DON’T PANIC! Facebook’s Ad Targeting Updates Aren’t as Scary as They Seem

Garrett Holmes: Well, thank you so much for joining us, Dennis. This is kind of a crazy time for all of us in the digital marketing world right now. So to start things off, if you could kind of just tell us what Facebook is doing. Kind of explain it like we’re five. Dennis Yu: So Facebook is under pressure from the government and from consumers and the media because of this outrage. And Facebook’s been very sensitive to the fact that when people say bad things about Facebook because you can target gay people or black people or the KKK, or there’s the hint that the Russians maybe have used Facebook to manipulate the U.S. general election, or any kind of nonsense like that, Facebook’s natural reaction is to try to pull back from a PR standpoint. And also, I know having met Mark Zuckerberg a few times, he actually does want to do what’s right for the community. So what you’re witnessing now is two things. One is that the media and the government regulators are saying, “My goodness, something must be done. Our data is not being protected. There’s Cambridge Analytica where they’ve got 50 million user profiles, where there’s other people that are nefarious that are using our data, or there’s a data breach.” None of those things is actually true in the extent of what the media is talking about. The second part is Facebook’s reaction, which is how they’re pulling back a lot of the targets. So they’ve pulled back the third party partner category targets, which is Acxiom, Epsilon, Datalogix, and the other partner data that’s related to that. They’ve pulled back a lot of job title targeting, they’ve pulled back certain kinds of interest targeting. They’ve pulled back a lot of targets, and they’ve also stopped all messenger app approvals, as you guys know. And that’s a response to make sure that they can get ahead of the regulation. You probably know, in Europe, there’s GDPR, which is about getting consumers opt-in to be able to be targeted with someone else’s data. And so by pulling a lot of the data that we used to be able to use, some marketers are freaking out saying, “This is the end of Facebook. It’s no longer useful. My ads are getting disapproved.” And other people are saying, “Hey, it’s business as usual. Everything’s just fine. We can rely upon the algorithm to do the work for us. I wasn’t using those kinds of targets anyway.” And the truth is actually in the middle. So for those of us that maybe aren’t doing Facebook ads for a living, that maybe aren’t talking to Facebook multiple times per day and working closely with them, here’s what you need to know. If you are running Facebook ads, make sure that you do not do anything that violates the terms of service. Facebook is cracking down on people that are doing things that maybe you were able to get away with before, but now, I’ve seen messages just in the last week, other people saying, “Dennis, my ad account’s disapproved. These ads, they used to be working for a long time.” Yeah, well, they should’ve been disapproved before. ‘Cause there’s two and a half million advertisers on Facebook. Can you imagine? I think Facebook has five thousand people that are there trying to do account management and ad approval, that whole policy group. Five thousand people trying to take care of ads that are being submitted by two and a half million advertisers. So that’s probably five hundred, six hundred thousand ads per day to be handled by just a few thousand people. That means they literally have just a few seconds to handle each ad as it comes through. So often, they’re going to accidentally disapprove an ad that should have been approved, and they’re going to approve an ad that shouldn’t … They’re gonna make both kinds of mistakes. So, first off, make sure you understand policy because when you get an ad disapproved multiple times when it happens enough times, they will shut your account down and you won’t get it back. So, number one, right, don’t let your account get shut down because then it’s really hard. Then all you try to open another account. There’s all these different tricks people try to do. Just please don’t go there. That’s number one. Number two is let’s try to do things Facebook’s way. Let’s create one-minute videos where we’re entertaining and educating. Let’s bring people through the awareness engagement conversion stages, which we know has always been right. Those are the fundamentals. And if we do that, we don’t need to rely upon all this crazy kind of targeting. A lot of people, they screw up their Facebook ad account, not because Facebook is difficult or disapproving ads, or things are changing and Power Editor’s going away. It’s not because of that. They’re screwing themselves. Most Facebook marketers, they get in the way of themselves by trying to over target. ‘Cause if you set a certain kind of targeting in your ad, then Facebook has to honor that. And then they will sub-target within that group that you select, which is what oCPM does. It does automatic bidding and automatic sub-targeting. So actually if you set up things properly, you have that three by three grid of awareness, engagement conversion, nine pieces of content, three times three, and then you set up lookalikes in the right way, you set up custom audiences in the right way, you actually don’t have to touch things in terms of micro-targeting. You can let the system do the work for you. Most people are creating too many ads. They’re going straight to trying to sell off of a cold audience. If you try to convert lookalike audience, that gets low relevance score. So all the things that you were able to get away with before are now starting to become higher penalty. So maybe you had ads that were converting