eCommerce Lifestyle
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What’s Going On With Facebook?

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If you advertise your business on Facebook you’ve likely seen your costs skyrocket over the past few months.  Anton explains why in today’s episode of the eCommerce Lifestyle Podcast.

The podcast is also available on all major podcast players including, Stitcher and Spotify.

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Transcript

So, if you use Facebook ads to promote your online business, you've most likely seen over the past few months, your costs increasing and the amount of tracking and optimization in your account going down. What I want to do in this episode is explain exactly why that is. And by the way, I'm a huge Mac fan, but this is all thanks to Tim Apple. And if we go back now over a year ago, when Apple announced that they were going to be releasing iOS 14, that's the operating system for iPhones, one of the things they mentioned was privacy. Now, consumers love this. Advertisers hate it.

Basically what they said is that when iOS 14 comes out, different apps that are on the App Store that people are using on their iPhones are going to have to provide this little pop-up message that comes up that says, "Do you want to allow this app to track you," basically to keep your data? And you can say yes, or you can say no. Now this didn't happen right away. This didn't come out a year ago. And when Apple first released iOS 14, they gave everybody a grace period in order to get everything set up the way it needs to be set up. So this eventually kicked in a few months ago from the time I'm recording this video.

And I remember the first time I saw it, my phone updated overnight to iOS 14. I woke up, clicked the little Facebook icon and the message popped up, "Do you want to allow this app to track?" Now, I said, "Yes," because I'm an advertiser and I want that data. I want to see relevant ads, but it turns out, by far, the majority of people clicked, "Do not track," upwards of 90%. I actually believe it's over 95%. And the second this happened, Facebook lost the ability to be able to track what happens off the platform and then have that data come back into Facebook.

Now, this is a massive problem because in the states, iPhones make up over 65% of the cell phone market. And not only that, when you look at historical data, people that use iPhones spend more money than people that don't. Sorry, it is what it is. The data speaks for itself. So as soon as the ability to track 90% plus of iPhone users went out the window, so did that data, so did that accurate ad spend, so did the ability to set your ads and not have to think that much about what's going on, and just let everything optimize on its own. So what I want to do now is share this a little bit deeper and let you know exactly why this is happening.

So let's just say you set up a new Facebook campaign and in that campaign, your objective was to get conversions and those conversions were purchases. So you're telling Facebook, "That is what the goal of this campaign is." And let's just say in that campaign, you had only one ad set. We'll keep it a really simple structure. And you had that ad set targeting, let's say, website visitors from the past 30 days, so it's remarketing. Okay, simple enough, right?

Well, what's going to happen is Facebook is going to take the ads that live in your ad set, and it's going to show them to the people in the audience that you selected when you set up your ad set. Now, what typically happens is Facebook shows the ads. Facebook obviously sees who's clicking, commenting, liking who sharing the ads, but they see when they click it, if they're going into your store, through the Facebook pixel or through the Facebook conversion's API, and they see what's happening on your store with that person, including when they purchase. Reason being because their pixel on your store, or on your website, whatever it is you sell or offer that pixel sends the data back to Facebook. And when that data comes back, let's just say somebody buys something for you for $1,000, well, that information is going to be fed back in to your ad set.

Now, here is where the iPhone thing really started to throw things off. When the data comes back, not only is it showing what ads worked and how much money was made, but Facebook is also tracking which platform and device it's coming from. Now, you could see this by doing a breakdown of your ads inside of Ads Manager. And it'll show you things like whatever placements you have on, for example, Desktop Newsfeed, Mobile Newsfeed, Instagram Stories, Facebook Stories, Marketplace, et cetera, et cetera, et cetera. And then it'll show you whether it's an Android device, whether it's an iPhone, whether it's an iPad, or an Android tablet. It just goes deep into everything, so you see exactly where these conversions are coming from.

Now, that's great for you because you can know what's working, but it's also great for Facebook, because Facebook looks at what you're optimizing for. And again, if you're optimizing for, let's say, conversions and those conversions are purchases, Facebook uses that data to determine where to spend more of your budget. So if Facebook sees that iPhones are bringing you sales, and if the campaign objective is sales, then what Facebook is going to do through their algorithm is invest more of your budget into ads that show on iPhones, so you can get more iPhone traffic, because Facebook knows that's what's most likely to help you reach the goal and the objective of that campaign. Now, as soon as this update happened, and more and more people started to see this message on their phone, when they updated to iOS 14 and more and more people started to click, "Do not track," well, Facebook can still see when iPhone people are clicking and taking any action on your ads on Facebook.

But again, when that sale happens on your store, let's just assume you have a Shopify store, when that sale happens, you're not allowed or they're not allowed. It's just, it doesn't happen anymore. That data does not get fed back into Facebook. And because that data is not fed back, even if you start a new ad campaign, and let's say Facebook spends $100 showing that ad on iPhones, if those people buy, let's say $1,000 of a product from you, well, Facebook is not going to know that. And this is the problem, because if Facebook doesn't know that, and again, you're optimizing for the conversions being purchases, then Facebook thinks, "Okay, iPhones, no good. We spent a hundred bucks, got traffic. Those people didn't buy," because again, they simply don't know. They can't know.

So because of that, what Facebook is going to do is take that budget, whatever your budget is, and it's going to put it towards the other placements, the ones that it can still track that are doing the best. So maybe that is Android now, maybe that is desktop. It really doesn't matter what it is. What matters is that you're losing out on the iPhones or 90% plus of them. And again, when it comes to mobile, that's where people spend the most money. So this is a big problem, especially when you have your ad set up, so you have all placements turned on, and you have everything just grouped into one campaign into one ad set. And you're using specific conversion events where the actual data comes off Facebook, again, if a sale happened on Shopify, for example.

So I just wanted to let everybody know this is what's going on. If you're seeing your costs rise and seeing things be totally out of whack for the past few months. And if you want to check this for yourself to see if this is what is causing you to have issues on Facebook, what you can do is go to your Ad Manager, go to your ads, and then do the breakdown by placement and device. Do it back in Q1 of this year. And then compare that over the past few months and see where your money is being spent. I can almost guarantee you, because this is what we've seen amongst almost all of our accounts, that before iOS kicked in with the tracking, what we saw is a lot of traffic, a lot of sales from iPhones and post update, post people saying, "No don't track me," we saw a lot less spends going to iPhones, really barely any. It's about a sixth of what we're spending on Androids. And because of that, conversions are down as well.

So I do have somewhat of a solution for this. What I'm going to do is share that in a new episode that's coming out Thursday. So if you're not subscribed yet, click the Subscribe button. That episode should be out on Thursday. As always, if you got value from this, and now you at least understand what might be happening in your accounts, go ahead, click the Like button, be sure to subscribe. And if you know anybody that would benefit from this, click the Share button and share it with them. It helps a lot, and hopefully it can help them too. So, thank you everybody. I appreciate you, and I'll talk to you in the next one. See you.

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