It is a matter of common sense for years that Facebook tags groups of people from within an audience for various objectives. What this means is if you run an ad for “cooking” interest that may have 100 million people in the audience, and your campaign objective is engagement, Facebook will only show your ads to users tagged as engagers from within the 100 million audience size.
Similarly, if you run a conversion ad on the same interest of “cooking”, Facebook will show your ad to “purchasers” from within the 100 million audience.
But there’s more to the story.
A friend of mine asked me whether he should select campaign objectives that are cheaper in nature for really warm audience. For example, he wondered if “reach” or “engagement” ads should be run for custom audiences of people who have added the products to cart or initiated check out etc.
I told him that this probably won’t yield better results than the conversion objective since Facebook doesn’t just work by tagging users but takes many other data points in consideration. So I ran a test. And here are the results
- Both the audiences are 100% identical. RT Reach has campaign objective of Reach. RT has campaign objective of Conversion.
- The CPM of reach objective is 1/10th. It was 10 times cheaper to run the reach ads on my warm audience.
- Despite the warm audience, CTR was 1/3rd for reach ads.
- Despite lower CTR, more clicks were generated for reach ads. (10 times more impressions and 1/3rd CTR = 3 times more clicks)
- Despite more clicks and cheaper CPC (0.11 for reach & 0.28 for conversion), cost per ATC, cost per IC, cost per Purchase was much higher for reach ads.
- Cost per purchase for reach ads was nearly 2.5x of cost per purchase of conversion ads.
- Reach ads saw ROAS of 0.76 while conversion ads saw ROAS of 2.22
While Facebook could be taking thousands of data points in consideration, I want to highlight the basis of why the reach ads underperformed.
Campaign objective doesn’t just tag users, but also decides whether your ads will appear early in the newsfeed or down below capturing higher attention vs lower attention of the same warm users.
It may also take into account the time of the day for when each individual purchaser makes a purchase. By running reach as campaign objective you’re reaching your “purchasers” at a time when they won’t initiate a purchase.
The conversion objective could take individual placements and platforms in account for each individual user etc.
In summary, the campaign objectives do not just work by “tagging” various groups within the audience but also take into consideration many other data points.