How to adjust to the new Facebook Ads reality

The world has changed significantly over the last 24 months and right now is a great time to reassess your marketing spend allocation.

According to our data, Facebook spend is being pulled back significantly.

As eCommerce brands look for alternative marketing channels, advertising spend on Facebook is plummeting. Let’s take a look at the Facebook spend drop across our marketplace.

Online Marketing Spend by Channel (July 2022 – August 2022)

The above chart shows us that brands spent 31% less in August 2022 than in August 2021. The overall drop is driven by primarily less efficient performance on Facebook. Spending is down 68% compared to August 2021. As dollars shift away from Facebook, we are seeing some increased spend on both Google and Amazon.

Why is this happening?

Here’s what eCommerce business owners are saying:

1. Recent iOS changes 
   • Apple privacy changes make it harder to target ads to smartphone users based on their online activity. For platforms like Facebook with heavy mobile usage, this means less efficient advertising. You are spending more on Facebook to acquire customers than you were in the past.
2. Covid easing and the return to retail
   • Covid infection rates have decreased substantially, resulting in more brick-and-mortar retail traffic. In the short term, this means we are seeing a pull-back from eCommerce spending.
3. Marketing spend hibernation
   • Uncertainty and volatility in return on Facebook advertising means our customers are taking a “pause” on Facebook spending and trying other platforms. 

So, what do you do now?

We recommend doing the following two things:

1. Shift spend to more successful platforms and experiment on others
   • Our clients are finding value investing marketing dollars in Google Ads and Amazon Ads to drive sales. These are seasoned platforms where you can constantly refine your message.
   • We encourage you to explore expanding your marketing spend footprint to include other channels of customer acquisition such as influencer marketing, TikTok, YouTube, Instagram, and other platforms.
2. Pause marketing spend
   • Do not be afraid to cut your marketing budget dramatically in months where you typically experience a low return on ad spend (ROAS). You can check yours by signing into your Brightflow AI account here.
   • If your ROAS is very low in any particular month, pull back your marketing spend significantly. You should be pulling money away from low return intervals to your high return intervals.

Takeaways

Save money and hibernate when yield on ad spend is low. But when it’s high, hit it as hard as you can. Your low earning months don’t matter. Capitalize when your business and your marketing dollars are the most efficient!

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