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One of the arguments I heard about iOS's tracking updates is that it would be good for marketers because these algorithms take credit for new customers that would have been acquired anyway.
Do Facebook/Google etc. take credit for new customers you would have gotten anyways?
Do Facebook/Google etc. take credit for new customers you would have gotten anyways?
For most businesses, the short answer is no. The longer answer is, it depends.
For larger and/or venture backed businesses that have more diversified marketing mixes or are getting sales organically, it is possible that Facebook is driving sales you would have gotten anyways.
For larger and/or venture backed businesses that have more diversified marketing mixes or are getting sales organically, it is possible that Facebook is driving sales you would have gotten anyways.
If larger/VC brands are the only ones you've worked on, it's understandable why you might be skeptical of 1 channel driving most growth/ believe in self-fulfilling prophecy.
If you’re facing this challenge on FB, you’re probably facing it everywhere. Its a measurement problem.
If you’re facing this challenge on FB, you’re probably facing it everywhere. Its a measurement problem.
To quote John Wanamaker: Half the money I spend on advertising is wasted; the trouble is, I don't know which half.
The good news is there are a number of ways to measure if this is the case. Unlike some other channels, Facebook allows you to measure for incrementality to prove the sales you are driving are actually incremental. There's a lot of nuance to why this credit stealing might happen.
There are tactics to reduce the number of orders you would have already received from being delivered in optimization by changing how you target and/or bid according to why Facebook might be serving ads to people likely to buy (again, depends on the situation).
However, if you're spending serious money bootstrapping and are not a large enterprise or one of the 0.05% of businesses who raised venture capital ( https://www.entrepreneur.com/article/230011 ), this is probably not the case.
What will the impact be for actual small businesses? (i.e. the ones who make up ~76% of Facebook's ad revenue according to Deutsche Bank, represent over 99% of the economy according to the SBA and rely on personal savings to start 77% of the time (source: https://www.prnewswire.com/news-releases/entrepreneurs-rely-on-personal-savings-second-jobs-to-fund-critical-first-year-300936339.html)
If you've ever run an incrementality test for a brand like this OR set up post-purchase surveys for a brand like this (OR shut off the ads), you'll likely see Facebook is the lion share cause of these sales.
This is because, when you have a simplified channel mix and low baseline awareness in the market, the ads are really the only thing getting your product in front of new relevant eyeballs.
More importantly, these ads are the easiest and most cost efficient way to get your product in front of new relevant eyeballs with scale. If there was a better way, we'd all be doing it.
There might come a time in your company’s lifecycle where another sale flywheel is created and when that happens, you can start to ask what is the incrementality Facebook is driving and how do I make sure it’s not taking credit for orders I would have gotten anyways?
(In all the audits I’ve conducted for the bootstrapped business category, I’ve only seen Facebook optimize for orders against new people that would have already bought in one instance.)
But again, for most businesses (ie small bootstrapped businesses), this is prob not the case.
But again, for most businesses (ie small bootstrapped businesses), this is prob not the case.
