Has this ad fatigued yet?
I’ve seen it more than 6 or 7 times, but Shopify keeps running it. Is it a profitable ad? Well, it must be, assuming that Shopify team’s keeping a close watch on their Return on Ad Spend (ROAS).
At Spiralytics, we’ve bumped into several companies where Facebook (or even GDN) advertisers “set it and forget it.” Their usual process includes ad creation, determining their target audience, submitting the ad, letting it run for a month, and then coming back to check on its results.
Often at the end of the campaign, they’ll come back to the metrics, measure the results, proclaim “Facebook Ads don’t work!!,” then never return to Facebook again. In many cases, this is a huge mistake.
I’m going to show you a case study where a campaign performs wonderfully until Ad Fatigue kicks in. The performance metrics immediately declined, which, as a result, effectively killed all cost per lead gains achieved in the initial days.
First of all, here are some definitions of the columns in the data below:
- Reach: Number of people the ad can be served to after targeting has been applied
- Daily: Number of people that sees your ad on a daily basis, based on budget and estimated CPC
- Budget: Daily budget
- : Actual number of people that saw your ad that day
- Clicks: Number of people (or bots J) that clicked on your ad that day
- Click through Rate (CTR): Clicks/Impressions
- Cost Per Click (CPC): Depends on your targeting and how many others are targeting the same people
- Spent: Amount of your budget spent
- Conv: Number of conversions
- Conversion Rate (CR): Conversions/Clicks
- Cost per Lead (CPL)
- CumReach: (Calculated) Cumulative number of impressions in your campaign
- Imp/Person: Average number of times someone has seen your ad (Cum Reach/Reach)
Building this up from launch, you can see the following healthy campaign:
By “healthy” meaning:
- CPC/CTR/CR is consistent
- Our ultimate metric, CPL is consistent
Now, on day 7 of our campaign (while this company was asleep at the wheel), the campaign starts to spin out of control:
Notice the metrics highlighted in red:
- CPC starts to increase
- More of the budget is spent
- CPL goes up
- Marked is the “4.0” point, which everyone targeted has on average seen the ad four times
Now let’s look at the campaign after the inflection point:
The trend gets much worse:
- CPC goes up by a factor of 4
- Spend increases
- CPL skyrockets
- Notice that CR, for the most part, stayed consistent. Once the people are on this site, they convert at the same rate. Facebook was just having trouble convincing your target to click on the ad, hence the campaign metrics deteriorate.
Why does this happen?
There’s a balance of things going on that create ad fatigue:
- Facebook revenue optimization: If less and fewer people are clicking on your ad, Facebook effectively loses money. At that point, they have two choices:
- Stop showing your ad (someone else gets the impression)
- Charge you more for the ad
- People do get annoyed when they see your ad over and over again. More impressions will not encourage someone to click once you’ve presented someone your USP.
So, how do I prevent this in my campaigns?
- Report on ad-level conversion metrics daily.
- After a few ads run, you’ll get a feel for your range of “impressions/person” for where the ad will fatigue.
- Indicate this metric in your reports and pause ads as they approach fatigue.
Pro Tip: Your best performing ad will fatigue in most cases. Always maintain a list of historic top performers and when they were last paused. After a month or so, you can safely run them again and see fantastic performance once more.