This Month in Meta Ads

[00:00:01] Well, it is Tuesday and time for our deep dive. This week, our Meta Ads correspondent, Andrew Foxwell, is here. Andrew is a veteran Meta Ads buyer and has visibility into $300 million in Meta Ad spend through his Slack community called Foxwell Founders.

[00:00:15] I feel like so much is changing on Meta's platform over the last year that, you know, with AI especially, that I wonder if we ever need to sort of rethink the fundamentals. I was giving some thought to creative testing, which, you know, is sort of a science and an art onto its own. It's always been a challenge for me on Meta. Where do you stand on this lately?

[00:00:37] You know, I think there's a lot of different ways to do this and everybody has a different way of doing it. You know, we just discussed this in the membership in the Foxwell Founders community and an advertiser that I really respect, Mike Lucas, was really talking about how he does what is really CBO testing with minimum spend testing for creatives.

[00:00:59] So this is something that I don't know if it'll be available in the future since they're switching, you know, us all to ASC. But right now it's essentially how I used to do it. But instead, it's using a campaign budget optimization campaign, which, you know, you set the budget at that campaign level and it spends it across the ad sets.

[00:01:18] And this is a minimum spend. So essentially, you know, you go through and put each different angle within or kind of each concept in its own ad set and then let them run for seven days with really tight exclusions on, you know, purchasers, engagers, email lists and everything. And then you let it run for seven days. So, you know, minimum spend would be whatever you set and would be considered sufficient after a seven day period.

[00:01:49] And, you know, Mike said he likes to do seven to 10 times the average order value spent over a seven to 14 day period. Now, he deals in high spending accounts, which makes sense. But essentially, it's this separation. You let things go for seven days. You turn off underperformers. You increase the CBO budget and then you put in new tests that are competing against the legacy tests with minimum spend.

[00:02:16] So it's kind of interesting. You're letting the campaign mechanism say, hey, look, there's some new things here. And it works because you're overall increasing that campaign budget and thus giving it more room for those other things to come in. I thought the putting sort of competing audience groupings in the same campaign was a bad idea. Yeah. So this is essentially competing ideas under a CBO. They all are competing for similar dollars.

[00:02:45] And so it's really asking Meta to decide which one is going to win because Meta wants to spend the max budget. So, you know, you're competing again with new against the existing in some cases, which isn't something I normally recommend. But by finding the initial set of winners, you're increasing the overall budget that's giving it room then to go to the existing one that's doing well and some of these new ones. And that is an OK thing to do with this because you're also setting minimum spend.

[00:03:14] So you're saying, hey, look, spend this much to compete. You know, he he does make a note that I think is important that the CBO budget needs to bake in about 30 to 40 percent additional budget for the CBO to spend beyond the minimum spends, which is will happen. But because it's Meta and they are doing this now. But it's an interesting way to think about it, because I think we do saw these legacy options.

[00:03:40] I think that they will. I don't think they're going to totally go away, even though we think they're switching us on to ASC. It looks like we can still be in classic mode and use this for a while. And I think it's used enough and gives people enough control that it does allow a good creative test. It's a hard thing to know how to do.

[00:03:56] But if you are really wanting to, you know, kind of let Meta decide, this is a good way to do it under one campaign and keep it as whatever percentage you're testing or whatever percentage your budget is testing anyway, which is usually in that 30 percent, 20 to 30 percent range. Have you noticed Meta's smarts? You know, like it's AI decision making when it comes to which ads to put in front of which people. Has it gotten better in the last like three months?

[00:04:22] Like I feel like about a year and a half ago or so there was a it got a lot better for some reason. And to me, it feels like it's just kind of staying put. Am I wrong there? Are you noticing like it's getting smarter in the last like recently? I would say I don't know that it's getting smarter. I would say what it's doing is making a lot of decisions faster. So that seems to be you're not having to wait as long for a determination of really something of like a clear read on something.

[00:04:51] I mean, I would say I'm sure Meta would say, yes, it's been improved. It's gotten better. Our signal has improved, et cetera, which I think you could make the case is true to some degree. But I would say it's making decisions a lot faster.

