What to Do When Facebook Ads Keep Getting Harder?

hhhhhhhhhhhhhh said:

Why Are Ads Becoming More Expensive?​

1. High Competition
   • More advertisers are running ads, increasing the cost of bidding. Previously, CPM was only $2-3, but now it ranges from $15-20 or more.
2. iOS 14 Update
   • Facebook's performance isn't as optimized as before due to Apple’s changes impacting data tracking.
3. Facebook’s Focus on Big Businesses
   • Facebook appears to prioritize large businesses that can spend massive amounts on branding, sidelining small businesses or individuals who generate less revenue and more policy violations.

Click to expand...

oldguyjoe said:

1. Something innate to all growing ad platforms. Nothing can be done with the CPMs, but you can improve your CTR and overall conversions.

2. I am surprised you didn't mention sever side tracking that bypasses many cookie/JS based tracking implementations.

3. All businesses do, but Facebook is particularly bad at cooperating and communicating with smaller advertisers. Again something that you as an advertiser don't really have any real control over.

Click to expand...

hhhhhhhhhhhhhh said:

Why Are Ads Becoming More Expensive?​

1. High Competition
   • More advertisers are running ads, increasing the cost of bidding. Previously, CPM was only $2-3, but now it ranges from $15-20 or more.
2. iOS 14 Update
   • Facebook's performance isn't as optimized as before due to Apple’s changes impacting data tracking.
3. Facebook’s Focus on Big Businesses
   • Facebook appears to prioritize large businesses that can spend massive amounts on branding, sidelining small businesses or individuals who generate less revenue and more policy violations.

---

How to Stay Profitable Despite High Costs?​

1.​

• Boost the profit per order to offset ad costs. Strategies include:
  • Raising prices
  • Upselling, cross-selling, and down-selling
  • Offering bundles or combos
  • Selling higher-value products

2.​

• A higher conversion rate ensures profitability even with high ad costs.
  • Optimize your store’s user experience (UX).
  • Improve product pages and designs.
  • Continuously test and refine strategies to improve CR.

3.​

• A critical metric for seasoned marketers. Why? Some advertisers spend money on "free" products or even break-even campaigns because they know their CLV.
• Example:
  • If you sell a product for $50 with $30 profit, and the customer never returns, you make $300 from 10 sales. If your ad spend exceeds $300, you're at a loss.
  • Another advertiser with a 50% repeat customer rate earns $450+ from the same 10 sales because customers return for second or third purchases.
• Key Insights for CLV Optimization:
  • Build a Strong Sales Funnel
    Design a well-optimized funnel that nurtures repeat purchases. Invest in excellent customer care to retain existing customers.
  • Product Quality Matters
    Quality is the foundation of repeat purchases. Partner with reliable, ethical suppliers to ensure customer satisfaction.

Click to expand...