that were relevant score two, and high negative feedback, but it was still … Even though users didn’t like it, but it was still profitable enough that you kept going with it. You should look at trying to fix those ads, ’cause there’s a chance you’ll get disapproved on those. The third thing is if you are running targets that … Let’s say you’re an auto dealership and you are using partner bulk data that’s tied back to Acxiom on auto and tender. People who are in the market to buy a car in the next six months, people who currently have an Acura and they want to buy a new Acura, maybe. Or people who have an old BMW and maybe they want an Audi. You need that kinda data? All that data’s going away. The behavioral data that’s related to point of sale, to loyalty programs, to registration, all that stuff from Acxiom, Epsilon, Datalogix, which is owned by Oracle now, all that data will not be available progressively until October 1st. So it’s not being pulled away right now. You’ll still see a lot of it there right now. So if you are reliant upon that data because you are in a particular niche where you just have to have that, then you’ve got to get creative in terms of the targeting that you have. You have to be able to step, move one step up in the funnel, right? The thing that Facebook announced three days ago, which I think most of us knew was coming … Actually, they mentioned it, I think, in our developer group a month ago, they pulled away reach estimates. You remember when you have a custom audience, it’ll say, “Well, you should be able to reach this many people. 10,000 people or 100 people or whatever it might be.” And so they’re pulling away all of the different estimates on how big that audience might be, which is actually really key If you’re doing planning. So inside Audience Insights, inside the Ad Manager, other places where it estimates how far an audience would reach on custom audiences. So what do you do about that? You have to test smaller. So you have to start with a dollar a day. Because if you don’t know what it is, the last thing you want to do is put a budget what’s ten times what that audience will sustain. Then your frequency goes too high, and then you’ve burnt out that audience, and then the relevance score quickly rates low, high negative feedback, which causes your CPM to go up and then you burn out that whole ad. So that means you’ve got to be more careful about your testing. That means you start with a dollar a day, and if it’s working, you can extend it. Here’s another thing that people aren’t using, but they should be thinking about now, because of these changes and how fast they’re accelerating. ‘Cause Facebook’s gonna continue to pull more targeting. They’re gonna continue to ban ads, ’cause they’re gonna do anything … They don’t care about the extra million or two dollars that you might have, let’s say. “Oh, but Facebook, they’ll care about my million dollars of ad spend.” No. Actually, they make 17 billion dollars a quarter. They don’t care about that. So what you have to do is be more progressive in the way that you test. And here’s one thing that almost nobody’s using on Facebook, but is super powerful, automated rules. Have you seen how automated rules work? It’s inside your business manager. If you click that hamburger menu, “All Tools.” Scroll over to the bottom towards the middle right, middle bottom, and automated rules allows you to set up when you turn ads on and off. If the frequency is too high, if my cost per action or cost per conversion is above a certain amount, then decrease the bid. If it’s working well. If my CPC is below this, then put another ten dollars a day against it. Or increase my total budget, or increase my bid. Or all of these actions to turn things on and off and change bids and send me an alert. For example, I have an alert set up that any time an ad has a higher CPM than $25, I want to see an alert, because that’s a sign that something’s not right. ’cause my ad should be about a six to a seven dollar CPM in the United States. And if it’s higher, that means I’m violating 20% text rule, I’m getting high negative feedback, the audience is too small. So when you use automated rules, that’s gonna help prevent you getting in trouble with Facebook, because more disapprovals … I think they’re gonna be more sensitive. It used to be you could get away with a lot more disapprovals, but now you’ve got to be more careful. And the other thing is that, with more ads being there in the system, the more competition there is, the more expensive things become, the more important it is to prove that something’s working organically, and then do dollar a day boosting, and then rely upon custom audiences built off of those video watch audiences. You don’t need that third party partner data except to kick things off, ’cause once it becomes an email address, once it becomes a custom audience, once it becomes a video watch audience, which all those are custom audiences, you don’t need those targets. Then you’re relying upon oCPM and the system does the work for you. You’re home free at that point if you can build those audiences. So all the more emphasis on one-minute videos, on one dollar a day testing, on not relying upon tricks. There was an article that came out a couple days ago about a guy who ran a cloaking network that spends a billion dollars a year on Facebook where you can send people … cloaking is when you send people to … If Google bot or Facebook’s bot comes, you send them to one page, but if it’s another user, you send them to another landing page. So you’re trying to trick Facebook and Google’s ad disapproval system. And I, unfortunately, know a lot about that kinda stuff, but those sorts of things you don’t want to mess with. Increasingly, the