What are the biggest challenges direct-to-consumer brands face in Meta advertising?
Rising costs! And off of that, trying to determine if - even despite the cost - is Meta really our best option or is there something that will work better/be more cost-effective for us. Despite the increased utility of TikTok, affiliates, etc. for some brands, Meta is still an unrivaled acquisition platform for many DTC brands exploring alternatives.
Then, once you determine how much you want to allocate to Meta and at what target key performance indicators (KPIs), the challenge becomes reaching new, high-quality prospective customers and giving them a cohesive and compelling funnel experience that drives them to convert.
Lastly, related to the second challenge, generating a high velocity of platform-native, seasonally relevant, brand-aligned content…the tireless pursuit of your next “winner” and sometimes the accompanying realization that often a winning piece of creative might surprise you and/or be your least favorite.
What are the most common missteps that DTC brands make when setting up or optimizing their Meta ad campaigns?
It might be tempting to blast warm segments given the higher return, however, you will eventually saturate these segments. Monitor account and ad set level frequency regularly to make sure you’re reaching new people with your ads to bring them into your sales funnel. Without a continual flow of cold prospects, the warm pools will dry up.
Meta will often favor a single or a couple of ads within an ad set - sometimes rightfully so, but other times inexplicably so. Although Meta’s algorithm is very strong, overseeing budget distribution and optimizing in cases where the budget is being wasted is still very important. Along these lines, don’t give up on a top-performing ad set before you’ve explored ad optimization opportunities.
Though maintaining a high content velocity can be challenging, prioritize proactive creative testing and refreshes so your costs don’t skyrocket when you’re hit by a bout of creative fatigue or a seasonal shift.
What do you think is some low-hanging fruit for brands to leverage to see improved performance in Meta advertising?
We’ve found that when ads are performing well in Advantage+ Shopping Campaigns (ASC), it works well to then launch them in DiscoAudiences (and other top-of-funnel audiences). Utilize ASC for a testing ground for your top-of-funnel campaigns. It’ll also be an opportunity to build social proof on your ads.
This is an oldy but a goody but don’t forget to flip organic posts into your ad account! They already have social proof built up and can be part of your more comprehensive creative strategy.
If you’re running a lot of video content, ensure you’re retargeting video views audiences - particularly if you’re running Stories and Reels where interactions are more likely to be view-based.
You can check Meta’s Ad Library to see what other brands in your vertical or other brands who inspire you are running in their account! They’ve recently released high-level data for ads as well.
What are some indicators that your brand is ready to invest/scale up Meta advertising? How should brands determine their bidding strategies?
Post-iOS, many brands began monitoring their MER, or Marketing Efficiency Ratio (total eCommerce sales vs. total ad spend) more closely as a northern star for if their marketing mix was driving the desired, scalable impact we all hope for. Additionally, they incorporated post-purchase surveys and invested in Third-Party Attribution platforms to affirm Meta’s true impact.
The first step is determining the MER or customer acquisition cost (CAC): lifetime value (LTV) ratio you need to be at to justify scale. Then, if you have the budget, invest in one or more of the above solutions for additional confirmation so you’re not solely reliant on Meta’s reporting.
While the majority of your campaigns will likely run on the highest volume, it will also be good to periodically test cost-per-result goals. However, Meta might not be able to deploy your full budget with these deployed, so that should be closely monitored for these tests.
How should brands decide which type of audiences to target for different campaigns in Meta? (lookalikes, custom, interest-related, broad)
Brands shouldn’t limit themselves to one audience type because it’s great to have a comparative reference and it’s important to have alternatives in your toolbox when one of your audiences invariably dips. Also, don’t give up on an audience type forever! Something that wasn’t working well last quarter could be your top performer this quarter. Before pausing a top-performing audience, have you tried a creative refresh?
Stacking audiences is a way to try all three types without segmenting your account structure too much. Try Campaign Budget Optimization (CBO) with a broad, lookalike stack, and an interesting stack, and make sure Meta is allocating your budget in a way that’s actually serving you - if not, it might be best to control the budget at the ad set level and optimize accordingly.
How do you advise brands to select campaign objectives for different campaigns in Meta? (Impressions, Reach, Lead Generation, Conversions, Link clicks)
This totally depends on your goal(s)! For customer acquisition, I’d primarily run conversion/sales campaigns. Even though an alternative objective like link clicks or adds to cart might be more cost-effective upfront, “Sales” is going to drive the highest value prospects to your site who’ve been deemed likely to convert. Landing page views can be used to drive awareness and grow your retargeting pools, but you should assess how this impacts retargeting and overall performance.
Similarly, if you’re hoping to capture emails, the lead generation objective might have lower associated costs per action, but driving landing page views on a page designed to capture email will likely lead to higher quality, more engaged leads.
How should brands determine success in Meta?
This is going to be very vertical- and brand-dependent! For click-through rate (CTR), try striving for 1.00% and above then also monitor if there’s alignment between high CTR and high conversation rate (CVR) ads.
When it comes to the relationship between cost per action (CPA) and average order value (AOV)/return on ad spend (ROAS), you can pull two levers:
- Low price entry offers to prioritize a lower CAC with the data-backed understanding the CAC: LTV ratio will be favorable.
- Prioritizing AOV to boost ROAS by advertising bundles and other high-value items.
Along with pulling these levers, monitoring Marketing Efficiency Ratio (MER, total sales/total spend) to confirm that your marketing mix is having your desired high-level outcomes.
Also, starting conversations with fellow brands in our Disco Community Slack to gauge how your metrics align with other brands in your vertical.
How do Disco Audiences solve the current challenges brands are facing in Meta?
With DiscoAudiences, brands can leverage the power of the Disco Network along with our machine learning algorithm to drive more efficient acquisition in Meta relative to your core prospecting segments. We generate highly predictive prospecting audiences based on the pooled dataset of over 1,000 premium DTC brands and the transaction history of more than 65M unique shopper profiles. We offer free trials for you to prove our performance and flexible terms to acknowledge the volatility of our digital landscape. We provide a hands-on, consultative approach to be a partner in driving strong performance!
Book a demo and learn more about how you can leverage DiscoAudiences for Meta, Snap, and soon TikTok!