As we’ve seen in the prior pages, the largest ad platforms have automated many of the tasks UA managers used to do. Much of the day-to-day operations work UA managers had been responsible for has shifted over to Facebook and Google’s advertising algorithms. So what does user acquisition automation mean for UA advertisers, managers, and teams?
User acquisition advertising simply requires less work and less expertise than it used to.
So, does this mean UA managers and their teams aren’t needed anymore? And even if they’re needed less, what are the consequences of that?
What should UA teams and UA managers do in this new environment?
We believe they should shift their focus to creative testing and optimization.
Here’s why: Creative performance has become the only lever where marketing and/or UA teams can have a large impact on ROAS. This can be done by testing and scaling creative.
Because “creative is king” now, sourcing effective ad creative is critical. There is an increasing call for media buying teams and creative teams to have better collaboration in order to take a more quantitative approach to creative development and testing in order to boost ROAS.
See our other whitepapers, like our 2020 Definitive Guide of Facebook Ads Creative Strategy, Creative Testing and Launching New Games, or our 2020 Facebook Advertising & Google App Campaign Best Practices to learn more about the massive impact of creative on UA ROAS, and how to leverage it to your advantage.
“This is going to be a human-driven business for five to 10 years… For the foreseeable future, humans will do the work in creative analytics. The opportunity is to become good at creativity. The question is how you evolve your creative thinking.”
Brian Bowman, CEO of Consumer Acquisition
So this is where we are in Q2 2020: Not only can “the machines” efficiently run advertising campaigns but if you want optimal performance, you should constantly be testing how to hand over control of your media buying to their algorithms.
That often makes UA teams nervous. Usually for one of two reasons:
Yes. Machine-managed campaigns can perform within 10% (+/-) the performance of human-managed campaigns, and this performance is certain to get better quarter-over-quarter.
Want proof? Check out the 30 case studies Facebook has on its Power5 page.
E-commerce company Kortni Jeane is just one example. Kortni Jeane, a swimsuit retailer, used Facebook’s Campaign Budget Optimization and consolidated some of their audiences to get a 22x return on ad spend.
That is not a typo. They got 22 times their ad spend back in revenue. And they got 57% higher revenue in February 2019 than they did in February 2018.
Here’s the deal: The algorithms work. They can crunch the numbers way faster than a human can. They’re built to review billions of data points, to calculate and recalculate that data to achieve the haloed goal: Serve the right ad to the right customer at the right time. But there are UA managers who don’t have to fear the machines.
Yes – part of it. We’ve reached the tipping point where humans have to let go of the intra-day ad management tasks they used to control as part of the value they provided to a company. Machines are quickly becoming better at granular campaign management. The good news is that when the machines’ campaign management capabilities are partnered with a human for idea expansion, the combination is very powerful.
If the bulk of your time at your job is spent running reports and poring over spreadsheets to find small pockets of opportunity, you must expand your skills. The machines can simply do this faster and better than people can, and by several orders of magnitude.
Does this mean you’re about to be out of a job? ABSOLUTELY NOT!
You have an opportunity to expand your skills into new areas of focus:
Some experts have compared our new environment to a pilot flying a plane. The pilot has this huge dashboard of data inputs they monitor, even though the plane automates a lot of its own systems. But there’s still a keen need for a human to be there, making sure the machine takes appropriate actions.
The human is there to overcome the primary weakness of the machines: The algorithms only do what they’ve been coded to do based on patterns they’ve seen in the past. They cannot conceive of new creative concepts. At least for now, only humans can do that.
You aren’t going to be making bid edits or sifting through dozens of audiences and ad sets/ad groups all day anymore.
So what? You’ve got better things to do. To develop better creative, for starters. As we’ve discussed, now that every advertiser has access to algorithmic campaign management, most of the advantage advertisers used to get from adtech is gone. High-performance creative is the only real competitive advantage left now, and this will become increasingly apparent as Google and Facebook’s advertising algorithms take over more and more of campaign management.
If success hinges on creative, it’s time to get serious about creative development and testing. These four resources can get you started:
One last word for UA teams worried about these changes: Given the speed and intensity most of us live at now, and the pressures most UA managers are under, should we really worry about machines taking over granular campaign management? Did you not have enough to do already? Most of the UA managers and teams we know are very busy people.
So now that the quantitative side of UA management has been streamlined, what’s a UA professional to do? Smart UA managers will pivot over to creative strategy and testing. But if you had people on your team that was exclusively doing media buying or that were only adjusting bids or budgets and building new lookalike audiences … their desks may be empty soon.
So let’s be clear: We do expect some layoffs and reduction in user acquisition team sizes in 2020. Even Uber laid off a third of its marketing department last summer. We suspect this is driven at least in part by new automation capabilities.
But here’s the doozy: The automation capabilities driving those layoffs won’t just affect a small group of well-funded advertisers who have access to expensive adtech. These automation features are available to everyone. Facebook and Google’s AI capabilities are free.
This could affect not only the user acquisition community, but also ad agencies, marketing consultants, and in-house marketers all over the world — especially those firms who focus on the SMB market (small to medium size businesses).
Small businesses are always pressed to maximize their budgets, and if it takes less work and expertise to manage digital advertising than it used to, SMBs will probably embrace automated campaign management as soon as they trust it to do a better job than their human Facebook ads manager can. That trust is not completely in place yet, but it’s building.
Returning to the UA world, smart UA team members and other individuals must pivot to creative strategy, creative competitive analysis, and creative testing and optimization. The only alternative they have is to become specialists in how the algorithms work and in the new features the platforms are offering, like Google’s Pre-Launch tool and other features, so they can better manage their remaining levers of control servicing the top end / most sophisticated advertisers.
But even if they take the path of being “algorithm managers,” their skill set still has to evolve.
You can’t be in an industry that’s evolving as fast as UA is and not radically and continually improve your skills.
As business owners consider their own UA teams now and into 2021, they may see opportunities to reduce some overhead or to hire less experienced and less expensive media buyers.
So leaner UA teams are probably the future, and we’ve seen some teams consolidate already.
So the roles of individual user acquisition professionals and teams may change. But the role of user acquisition teams as a whole may change, too.
For a long time, we’ve built up a bit of an organizational wall between acquisition teams and growth teams. The functions of these two teams were fairly separate. UA teams got the customers and growth. Or product teams tested the app for better engagement, monetization, and lifetime value.
But is that separation really necessary – or even beneficial? Both teams are interested in LTV. And advertising platforms are simplifying to the point where advertisers just give the algorithms a profile of the type of customer they want. So might it make sense to overlap or merge the staff and the functions of UA and product teams?
It’s essential to consider the role of creative development and creative strategy in all this, too. Ads use an awful lot of creative assets from the apps themselves. So could creative testing morph from a user acquisition role into aspects of product development? Could growth teams be influenced by user acquisition so that they develop different paths through apps for different types of customers?
Some companies are already exploring how UA teams and product teams can be more closely aligned. Creative and quantitative testing might be their common ground. That could mean (among many other things) merged teams… and that makes for more opportunities for business owners to reduce their overhead.