penalty for using tricks will get you in trouble. I think that’s the main thing people have to realize is that Facebook says, “You know … ” So Facebook in their … I don’t want to say they’re naive, but let’s say … I’ve been doing ads for 11 years, Facebook, and they just kind of trust. They’ve had this naive trust of advertisers, where they just give you all of these features. The whole idea of move fast and break things, which is stuff that’s made by 23-year-old engineers, ’cause I was one of those, too, 20 years ago, was “Hey, here’s some cool features. Let’s just give this kind of targeting out to people and see what they can do. Let’s release this new functionality.” And so they trust that we as developers and marketers, we’re not going to abuse that. So there are people who will build … When Facebook launched the F8 platform in May of 2007, anybody could build an app. Which then, “Oh, your friend would like to invite you to play this game and also wants your friend’s information, the friend and fan information.” Okay, cool. But they didn’t anticipate the kinds of things that would happen with people abusing that data coming through, ’cause they didn’t think about all the nefarious things that would happen in the affiliate world and all that kinda stuff. So by releasing all this amazing functionality, which has created, arguably, well, not arguably, the world’s number one targeting system. World class. Nobody can argue that. Because they’ve created all of this massive power and all this sort of buffet of options. I like eating at the Wynn Buffet when I’m in Vegas because there’s all these options. Some people say that Caesars is better. You can argue with that. But the fact that there’s all these options, A, creates overwhelm. B, it creates media opportunities for people that want to say, “You know what? I can target all the people by job title where they say KKK leader.” But that’s not actually their job title, ’cause people can say whatever they want. They can say that they’re married. They can say whatever they want on Facebook. So what Facebook’s doing is they’re moving away from, “Here, let’s just trust the community. Let me give you all these different things.” And they’re pulling most of it back. And so you see a lot of people that are freaking out, and they kind of have to because of things like GDPR, because you could find … Just think about all the millions of different things that you could target off of, how any one person … For example, there’s an article, I think it was in the New York Times yesterday on how you could … If you were a landlord and you were renting out apartments or something, you could basically target black people, or target white people and exclude black people and handicap people. Cause you could exclude all the people that have a disability that are members of the union of people who are handicapped. Or there’s all these different groups. You could exclude people that like the NAACP, which is probably gonna be black people. So they’re suing Facebook by saying, “Well … ” Just because someone could do this kind of targeting, how can Facebook possibly police all of this stuff? They can’t. So Facebook’s pulling most of that stuff back. Because they don’t want the government to come in and regulate. I think it’s too late. The government’s gonna come in and regulate because they can’t not do anything, if you know what I mean. So they’re gonna have to do something. So Facebook’s trying to say, “Well, if we preempt them by just self-regulating, like pulling back some of these targets, maybe they won’t slap us quite as hard.” Kind of like the cigarette industry where they said, “Well, don’t regulate us, and then we just promise not to run ads on TV.” Things like that. Like maybe we can get ahead of the regulation, because if we do it now, it’ll be better than if they come in and try to say, “All right, well, Facebook we have to break into three different companies.” Or nonsense like that. Garrett Holmes: Right, right. Dennis Yu: Now, from our standpoint as marketers and advertisers, we’re trying to drive sales of our products. This is what you need to know. Most of these things don’t matter. It’s noise. The stuff about data and Cambridge Analytica using data from some third party app. They couldn’t use that. All of us who are data people know that that wasn’t possible because all custom audiences were based on app-scoped IDs meaning only that app itself could have used that data as custom audiences. No one else could. But the media doesn’t know, and actually, most people who are marketers, they don’t know that’s the case. So there was no privacy breach. I’m gonna defend Facebook on national TV in two days talking about this on CNN. I’m flying to Atlanta tomorrow to talk about this. I don’t even care about that. That’s all a red herring. That’s just politicians and the media trying to make a story out of what they want to believe as opposed to what the actual facts are. The fact is if you’re trying to drive sales, what you need to lean on is oCPM. That’s really where the AI and the algorithm power is. Where if you set a good audience, not super, super tight, but a general audience, that with enough room for Facebook’s algorithm to kind of figure out how to sub-target, the system does the work for you. That’s the power of Facebook’s algorithm. It’s not us setting all these targets. It’s us putting in the ingredients into the machine. We have to put in the ingredients are goals, content, and targeting, our three by three grid, our custom audiences. We’re putting all of these things into the machine, closing the lid, pressing the button for the thing that we want. So I like to hang out at the Admiral’s club. You ever go to the Admiral’s club like at airports? Garrett Holmes: