Advertising / Marketing Archives

Variable Sale Pricing & Facebook Ads

One of the readers of the blog was discussing his Facebook ad strategy and mentioned that he has to increase the sale price of the product due to expensive shipping.

This quickly reminded me of my personal experience with variable pricing and Facebook ads and I thought to write a bit about that.

When you start advertising a product on Facebook on a specified price point e.g $19 and have a ton of qualified events stored in your pixel and ad account, a change of pricing can be sometimes disastrous. When you record hundreds of add to carts, check-outs, and purchases at a $19 price point, you’ve trained the Facebook ad algorithm to bring you buyers who are comfortable to spend money in that range. Facebook looks into the historical purchase patterns of the buyers and their average cart value in order to serve your ads to the right audience.

An increase of pricing mid-way in the campaign with a lot of recorded data will have more negative impact as you’re not just going to have lower conversion rate due to the hike in price, but also because your ads will not be served to the right audience further reducing your conversion rate. Due to this reason, personally, I like to start my ads with the final sale price and not something lower.

Will A Robot Replace You?

It was father’s day yesterday. I sat down with my father and spoke for a few hours on various subjects. We briefly discussed a topic that reminded me of something I learnt way back in college. It’s a concept from physics. I was actually quite awful at physics so I apologize in advance if my interpretation is incorrect. But here it goes anyway.

In physics, “work” happens when a force is applied to an object such that it moves from A to B. If you exert the force, but the object doesn’t move, the work done is zero.

In regular life, we don’t think of work the same way. But I think we should. If our actions aren’t bringing about a change or a result, I’d like to think that the work done is zero. It doesn’t matter how hard you try, or how many hours you put in, because as long as you couldn’t move the needle, the work comes down to zero.

I feel that in normal life work should be measured as Force x Displacement and we should move away from our current definition of work as only force. In addition, we should make our best effort in order to have maximum displacement for the force we put in. If employee A works longer hours than employee B, but delivers the same value in the end, it may seem that A worked more, but in my opinion, they worked just as much as they pushed the object just as much. Here’s an interesting case-study.

Savannah Sanchez, a Facebook marketer, did an interesting video that I don’t completely agree with, but I find it interesting to share here today. Her thesis is that Facebook’s AI has gotten so advanced, that a human marketer working over 10 hours a week on an ad account was able to deliver just about the same ROAS that another ad account delivered which wasn’t touched at all during same period and was only optimized by Facebook’s algorithm. If you want to watch the video at the exact time, you can do so here. Or you could watch the full video below

The reason why I shared this here is because when a robot can deliver the same value, your working hours i-e force is worthless. It’s the displacement that counts, and if a robot can do that better than you, you’ll be replaced. Although, I don’t think that time has come yet but I know it isn’t far.

I’ve used Facebook as a marketing tool for about 10 years now, and to think that there’s no more human tweaking possible on Facebook any longer is an alien concept to me. 10 years ago, you could do a thousand tweaks and the system would play along. Now, it’s increasingly harder but I feel expert marketers i-e a small percentage of all marketers could still do better than the system. In a few more years though, I wouldn’t be surprised if that number shrinks to a mere fraction.

Why Are Tech Giants Pushing For Cookie Apocalypse

3rd party cookies are going away, forever. If you don’t understand what it means, browsers will no longer allow any third parties to track you. Safari, Mozilla and Brave already block these 3rd party cookies and Chrome has also given a 2022 deadline. By 2022, 90% of web-traffic will be blocked from getting tracked by 3rd party cookies.

As soon as I wrote that, I realized that it sounds like a great thing for privacy proponents. And it probably is. Big tech giants including Apple, Facebook & Google are rooting for it. However, do you think they are doing that for altruistic reasons? Because they care about privacy of the users? Or do you think they are far more likely to root for something for capitalist reasons? Here’s what’s happening.

Why Giants Love It

Facebook, Google and Apple have insane amount of first party data. They have locked-in users that they can directly track using their own platforms. First party cookies can not and are not going anywhere. So they are counting on the fact that all the small guys will be crushed by the apocalypse, giving these tech giants more control and bigger market share than before.

