This video + blog post collaboration was created by the AMAZING pair Heather Heddens + Dara Denney whom I am so proud to call members of the Thesis team.
Today we’re standing on the precipice of one of the biggest disruptors to digital advertising that has happened in the last decade. Ever since Apple announced their new iOS14 privacy restrictions, advertisers have been bracing for a shock to Facebook ads attribution.
Many advertisers already experienced a major loss of attribution in January 2021 when Facebook rolled out their elimination of the 28-day click, 1-day view window and automatically switched those ad accounts to a significantly shorter 7-day click, 1-day view window.
Soon Apple will begin enforcing that apps like Facebook provide an App Tracking Transparency Prompt (ATT Prompt) that gives users the option to opt-in or out of user tracking. This will once again force advertisers to reconfigure CPA and ROAS goals and increase the difficulty of optimizing campaigns to perform at peak performance.
While the ATT Prompt hasn’t been rolled out in its entirety on Facebook, we have spotted a version of this new prompt in the Facebook app which you can see below.
So how do we prepare for this impending loss of data? The answer for many advertisers is using Blended Return on Ad Spend as the new primary metric to measure overall performance. Blended ROAS is simply a brand’s total revenue divided by the total ad spend across all channels. You may have also seen this metric more trendily referred to as a brand’s Marketing Efficiency Ratio.
Below is a look at the breakdown of spend and Blended ROAS for 5 DTC Ecommerce brands in the month of February. Social spend includes all spend for Facebook, Instagram, Snapchat, and TikTok. Search spend includes all spend for Google and Bing. Rather than relying purely on in-platform attribution and making KPI goals specific to each platform, these brands set a Blended ROAS goal and use this metric to determine if ads are performing well and should be scaled or if ads are falling flat and spend should be pulled back.
This is ultimately just a return to basics. For awhile we were spoiled with an incredible amount of data that let us know exactly which ads were doing the best and exactly how many leads and purchases that a singular ad was generating. Advertising was profitable for brands long before these metrics were available to us. We know the successful marketers of the 1980s weren’t analyzing add to cart to purchase ratios. They were looking at total revenue divided by total ad spend and determining if the ad spend was truly worth it. No surprise: it was.
It’s time to admit the days of relying on a social platform’s native ads manager to evaluate and optimize ad performance are likely coming to a close. As so many advertisers who once relied primarily on Facebook’s strong in-platform attribution already know, these conversion metrics have only become less and less reliable over time. In 2021, Blended ROAS will be our first step as advertisers to overcome this wrench in platform attribution.