[00:05:04] And it certainly is, you know, there's an interesting school of thought that makes me this is the thing that comes up in my head when you ask that question of, you know, sort of if I'm turning on all optimizations at this point, if I'm turning on every single thing that we have, does that make my ads perform better? And the read initially has been yes. And so I think it's like, but everybody's different.

[00:05:31] I would suggest trying that in some campaigns for you and seeing if by turning on all these optimizations, Meta is actually performing better and more sophisticated than it had been in the past. And that's an interesting that's an interesting piece that I think we'll continue to debate and talk about as time goes on. And I mean, even though, you know, like you say, generally turning on the AI based optimizations of the recommendations to, you know, give you a bit of an edge, you still have to pay attention to kind of business realities.

[00:06:01] You know, we work with a client that only does business in the province of British Columbia in Canada, and they work with an ad agency, which is actually a great ad agency. But we started noticing because my agency handles engagement and moderation. So we see the comments and reply to them. We started noticing that of this BC only brand, we started getting inquiries from across the country and in the US saying, you know, is this available in Maryland? And we have to say, I'm sorry, it's just in BC.

[00:06:25] So, you know, all of these sort of optimizations and the recommendations that Meta offers don't take into account. Sometimes you do have some business reality. Sometimes you need to restrict things to get that done. So outside of geography, are there other things that we should consider pulling back from Meta's AI? Oh, man.

[00:06:47] I mean, I think in your example, that is a common thing that you'll hear because mostly because of social sharing. You'll see that the people will get it shared by someone. And then it's especially if it's a post that's gone viral and they'll say, well, why can't I get it? I'm in this state and, you know, I see it in my news feed. Right. You know, I think there's a you could look at two different lines in this. I think in some one camp there's to say, no, let Meta decide.

[00:07:16] They know better than you. Trust me when humans become involved in the human reasoning becomes and becomes involved. It's not going to work as well. And then I think there's this other camp of like control the levers as long as we possibly can and hang on to them. I sort of sit in a little bit of a little bit of both. Like, I think you always have to have a percentage of your campaigns that are leaning into what direction Meta is going because it will, you know, help you from a business standpoint.

[00:07:44] But ultimately, I still because of so many reasons that we all can identify with, you know, I don't trust that they're going to be able to make the right decision for me all the time. Yeah. And so it's hard. I mean, I don't have a great answer for that because I think it's there isn't a great answer for it. And it depends on which camp you're from and really what you have seen in your own campaigns. I think if you're higher spending, I think you could say, look, higher spending.

[00:08:13] I'm spending, you know, automation is helping us and we're doing great. We're able to turn out more than we thought. But I think a lot of people are in the, you know, they're in the medium spending category. In the U.S., I would qualify that as like somebody that's spending $50,000 a month on Meta ads. It's like that's a harder kind of thing to really lean all the way into when you're really focused on that daily profitability and you need as much control as possible.

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[00:09:28] Visit KINSTA.com to get this limited time offer for new customers on select plans. Don't miss out. Get started for free today. You know, I want to pull you back. You mentioned that Meta's AI is getting faster. By that, are we talking about the it's not the speed, I guess, as much as much as the amount of variables that it needs to make a decision?

[00:09:55] You know, I forget the number, but there was a point at which it needed like 50 conversions in seven days or something like that. Like there was a specific number that it needed by faster. Do you mean that that number has changed and gotten smaller? It's certainly the sample size has decreased, I would say, and the deterministic way that it's operating of this is going to be successful as much as that's faster.

[00:10:20] So and sometimes I think it's a little too fast, like it's not giving things a fair chance, which is why minimum spending and what we aforementioned is important. Right. Right. But I think that the overall decision making is quicker and that necessarily that isn't necessarily a good thing either. But it is it makes it does allow you make calls a lot quicker of what's working and what's not, generally speaking. You have a Slack community called Foxwell Founders that I have been in since the day you opened it.

[00:10:50] A lot of folks that are in there are are with agencies. Have you noticed a shift between sort of in housing and outsourcing recently in terms of meta ads and similar practices? Yeah, I think there's always an interesting difference between how people are feeling about this. I certainly feel that meta ads has it's had a really tough year, especially in the second half of 24.