Yep. Yep. Dennis Yu: I’m gonna hang out there tomorrow. I like to go to the airport a little bit early, ’cause I can eat their food. Garrett Holmes: Yeah, I do the same thing. Dennis Yu: But the Admiral’s Club, my favorite thing there is they have this coffee machine. But they have a really fancy coffee machine, and when you press the hot chocolate button, the thing whirs up and it’s not just using powder stuff, but it actually puts in real cream, and it’s the best hot chocolate I’ve ever had of any of these other places. ‘Cause it’s not just some crappy powder stuff. Something they do is really, really good, and I think of Facebook as like that, where you put your cup under the thing and you press. Do you want a latte? Do you want a hot chocolate? Do you want an espresso? Do you want whatever? And if you put the things into the machine and you press the button for what you want, the machine is doing the work for you. So we think about the fact that Facebook’s taking away a lot of these targets really doesn’t matter because most people who think they’re all smart about targeting are really just screwing things up and making it harder. They should let Facebook do the work. It’s like trying to beat the computer at chess. The computer will kick your ass at chess. The computer will kick your ass now at Go and World of Warcraft and all these things that people didn’t believe the computer could win at. And that’s how Facebook is. Their system is so smart. You literally have to … The main reason why people fail on Facebook is they do not have their content organized into that three by three grid, the funnel. The awareness to engagement to conversion, and sequencing from awareness to engagement, and sequencing from engagement to conversion. That’s the thing that we’ve been preaching for a long time. And now, because of all this nonsense that’s occurring with Facebook, we have all the more reason to finally get back to these fundamentals. Why? Because if you don’t, you’re gonna get penalized. Garrett Holmes: Wow. Very, very well put. I had a bunch more questions, but you answered everything, everything on the list. And to kind of wrap this up, one of the things that I was gonna ask is, “Should we panic as marketers?” And it sounds like the answer is absolutely not. Dennis Yu: No. Because why would Facebook intentionally hurt the machine that drives revenue? Now, some people are gonna get hurt along the way, and those are bad actors. But how many of us here were really using job title targeting? And what percent of Facebook’s revenue do you really think job title targeting and partner targeting was? Maybe 3% or 4% in total of all that micro-targeting? Just because you can target teachers that live in Santa Monica and are 35 years old, just because you could do that, what percent of all ad spend, of every dollar that’s being spent, how many pennies do you think is being used toward stuff like that? Maybe a penny. So from Facebook’s earning standpoint, it doesn’t really matter. So they get to get most of this huge PR nightmare, government regulation, privacy data breaching stuff off their shoulders by just removing that. It doesn’t hurt the revenue, and it gets rid of a lot of this outrage. And frankly, it’s gonna reduce a ton of people that are submitting crappy ads that are only gonna spend five cents anyway. There’s hundreds of thousands of ads per day, maybe even a million ads per day that are coming through Facebook’s system, and the majority of them are micro target ads that are gonna spend nothing. So should that even go through review? That’s why Facebook has minimums. The reason why … Okay, well, if it’s a boosted post, then you can spend a dollar a day, which is why we talk about a dollar a day, but if you’re trying to drive to a website for conversion, you’ve got to spend five dollars a day. Who knows. Maybe they’ll increase that to ten dollars a day. ‘Cause back in the days when I ran analytics at Yahoo, we said, “Well, why are we gonna have this minimum ten cents bid? Why don’t we just allow there to be no floor? Allow people to bid two cents, three cents, allow the market to do it?” Well, the reason why is that we didn’t want crappy ads, and we didn’t want tons of ads coming through for review, ’cause there’s a cost to try to review these ads, ’cause somebody might say something racist. Facebook has automation to detect whether there’s images or whether there’s nudity. There’s all these different things that Facebook has. But even still, you’re gonna see, they’re gonna be tighter about that. So I don’t think there’s a lot to worry about, unless you’re trying to trick the system. Garrett Holmes: Gotcha. Gotcha. Well, it’s good news to hear. In a world where the news is kind of blowing this up and making us kind of all kinda look to each other and go, “What’s next? What’s happening here?” This is a little bit of a relief to kind of hear that this is not as big of a deal for us as marketers as the media’s kind of making it out to be. So I really, really appreciate you taking the time to sit down and explain this to us. I know I learned a lot today. We all in the room learned a lot today. So thank you so much. And as kind of a last thing, where can we learn more about you? And where can we watch what’s going on in your world? Dennis Yu: Best place is follow me on Facebook. So Google my name. Facebook my name. LinkedIn my name. Send me an email, dennis@blitzmetrics.com. I put a lot of stuff out there on Facebook, ’cause why not? If you’re talking about Facebook, you should be putting it on Facebook. Garrett Holmes: That’s right. That’s right. Awesome, Dennis. Well, thank you so much for joining us. We’ll talk to you soon, all right? Dennis Yu: Awesome. Thanks. Garrett Holmes: All right. Thank you.