Not only that, Facebook & Google have already worked a work-around to track all outbound traffic generated from their websites by passing on a parameter (FBCLID & GCLID). So they can continue to track users on many websites as long as the user is referred via their platforms, all without 3rd party cookies.

What Happens to Small Guys

If you’re an independent publisher, I have bad news for you. I know you already feel bad about your business with ad blockers killing you for years, reduced affiliate commissions, and a broken subscription model. Making money as an independent content creator is hard. Unless you embrace the platforms.

If you’re a creator on YouTube, you’re good. You publish and monetize the content within the Google eco-system, there’s no problem for you. If you’re a content creator on Facebook and Instagram, your problems are taken care of too. But if you’re an independent creator outside of these platforms, then hell is ready to break loose on you. Your declining ad-performance is going to get worse. Unless of course, your textual content embraces Facebook instant articles or Google’s AMP. Or you have a successful subscription model.

Cost of Advertising on Facebook & Google

As these platforms prepare to take a larger market-share because of better tracking, ease of finding relevant customers because of tracking, and a better conversion attribution, more and more brands and marketers will endorse advertising on these platforms pushing the CPMs through the roof. 3rd party advertising will prepare for death.

Conclusion

While this seems great for privacy of users, I don’t think it presents any significant improvement. It only blocks tracking for small guys and independent creators. Nothing changes for Google, Facebook or other tech giants.

If you’re an independent creator outside of these platforms, you have less than 2 years to make a transition to serve content & find audience on these platforms. If you don’t intend to do that, you should transition to subscription model. If you plan to continue to monetize with advertising, you should create a lock-in with your users for first-party tracking and sell advertising directly.

The 20% Budget Rule For Facebook Ads

If you’ve previously run Facebook ads, or have watched some of the content to learn to do so, you may know about the 20% rule. If you don’t, here is what it is; many people recommend to bump your budgets by 20% a day in order to scale your ads without ruining or reseting the optimization.

This isn’t broscience as there’s a “last significant edit” column in the ads manager and any bump in budget greater than 50% triggers the last significant edit and resets the optimization. This is even more trouble-some for CBOs which you often really want to scale as they have several ad-sets and audiences that are ready for larger budgets after you’ve proven your original thesis.

Alex from GetNotissed has worked a simple work around for CBO scaling which seems to work in most cases and I’ll explain that in a bit. The 20-50% budget raise without triggering reset is a guideline given directly by Facebook. However, the fact that we associated a time-window with it was how we perceived that guideline. In other words, you can do multiple 20% raises each second to reach your desired budget in a minute instead of doing 20% raise/day.

So you can go from spending $100 per day per CBO to $500 per day per CBO, without triggering a reset, in 1 minute instead of 9 days as long as you do multiple edits of 20% each. Be sure not to directly raise your budget from $100 to $500 which obviously will trigger the reset.

In my personal test, the theory worked great but I’d still not advise making extreme budget raises using the 20% per second rule.

Making Use of Mobile Deep Linking As A Marketer

One of the common problems all marketers face especially on Facebook is that your ads always open within the Facebook’s native in-app browser. While that works OK for many use-cases e.g an e-commerce landing page, it is an awful friction in many other cases.

For example, if you’re trying to send users from Facebook to your Instagram page, despite the fact that both apps are owned by one parent company, the page would still load in the in-app Facebook browser instead of the Instagram app. Which means if someone had to follow you, he would need to login to Instagram within the native browser, which is never going to happen.

To solve this you can simply use what is known as deep linking. We use URL Genius to do this.

Here’s a regular Instagram link to my page.

Here’s a deep-link to my Instagram.

If you are reading this blog in Facebook’s or Twitter’s in-app browser, you’ll see that the deep-link opens my page in the Instagram app which is how I’d really want this to happen.

Similarly, if you’re a Youtuber and trying to promote yourself on Facebook, a regular Youtube link on Facebook will never get you subscribers because of the in-app browser friction. A deep link however will solve this problem.

There could be a million use-cases. I hope you guys find this helpful.

3rd Party Social Proof – $100M Brand Pulling “Little Tricks”

I found a fun little thing that the Native deodorants are using to do increase their conversions. If you don’t know what Native is, it’s an organic deodorant D2C brand that recently was acquired by P&G for $100 million dollars in cash.