[00:11:16] I think revenue from meta doesn't necessarily point to this be and I'm specifically speaking. Let's just talk about the U.S. market. I think if you're looking in the European market, you're looking in the U.K. Actually, meta ads is performing decently well and has is able. That's really where the growth from meta has come from in terms of meta advertising. OK, from a revenue standpoint. So speaking specifically about the U.S., this has been a common theme. It's been really hard.

[00:11:44] It's been to find great ad impressions and consistent conversions. And it's been a very rocky path. I think you can ask anyone that, which is why there's a lot of exploration on alternative objectives and incrementality testing, which is why there's, you know, a lot of talk around things that surround direct response advertising, like connected TV and things like this. And everybody's wanting to test.

[00:12:11] And I think that the feeling is many agencies aren't giving the quality. They're trying to grow really quickly and they're not giving the quality of time that an in-house team would for a particular brand that's fully thinking about this all the time. And to be successful, you need to be thinking about this constantly and consistently. And so I think the trend and this always goes in waves. I think that the trend currently is an in-housing trend.

[00:12:40] I think that that is a big, sexy topic. If you ask brand owners, they'll say, no, we're building our own team and whatever. And I think in reality, the best thing that you can do is have an in-house team that has some sort of connection with a paid team that gives them new ideas all the time. Because being in our community can help with that as well. I mean, that is a leg up for an in-house team, which we have plenty of them in the membership.

[00:13:07] But I think it's better if you have a selection of new ideas always kind of constantly coming into the account to give you thoughts. You know, one brand that I'm thinking of in particular, they do all of their media buying in-house. But they have at any given moment, they have three different companies on creatives that are creating creatives. Wow. And they're testing from three different companies in the same ad account.

[00:13:37] And they're using a CBO structure like I talked about before. And I think that is a way to be, that's an interesting way to be successful. Because you're saying, look, see if you can take big swings and come up with interesting ideas. And if, you know, they pay also on a base fee plus a percentage of how many conversions have come through those particular ads. So, you know, if your ad does great, it's an opportunity for you to make a lot of money. So it's interesting. I think that generally is the model that I think is the most successful.

[00:14:05] And that I believe will be the most successful for now. I ultimately always, though, will side with agencies. I think that there is example. I think there's always good, you know, it's good to build an in-house team. But I think that you, it's always good to have an agency working with you to make sure that they're bringing in new ideas, new learnings, new thoughts about how to run the account, new creatives, you know, because that's part of their duty.

[00:14:32] And an in-house team has a lot of other responsibilities. And they generally, especially if they're handling a lot of experimental in-housing, right, of what I talked about before, connected TV, things like that. That's a lot to also sit down and say, OK, now I'm going to enter into the meta ads and do meta ads really well. Yeah. And the thing is, doing meta ads now is like I've been doing this for my whole career, essentially.

[00:14:57] And the more we do it, the less I know I know every day because it's so much changing of these little nuances. So it's really what you're looking for. Right. And every platform has got its own sort of culture as well. You know, an ad that might perform really well on Instagram would flop on TikTok because TikTok has a less formal kind of appeal to it. God, three competing agencies in the same CBO. That would terrify me. That sounds very Hunger Games-like. It is. It is very Hunger Games-like. But I think it's interesting.

[00:15:26] You know, you never would want to have media buyers competing against each other. But if it's creatives, that's an interesting way to think about it. I'm not saying I would do this necessarily. But I do think that it shows kind of you need to understand that you don't know and that having partners outside is going to be, especially creative partners, is going to be a really big unlock for you. Andrew, thank you. Thank you. Andrew Foxwell is our meta ads correspondent. He's here every month.

[00:15:55] You can learn more about Andrew's digital ads training at todayindigital.com slash Foxwell or his Slack community of senior meta ad buyers at todayindigital.com slash founders. Both of those are affiliate links, and you can find them at the bottom of our show notes. That's it for today. I'm Todd Maffin. Thanks for listening. See you Friday for our weekly wrap-up of the week's digital marketing news.