facebook has already been struggling to deal with the fallout from iOS14.5 (and subsequent releases like iOS15 that have further impacted tracking capability).
And the removal of third-party cookies is going to blunt the effectiveness of the Facebook tracking pixel in terms of being able to track the type of data that was previously available.
Facebook’s response to the situation has been to ramp up the use of the pixel as a type of first-party cookie within the Facebook ecosystem.
Pushing customers to enable its Conversions API which allows customers to send data about the actions they take directly on Facebook without relying on browser pixel events. Or encouraging marketers to use functionality like look-alike audiences and interest-based ads to target prospects.
Why you need to focus on blended ROAS in a cookieless world
The discussion to date has centred around Facebook advertising and the impact of changes like iOS14.5 and the upcoming removal of third-party cookies.
However, in some ways, it is clouding the real issue for marketing performance – as we move to a cookieless future.
Which is that, to get a true picture of ROAS from your marketing efforts, you need to truly break free of the shackles of pure channel or platform-based reporting.
And, as cookies go away, it is going to be crucial to find an attribution tool that can not only provide a single, unified picture of the effectiveness of your campaigns and strategy as a whole – but can do it in a way that no longer relies on third-party cookies.
That is the approach that Corvidae takes. Using AI and Machine Learning to effectively replace the work of third-party cookies to provide a more accurate attribution view.
And this type of approach can have significant impact in Paid Social.
Take the example of Google’s ‘See/Think/Do/Care’ model below:
Platforms like Google (via GA) and Facebook have advertising analytics infrastructure that are geared towards measurement at the ‘Do’ stage of the model.
This is largely because that is the only place where their solutions are able to measure effectively.
By using AI and Machine Learning techniques, like the ones within Corvidae, it is possible to target users further up the funnel at the ‘See’ phase – where CPAs are much lower. In fact, this is the type of approach that enabled us to reduce CPA by 87.5% for a major European Electronics retailer.
So, how do you set yourself up for success with your Facebook and Paid Social spend in a post-cookie landscape?
Not only does it provide a clearer view of the effectiveness of your marketing activity at a channel, campaign and creative level – it also provides proactive insight into how reallocating spend can impact ROAS and your bottom line.
To learn more about the realities of the cookieless future – and how Corvidae could help – download our eBook below to learn:
- The main reason cookies are flawed
- How to fix your 80% broken data
- Our unique patented technology – and how it completely replaces the cookie