Get marketing news you'll actually want to read
Marketing Brew informs marketing pros of the latest on brand strategy, social media, and ad tech via our weekday newsletter, virtual events, marketing conferences, and digital guides.
On Wednesday, some news broke that dropped Facebook’s stock roughly 4%. No, it wasn’t another bombshell report from the Wall Street Journal. Nope, it wasn’t because senators grilled the company’s VP of public policy and privacy this week.
It stemmed in part from a blog about its advertising platform, published by Facebook’s VP of product marketing Graham Mudd.
- Mudd wrote that Apple’s recent privacy changes—which allow users to opt out of targeting—have affected Facebook advertisers more than they might have initially expected. Specifically, he said Facebook is “underreporting iOS web conversions” by about 15%.
- “We believe that real world conversions, like sales and app installs, are higher than what is being reported for many advertisers. We are committed to helping you better measure these outcomes and improve your performance,” he wrote, detailing best practices to brave the storm.
None of this is necessarily a surprise. Facebook execs made it clear that Apple’s changes would cause “increased ad targeting headwinds” for the company, specifically in the third quarter.
Still spending
“We’re essentially blind to Facebook’s reporting data. Making optimizations has become very difficult,” Simon Wool, a performance manager at baby food brand Little Spoon, told us. Before these changes, “if we doubled our Facebook budget, you could expect to double your volume of purchases, with only slight cost-per acquisition increases.” Now, if Wool doubles his budget, he said he’s likely to see only a 30% increase in volume, with a much higher cost per acquisition.
Avi Ben-Zvi, VP of paid social at performance marketing agency Tinuiti, said he’d also seen his cost of acquisition on Facebook rise and that revenue attributed to marketing on the platform has fallen (he declined to provide specific figures). But he said he’s been bracing for changes. “They’ve been preparing for this for quite some time,” he told Marketing Brew.
- In fact, of the $3 billion Tinuiti spends across Facebook, Amazon, and Google, Tinuiti is expected to spend 39% more on ad spend with Facebook compared to 2020, partially because it’s more expensive, but also because customer behaviors haven’t changed.
“Those people are still coming to the site, they’re still converting,” said Ben-Zvi. He just can’t see it.—RB