The gimmick here is that they are trying to build 3rd party social proof by using a page that is named after a person who apparently is a blogger but has no following. The 3rd party page is being used to advertise their brand with a 3rd person copy which gives it a review/testimonial feel.

Social proofs are big part of social media advertising as they can increase you conversion rate by a lot. Ads that have 1M+ views and 10K+ engagement have significantly lower cost per acquisition due to the social proof alone.

After visiting the page I found out the page has no following

And the ad library is burning fuel week after week

Market Inefficiencies & The Fuel Of The Internet

While you have to pay for most products or services in real life, most products and services that exist on the internet have continued to stay free. Since all internet companies have to make revenue, alternative options are looked into of which a large portion has been advertising.

As advertising became the main fuel of the internet, mega players jumped into the advertising industry to have power and control over the internet’s oil. To power effective advertising, data became even more valuable asset. But the internet advertising had and continue to have many many inefficiencies and over time, all markets try to remove inefficiencies to move towards higher profitability.

A major chunk of the advertising dollar has been going into the pockets of agencies, networks, exchanges, and other layers over layers of middle-men. I look at that as market inefficiency.

With influencer marketing, we saw the markets tried to get more efficient and remove the middle-men altogether. Everyone who explored this area, including us, saw over a 1000% higher ROAS compared to traditional advertising.

A large part of internet continues to stay free because one way or another commerce happens. Advertising is only the means. Facebook and Youtube videos continue to stay free because these companies make money with advertising and data.

However, advertising and data work because commerce happens. Everything else, including the advertising and data are also middle men. They are the inefficiencies that we need today, but hopefully the market will continue to find more efficient ways for higher profitability or cut-throat competition.

All websites and blogs that relied on advertising for years have been increasingly moving towards affiliate commissions to keep their businesses alive. As Amazon cuts affiliate rates, and others might follow, these content websites will need to find smarter ways to make their businesses work. What you could do before by just selling ads can only be done today by selling a product. Today, you can make it work by making a sale happen for someone else and getting an affiliate commission. Tomorrow, that may be seen as a market inefficiency and you may have to generate a sale for yourself either by selling products, or charging for your own product or service.

Youtubers today make up-to 80% of their income not by Youtube ads but by influencer marketing and brand deals. Youtubers and brands are cutting the very platform as the middleman that they host their content on.

We started Socialoholic with content and blogs. We relied on selling advertising in order monetize our network of websites. We drove traffic from the influencers to our content so we can sell ads and pocket the difference. We became content-arbitragers. So many middle-men while the true value was only created because someone somewhere bought something.

Years later, we found ourselves driving the same influencer traffic but instead of driving that to content we drove it to products. We removed the inefficiencies.

Over time, we have pivoted from content to focus on e-commerce as our core area of business because that is the real fuel of the internet. Everything else is only relevant because it assists e-commerce and when something more efficient pops up, it is replaced.

The Future Of Blogs, Publishing & Monetizing Textual Content

The textual content industry where I started from has been under a constant decline. Recent stats suggest that social, gaming and video streaming is taking up to 80% of the internet usage. There’s not much you can do to change consumer behaviors so if you want a larger piece of the pie you should adapt and move more to the video content.

That’s bad news because writing and reading need to continue to exist. There are many people who can best express their views over a blog post instead of a YouTube video or they just prefer to do so.

There are two major reasons why I think textual content is dying.

The first problem that I saw blogs face during my career was the shift of traffic from desktop to mobile resulting in lost estate for advertising. This was a major blow as far as revenues were concerned for most content websites.

The second event that I saw happen was ad blockers which are now used by a large majority of the population making the free publishing unviable. Youtube, Facebook, Instagram and all of video content are safe from this as none of the ad blockers block video ads or pre-rolls/mid-rolls.

Since free publishing is seen unviable today, whenever we visit any mainstream news or content websites we’re presented with content-blockers and payment walls.

The thing is that most people do not prefer reading wall street journal every day and so they don’t see paying $5 or $10 or $20 a month as a viable option to reading that one article that they were really interested in. Instead many people, including me, would much rather pay $5-10 a month and distribute it proportionally between the sites we read the most.

