2021 was a landmark year for digital advertising. Whether we are talking about Facebook/Instagram (now Meta) or Google, the biggest online advertising platforms, the changes were huge.
In short, the main changes were these:
- Less digital data because of Apple’s decision
- Less digital data because of personal data protection
- Facebook’s Conversions API platform
- A big rise in advertising costs
- Higher quality ad creative
What is “data”, and why do Google and Facebook need it?
Whether we are talking about Google or Facebook / Instagram and advertising on them, we are always talking about algorithms that need data to work effectively. But what data do they need?
In 2020, Facebook admittedly had the most advanced advertising algorithm. To give you an idea of how advanced it was, the advice to advertisers was: “Spend a fairly large amount to train the algorithm on which customers interact with and buy from your business, without setting any targeting other than your objective.”
The algorithm did everything. All advertisers needed was average-to-good creative, a correctly installed pixel (which was easy) and the know-how to use the platform.
Everyone’s job was easy, and e-shop sales were huge, as were Facebook’s profits.
Put simply, Facebook knew what someone wanted to buy from the posts they liked, the pages they followed and the websites they visited!
This is roughly how, through the Facebook advertising algorithm, public opinion was influenced during Brexit and in the US elections that brought President Trump to power. With access to all that personal data, the algorithm was so powerful that it could achieve incredible results.
Watch an interesting video that explains much of the above in relation to the elections.
Less data for Facebook because of Apple
In 2021, from February onwards to be precise, Apple stopped sharing personal data with Facebook without the user’s consent. Of course, Apple did this in its own commercial interest, but that is another discussion.
What actually happened was that Facebook‘s data was restricted to such an extent that it began to lose its power.
At first, you might think: “OK, there is plenty of data from other companies, so it is not that important.”
Yet Apple’s move was hugely important. Firstly, its market share is enormous, and secondly, iPhone and iPad users are the ones who shop online the most and spend the most.
The blow was heavy, and within 2–3 months returns started dropping from x10 to x7.
Of course, this affected Google too, though not as much, because Google has its own browser and a different way of advertising. Also, on Google the user searches for something they want, and most of the time they are already signed in to their account. So their intentions are clear to the algorithm.
Less data because of personal data protection
Another major blow is that most sites now handle the sharing, or non-sharing, of personal data more properly. You may have heard of GDPR, although the term covers the whole set of rules a business must follow.
Combined with Apple’s move above, this has made the algorithms even less effective and has also removed options from interest targeting.
Facebook’s Conversions API platform
To help Facebook, which had been hit hard, cope with the lack of data, the Facebook Conversions API (now part of Meta) was created, so that the server of the website / e-shop sends events directly, instead of them passing through the browser on your phone.
At the time, the Conversions API was still being developed, and it did not seem able to deliver the amount of data the algorithm needed to be as effective as before.
A big rise in advertising costs
The pandemic (with 1000% more new e-shops), combined with everything above, pushed advertising costs up.
Say a small business spent 800 euros a month on Facebook and 800 euros on Google and was making a profit from its ads. The many new e-shops that were created, combined with poor returns (advertisers believed they had to invest more), made advertising very expensive.
The minimum budget we now recommend for Facebook and Google is 1,500 euros per platform, so that the results are significant and any e-shop can be viable.
Higher quality ad creative
Because of the pandemic and growing competition, every company invested in the web. Big companies invested even more!
Ad images, and ad creative in general, now need to be more than just good. Photos taken on a phone are no longer enough; your e-shop and website need professional photography. Good photography and professional video are no longer an extra for an e-shop; customers expect them, and they are now the market standard.
In 2019, simple photos were enough to catch the user’s attention. Today, video is a must in ad campaigns, and its quality is what makes the difference.
Naturally, all of this comes at a cost to the company or professional.
What do we need to do to succeed with our ads?
Everything we have mentioned has made e-commerce a tougher space. It is often harder for newcomers, who have neither the customer base, nor the awareness, nor the know-how they need.
Patience
The first thing a new e-shop or website needs is patience. You need to be patient about results, as the first real results will come (depending on the product) after 1 to 1.5 years. What I usually tell new clients is that if your e-shop is not losing money in its first year, you should be pleased.
From all this, it should be clear that besides patience you also need to spend a decent budget.
You need to be patient with your ads, so that they run for enough days before you judge them and assess their results.
Consistency
Another important quality a business owner or company needs is consistency in actions, processes and advertising. Consistency is even harder because, at first, the e-shop will not make a profit. Consistency combined with patience will eventually lead to profit.
Advertising should never stop completely (it can be reduced depending on the season), and the creative and targeting should change with the season.
Creativity
Creativity matters in any advertising and in every aspect of your website and e-shop. Avoid copying what others do; stand out and stay one step ahead. Of course, this is very hard and takes hours of thinking.
A general rule: use your advertising to solve the customer’s problem, and the sales of your products will follow.
Read an earlier article on why an e-shop or an ad may not be selling your products.
It is very important to stay ahead of your competitors when it comes to advertising. If you do not have the budget to outspend them, think of more creative ways to beat them! Finally, from all of the above, you will have realised that you should never depend on a single advertising channel, whether that is Skroutz (Greece’s largest price-comparison marketplace), Facebook or Google, because any of them may suddenly stop performing as before for reasons outside your control.
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