Meta’s Game Changing Updates: What You Need to Know

“Let’s test it.”

If you’re an e-commerce operator or marketer, you’ve definitely said this. Probably a lot. Probably recently. 

And you should be testing stuff. That’s the major benefit of digital commerce and marketing. You can make stuff, tweak it, push to different segments of your audience, iterate, etc. 

But is your testing becoming a kind of fetish? Are you testing everything without a clear purpose? Testing for testing's sake?

We get into that by featuring some of DTC’s biggest voices and best takes on how to think about ad testing to ensure you’re driving actual value.  

Also, Meta’s latest updates are on our radar—could their new features change the game for DTC marketers? We’ll explore how recent announcements may solidify Meta's dominance as the ad platform of choice.

Also - learn about the 95/5 rule from a 10-figure founder and we share a major announcement from YouTube and Shopify in our Quick Hits section (plus the Meta Bug of the Week).

This week:

• Ad Testing With Purpose

• Meta’s Shiny New Features

• The 95/5 Rule (and how it could change your marketing)

• Quick Hits

Ad testing with purpose

Let’s break this down:

• Many brands don’t have the budget for a $100k ad production, obviously, but what Cody means is to do the kind of deeper prep and research that would go into a major campaign. 

• With ad volume and velocity a requirement for growing DTC brands, the temptation is to make simple tweaks, get them in market, and “see what happens”.

• Unfortunately, that is not actually a functional testing framework. It’s just throwing random stuff into your ad account and crossing your fingers.    

Shorter version - it’s a mistake to spend more time on ad esthetics than ad messaging. 

Taylor Holiday and Andrew Faris support this in their recent podcast episode on ad creative costs:

• Ad iterations (minor changes to things like font, text size, background color, etc) only produce minor (and unpredictable) variations in performance.

• Don’t spend a lot of time and money on esthetic tweaks. In fact, Taylor notes that this is a great place to employ AI. 

• Messaging is what will reduce your risk of failure/ improve ad performance.

• Don’t just speak to your audience in general. Speak to specific personas within your audience. 

  • You’re not just talking to middle-aged moms (if that’s your demo). You’re talking to the 46-year-old mom in Texas who has 3  kids, a full schedule, and anxiety about her health and appearance. How does your product appeal to her?  

• If ad production cost is an issue, stick to statics. They’re cheap, and Taylor says he hasn’t seen any evidence that more expensive ad formats (e.g. video) generate better results. 

• Andrew disagrees with him here (a little) - your brand and its messaging might fit certain formats better than others. 

This tips over into a different discussion, which is how much you should invest in ads at all —>

• Taylor’s approach is a simple cost-to-value ratio assessment, i.e. consider your average ad production cost, along with its average value (or revenue generation). 

Say you have your messaging down. How much should you test then?

Jessie Healy, ex-CEO of growth agency Webtopia and head of performance at Etsy has some guidelines that might help:

As Jessie notes, brands that are scaling will also need to scale their ad production. If your ad spend has doubled, your new ads per week should probably at least double as well. 

Takeaway:

It’s tempting to ”just test it” when it comes to everything digital marketing, especially in ads, but that can become a kind of crutch. 

There’s no substitute for understanding your business, your market, and your target audience. Your efforts should always be rooted in research so can credibly theorize about what will move the needle and why. 

Otherwise, you can spend a lot of time running around in circles, testing things that don’t ultimately matter.  

PS: people want low-fi ads anyway, right Barry? 

Meta’s shiny new features

Over the past week, Meta has rolled out a few new features that may prove to be game-changing. Here’s a thread on what they are and how they impact you by  Rahul Issar of Reach Digital:

The first: Meta’s integration with third-party analytics tools.

• Now Meta can ingest info from platforms like Google Analytics, Northbeam, and Triple Whale to improve attribution. 

• Concretely, you might see an increase in CPM on Meta, but third-party sources of truth will likely show Meta performing better than before. 

The second: Optimize for incrementality. 

• The holy grail for profit-obsessed marketers. 

• Leaning on the data gathered from the many conversion lift studies Meta has enabled, it now has an optional feature to optimize for incrementality (ie; sales that otherwise would not have happened with the ad).

The third: Value rules.  

• These will allow you to adjust bids for different audience segments in the same ad set. This can be helpful for brands with SKUs that feature a wide range in margins or AVO. 

What does this mean for the ad landscape?

Eric Seufert, notes these features constitute a shrewd move by Meta. 

• Because Meta knows it drives more purchases than any measurement tool could attribute to it. Otherwise, they wouldn’t release an incrementality tool which would reveal its lack of effectiveness. 

• iOS privacy measures have made direct data aggregation for attribution complicated. Meta’s integration with third-party analytics tools allows them to skirt around these measures somewhat, but going with the incrementality algorithm might do away with the problem altogether. 

In other words, Meta has the best ad product. 

And if they can prove it to you, they may well increase the cost of their CPMs. 

Finally, a thread by Jonathan Snow about why he’s excited about Meta’s new functionality. He added this one to his list:

Takeaway: The new Meta updates are aimed at increasing the platform’s clarity and effectiveness for DTC marketers and brands. Which is why they are getting the thumbs up from many in the community.

But…they are also likely designed to ensure Meta’s stranglehold as the major ad platform remains (or deepens). 

The 95/5 Rule from a 10-figure Founder 

Preston Rutherford co-founded Chubbies, a shorts brand that achieved a 10-figure IPO. 

His one, big lesson: apply the 95/5 rule. 

• It states that only 5% of the people who see your ads are ready to buy. That means 95% are not quite beyond the awareness or interest phase, no matter how good your direct response campaigns might be. 

• What he learned is that you can’t really push people down the funnel – only be top of mind when they are finally ready to enter the consideration and purchase phase. 

• So - your brand and your ads need to be memorable. If people remember your campaign, value prop, or even name and logo once they are in-market for a solution, then you have a chance to make the sale. 

This rule builds on something John Dawes wrote in 2021 in regards to B2B sales and marketing. His takeaways at the time:

Ty Heath, the Director of Market Engagement for Linkedin, echoes many of these sentiments in this piece. 

“Because more often than not, the brand that is most easily remembered is the brand that gets bought.

Your job as a marketer is to start linking your brand to relevant buying situations – also known as category entry points – well before buyers enter the market, so when buyers do enter the market, your brand is the one that comes to mind.”

Takeaway:

“Take a day with your team. Remove all meetings. From a blank slate, think about what it means to do things that get remembered, that get noticed. What does it mean for your brand to be bold, to put on a show, and to have a little bit of fun?”

Preston Rutherford