There are two solutions that are in the works.

The first one is Medium. You could move your publication to Medium that can be seen as a platform to host all textual content just as Youtube is a platform to host all video content. Medium will charge users reading medium a monthly subscription fee and proportionally distribute that subscription money to writers of the blogs that subscribers read the most. There are many downsides to this arrangement. You move to a platform so you adhere to their rules. You lose your freedom. They own your content and a ton of other platform risks. I wouldn’t do this unless it’s an existential crisis for my publication.

The second solution is Basic Attention Token & Brave. I will try to explain it as simply as I possibly can but forgive me if I fail to do so.

As a user or a reader you download the Brave browser which blocks 100% of the ads and trackers, auto upgrades HTTPS, saves you bandwidth, improves your browsing experience and allows you to continue to read everything without pay-walls. You have two options here. You can receive small notification ads (like push notifications) that come and disappear and get paid (in BAT) for seeing those ads. Or if you’re not interested in advertising at all, you can buy $5 worth of BATs and auto-contribute them over a period of time to the sites you visit the most via micro crypto-payments.

As a publisher, you don’t have to have pay-walls any longer. You don’t have to move to Medium to get a share of those $5 payments. You can continue to publish at your own platform with your own terms and get a share of the auto contribution from the users in the form of BAT and for the users that decline to pay, you can generate revenue through push notification attention ads.

Watch this video for better understanding of how the BAT/Brave model works.

Facebok’s Infamous Ban Hammer & The Best Case Against AI

Facebook’s robots are great at finding customers. You can create a CBO with 10 ad-sets targeting 10 different things, 5 creatives for each of the ad-sets and the robots will start optimizing on the first day to get you purchases before you’ve even spent $50. That’s great, isn’t it?

When Facebook’s AI gets mad at you though, its quite like Skynet from the Terminator. It tries to erase you and it goes to great lengths to do so. Let me explain that one.

What happens when you use a credit card on Facebook that was issued in your name but by a different country than the one you’re residing in? You’re accused of credit card theft of course. Then you go to great lengths to justify it but it doesn’t work. Then after a few days of efforts, you make it work. But doesn’t matter if you’ve made it work even, cause that’s strike # 1 and AI is going to be tougher with you.

What happens next? One of your ads is rejected for “circumventing Facebook’s advertising policies”. You appeal it, and the ad gets approved. Doesn’t matter though, cause that’s strike #2.

And just like that, before you know it, you lose you business manager. Because you as a person was the cause of trouble, you also lose your personal ad account. In addition you lose your ability to advertise on Facebook or add or remove anyone or anything in any business manager.

If this sounds bad, let me tell you what else happens.

Any pages that you have previously advertised on Facebook get penalized too including the one for this blog that you’re reading. It doesn’t matter if the advertising was done months ago, you still get the hammer. The page gets zero reach syndrome.

Oh Facebook, why does it always have to be this way? Am I always going to feel this way about you?

What Is Ad Blindness & How To Deal With It

As the consumers continue to get forced to see ads on all platforms, they subconsciously or consciously stop seeing them. They learn to spot where the ads are and what the ads are and show no interest in interacting with them.

As early as in my childhood, we would often switch channels as soon as the ads came. In hindsight we couldn’t have seen anything more meaningful in those 5 minutes on a different channel, we just liked avoiding ads.

On Youtube, we’re all hoping to click the skip ad before the button is even there. I have actually spent sometime looking into a way to block YouTube ads or a script that could skip ad before the skip button.

On Facebook, where we spend most of our ad money, the ads that look like ads have constantly been under a decline. Instead the ads that look like native content do not just perform better, but are also rewarded by Facebook by lower advertising costs.

If you advertise on Facebook/Instagram and unable to get results, it’s likely the creatives. The single biggest driver of your results are your creatives and your audiences are showing blindness to the ad-content just as the humans have continued to do ever since the advent of advertising.

If you have not already moved to UGC (user generated content), you immediately should. The reason why the whole world goes bananas about the influencers is because the ads fit in natively. The best part about UGCs is that not only you’re going to make more money with your ads, the creative costs will also go down significantly as you can now shoot your ads with iPhone and a couple of creators.