C2 Native

In September, Meta held its inaugural Performance Marketing Summit. This event was not nearly as buzzworthy as Meta Connect, but for advertisers, it served as an important conference to assess the changes underway and upcoming that will impact their investments on Meta platforms. Overall, the dominant theme centered around new ad solutions and infrastructure that has been, and continues to be developed, to specifically address Apple’s iOS changes and the resulting impact on digital ad management, targeting, optimization and measurement. In line with this, Meta, like other major tech platforms in the industry, have also been investing in AI and machine learning to enable simplified campaign automations, while trying to still drive performance with less data. Here, we summarize the key learnings from the event that marketers should take into consideration and evaluate their value in the short-term to close out 2022, and mid to long-term moving into 2023.

1. Privacy Enhancing Technologies (PETs)

Throughout the event, there was a lot of attention given to privacy-enhancing technologies. Meta has previously stated that the expected impact of Apple’s iOS changes overall as a headwind on their business in 2022 is on the order of $10 billion. With that level of financial impact, privacy regulations and consumer expectations around data privacy, there has been a clear trend for quite some time now that less data is available to deliver personalized ads (as well as measure and optimize them). And so, over the past 12 months, Meta has been working on what they call PETs, promising to enhance their ad infrastructure in an attempt to regain what was lost in performance and future-proof their ecosystem for the post-iOS era with advertisers.

These technologies include solutions such as Conversions API for improved connection between a brand’s marketing data and Meta’s ad systems, as well as Multi-party Computation (MPC), which is Meta’s data clean room solution for sharing encrypted and unintelligible data between multiple parties. Privacy-safe improved targeting, measurement and attribution are some of the use cases that leverage MPC. The other two main PETs in Meta’s privacy advertising R&D are differential privacy, on-device learning and a Interoperable Private Attribution (IPA) framework that’s being developed in partnership with Mozilla, which seems to be gaining some traction. Of all these technologies, Conversions API drew the most mentions at the summit, followed by MPC; likely corresponding to current adoption rates amongst advertisers.

2. Measurement 360

How top marketers are approaching measurement today was the subject of a conversation between members from Meta and Deloitte, who together also released an accompanying whitepaper that outlines a new measurement framework. This framework, which the authors call Measurement 360, attempts to address the measurement challenges marketers are facing by taking a more adaptive approach. They advocate for a holistic (360) approach to measurement, consisting of actions like a comprehensive alignment on KPIs, an assessment of existing measurement capabilities to build a sufficient toolkit, testing and experimenting with different measurement methodologies (Media mix modelling and privacy-safe granular attribution), leaning into first-party data collection and analytics, and a consistent test and learn approach. Here are some data points from the paper that stood out:

1. Over 25% of surveyed brands with a highly effective marketing measurement strategy are already struggling with their marketing attribution, including social media, affiliate marketing, and influencer marketing, despite how popular these channels are in reaching consumers.
2. Over 60% responded that they are going through RFPs for new measurement services and platforms in the next 12 to 18 months (this data was mentioned during the event discussion, but not included in the paper).
3. Over 80% of advertisers surveyed are planning to complete one of the following by 2023:
   • Invest in an identity spine to better understand first-party data
   • Share data with partners for more accurate measurement
   • Invest in intelligent data lakes or a customer data platform (CDP) to centralize marketing data
   • Invest in data sharing clean rooms
4. Advertisers with higher measurement maturity use about 27% more KPIs to assess performance (this data was mentioned during the event discussion, but not included in the paper).

3. Performance 5

Performance 5 is the new name (not to be confused with Meta’s Power5) behind some Meta-recommended best practices that advertisers can implement to help increase ad effectiveness on their platforms. Here’s a quick summary:

1. Account simplification. At the Performance Marketing Summit, Simon Whitcombe, VP of Global Business Group at Meta touted this as the “single most important thing you can do”. The thinking here is to maximize efficiency in the learning phase to keep the overall spends in this phase below 20% of the budget.
2. Creators for direct response. Meta continues to push the importance of creators and influencers in the ad mix. They recommend investing 10% of Meta ad investment on creator marketing branded content ads. And If you’re already running creator marketing ads, look to shift 50% of allowlisting ads to branded content ads.
3. Creative diversification. In a Meta study of 100,000 advertisers across 200 countries, after 4 repeated exposures, a person’s likelihood to purchase dropped by 60%. To address this creative fatigue,Meta suggests diversifying assets through different formats (placement, medium) and concepts (visual direction, storytelling, messaging). To evaluate the diversification performance, Meta points to monitoring audience saturation through incremental reach metrics (rolling reach/net new audience).
4. Conversions API. We’ve already mentioned this as an important PET solution. According to Meta, advertisers across multiple verticals who followed best practices while sending events redundantly via the Meta Pixel and Conversions API received a 8% CPA improvement on average. Optimise Conversions API performance by increasing the Event Match Quality (EMQ) score.
5. Business results validation. Meta conducted an internal meta-analysis of 32 businesses that showed on average, last click attribution undervalues Facebook and Instagram by 47%. Accordingly, in an attempt to assess another benchmark value, Meta recommends conducting quarterly Conversion Lift studies to help gauge and validate Facebook and Instagram advertising.

4. AI & ML Campaign Automation

Like we’re seeing with Google’s Performance Max campaign type and TikTok’s recently announced Smart Performance Campaign, Meta is investing in and promoting more AI & ML-powered campaign automation for advertisers to facilitate simpler campaign orchestrations that are tied to business outcomes. Meta refers to this as their ”Advantage” suite of solutions with Advantage + shopping taking the spotlight at the summit. AI and machine learning also play a critical role in privacy-enhancing technologies’ ability to enable greater performance with less data (use cases include conversion modelling).

5. Marketing in the metaverse

Eva Press, VP Global Business Group at Meta, outlined three core areas that should be central to a brand’s metaverse strategy, along with a Meta-recommended investment allocation across the identified areas:

1. Build your foundation. 70% of efforts should be allocated in continuing to build strong web 2.0 foundations, because metaverse and web3 technologies and opportunities will be built on those building blocks such as frictionless customer experiences, social commerce, strong creator relationships and robust measurement plans.
2. Test and learn with AR. 25% of efforts should be allocated in leaning into augmented reality to test new solutions at scale, including things like mini games, interactive 3D objects, 3D scenes, and enhanced environments/2D marketing.
3. Explore emerging opportunities. 5% of efforts should be allocated to exploring future-forward ideas. Virtual reality and digital product offerings (virtual ownership and NFTs) were the two cases highlighted in the session.

We will be diving into this topic in greater detail with our upcoming Native Intelligence Report on the metaverse and web3, coming later this quarter.

Image Credit:

Unsplash, Dima Solomin