What Changed in Facebook’s New Algorithm and What is the Impact to SaaS Bidding Platforms?

 

 

For many advertisers, Facebook offers the highest volume and quality source of advertising traffic. Fully capitalizing on the potential of the Facebook platform requires heavy testing and, more importantly, continually adapting to changes in Facebook’s advertising strategies and algorithm. Over the past few years, Facebook has ramped up the frequency of advertising product changes, and top advertisers have followed suit by ramping up the frequency of strategy changes. Looking back historically, the strategy we deploy today is very different than the strategy we deployed six months ago. Interestingly, this statement would hold true for any backward-looking period of time over the past five years. Put simply, our strategy is always changing to keep up with Facebook.

 

Keeping Up With Facebook’s Algorithm

 

Because Facebook’s product and our advertising strategies both change rapidly, our recommendations for best practices are frequently updated. The following in-depth guide to best practices should be considered a snapshot in time that is certain to change over time. Additionally, it’s important to understand that each Facebook advertiser is unique, and there isn’t a universal strategy that would be optimal for each advertiser. For instance, we’re seeing tremendous success with Facebook’s value optimization option, but we have clients that perform better with conversion optimization rather than value optimization. We recommend running A|B tests for each of our recommended best practices versus just accepting them as the best option for managing your unique business may vary.

With the above context, over the past several years, machine learning on platforms like Facebook and Google have reduced the level of effort needed by advertisers to manage and optimize their ad targeting, bids, and budgets. As their algorithm changes, user acquisition strategy must also adapt. Over the past two years, their systems have evolved from bidding for impressions to clicks, to installs, to events (purchase), to value.

This shift has improved the quality of traffic and simplified the ad buying process. Additional improvements have been made in using broad audiences (no targeting) and the introduction of native rules inside Facebook’s Power Editor and user interface (UI) changes to improve traffic quality and simplify ad buying. As automation and AI level the playing field between large and small advertisers, they have also simplified the work required to maintain performance, using fewer, less trained user acquisition of human resources.

 

Exploring Facebook’s Most Recent Updates

 

As a recent example, Facebook’s algorithm changed in the middle of February 2018, and it now rewards advertisers who adhere to their best practices. This affected the strategy for user acquisition managers who may have previously relied on trying to game the Facebook algorithm or develop their own proprietary AI systems outside of Facebook, and the impact of these changes was felt industry-wide. Previously, Facebook did not penalize advertisers for using an ad-buying strategy that required a high volume of ads with significant overlapping audiences that frequently made intraday changes to bids, budgets and pausing of ads.

As of mid-February, this all changed with the introduction of a penalty for significant edits and rewards for adhering to Facebook’s published best practices, outlined in their “Blueprint Certification” online training and highlighted in this video. Facebook media buying strategies have shifted and now benefit by using a low number of campaigns with limited audience overlap, leveraging broad targeting, automatic placements, and much fewer intraday changes to ads. But most importantly, an ad’s performance does much better when it is allowed to complete their learning phase and move into the optimized phase, which typically requires 50 conversions per ad set, per week.

 

What Does This Mean for UA Advertisers?

 

Now that Facebook’s optimization has been radically simplified, ad creative has become the primary differentiator for Facebook advertising performance. As with most display networks, Facebook ad creative rapidly fatigues with increased spend and audience reach. The more you spend, the larger the audience you target, the faster your ads’ performance will erode.

Advertisers are now shifting their focus and resources away from manual bidding adjustments towards creative strategy, production, and optimization. Cutting-edge user acquisition experts have realized that maximizing return on ad spend (ROAS) is more efficiently achieved through creative optimization and testing.

 

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READ OUR OTHER whitepapers for creative best practices for Facebook & Google social advertising.

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