Digital advertising platforms like Meta (formerly Facebook) have long been a cornerstone for marketers, DTC brands, and restaurants looking to reach targeted audiences with precision and impact. However, recent trends indicate a shift in the effectiveness of Meta ads, posing challenges for organizations looking to maximize their advertising and customer acquisition strategies.
This blog will uncover why Meta ads may be underperforming and how businesses can leverage data to overcome these obstacles.
The Evolution of Meta
From simply a way of connecting with people to transforming into the largest social network of all time, Meta quickly made its mark in the digital world. As the parent company of Facebook, Instagram, Threads, and WhatsApp, Meta has seemingly taken over the digital landscape. Its reach is also expanding drastically; more than 77% of Internet users—roughly 3.59 billion people—utilize at least one Meta platform, making it the digital advertising platform of choice for many brands.
But the winds have shifted. Marketers across the DTC industry are experiencing persistent issues with Meta’s advertising platform, including increasing volatility in ad placements, higher CPMS, and lower conversion rates.
The graphic above compares Meta ad performance for DTC brands from 2023 to 2024. In 2024, brands are experiencing a 12% decrease in click-through rates, 12.5% increase in cost-per-click, and a $3 increase in cost-per-acquisition. Conversion rates have also fallen, seeing a 10% decrease since 2023. With costs increasing and performance steadily declining, brands will likely need to reevaluate their digital advertising and customer acquisition strategies.
5 Reasons The Metaverse Is In Trouble
Many brands are seeing a decline in performance with traditional channels like Meta Ads, causing them to reconsider their growth strategies and customer acquisition methods. Here are 5 key challenges impacting the success of the Metaverse:
1. Saturation and ad fatigue
One of the primary reasons for the decline in Meta ad performance is audience saturation. As more businesses utilize digital platforms to advertise, the sheer volume of ads can lead to audience fatigue. Individuals go on social platforms to connect, and when social media feeds become littered with advertisements, users lose trust in both the platform and the brand itself.
Users are constantly bombarded with sponsored content, causing ads to fade into the background of social media feeds rather than capturing attention. This over-saturation dilutes the performance of individual ads, reducing click-through rates (CTR) and engagement metrics.
2. Changes in user behavior and platform algorithms
User behavior on social media platforms is constantly evolving. Shifts in how people consume content, interact with ads, and prioritize their online activities impact the effectiveness of advertising strategies.
Platforms like Meta also frequently update their algorithms, altering how content (including ads) is prioritized and displayed to users. Every week, there seems to be a new update that requires brands to shift their entire acquisition strategy—and that’s just not sustainable. These algorithm changes can significantly impact ad reach, visibility, and engagement, making it challenging for marketers to predict and maintain consistent performance.
3. Rising costs of advertising
Costs are skyrocketing in every facet of our lives, and advertising is not immune. The increasing cost of advertising directly relates to the decline of Meta ad performance. As the graphic above explains, the cost-per-click (CPC) and cost-per-acquisition (CPA) have increased more than 12% year over year as demand for ad space grows and competition intensifies. For brands with limited advertising budgets or small teams, this dramatic cost increase can restrict the reach and frequency of ad campaigns, diminishing their overall effectiveness.
4. Privacy laws
Privacy laws imposed by Apple’s iOS updates significantly impact the success of digital marketing and advertising with Meta. Before Apple’s iOS privacy changes, brands could track user activity without permission. Now, users must manually opt in and agree to be tracked.
This is a major problem for Meta advertising. With fewer users opting into tracking, the data available for ad targeting remains unchanged, so brands can’t produce personalized and effective ads.
5. Competitive landscape
Despite Meta owning some of the biggest digital companies in the industry—namely Facebook and Instagram—there is a dark horse quickly rising the ranks: TikTok. TikTok has over 1.5 billion monthly active users and was the most downloaded app in December of last year. As the most engaging social media platform, there are massive advertising opportunities for brands on TikTok, driving brands away from Meta tools.
DTC brands and restaurant groups are now widening their marketing channels and adjusting acquisition strategies to meet targets and increase profits.
Navigating Meta Challenges With Data-Driven Strategies
There are challenges to overcome, but all is not lost with Meta advertising. In the face of these obstacles, brands can utilize data to optimize their Meta advertising strategies and achieve better outcomes. But the key is to use the right data. Here are 5 data-driven strategies you can implement today:
1. Tap into audience insights and segmentation
Understanding your target audience, where they are most active, and what content resonates with them allows brands to create more personalized and compelling ad campaigns. You need to know your audience like the back of your hand. Their likes and dislikes, goals, and thought processes should be the pillars of your advertising strategy.
2. Install a CAPI connector
A conversions API (CAPI) is a marketing enablement tool that helps brands track and optimize their advertising campaigns by improving data accuracy and reducing overall data loss. With this tool, brands can track user behavior, even if the user has turned off third-party data cookies, and extract more relevant data from ads.
For DTC brands, Facebook’s CAPI is critical for optimizing ad performance. By accurately tracking conversions and tapping into the customer journey, brands can adjust their strategy accordingly, whether adjusting the overall advertising budget or swapping out creative.
3. Monitor performance and optimize when needed
Brands and customer acquisition teams must continuously monitor ad performance to identify recurring trends and track key performance indicators such as CTR, conversion rates, and return on ad spend (ROAS). Consistency is key here if you want your Meta ad strategy to thrive.
4. Overhaul your creative
If your ads aren’t performing well, it may be time to analyze your ad creative. Consider your CTR, conversion rate, and thumb-stop rate when evaluating your creative to uncover the areas that aren’t resonating with your audience.
There are a few critical factors of a ‘good’ ad:
- Call to action (CTA): All ads need to encourage a user to take a very specific action. If the CTA is unclear, the user will likely not want to investigate further. Confusion will always deter consumers from purchasing a product or service.
- Compelling headline: You only have a few words to capture a user\’s attention, so make it count.
- Storytelling: A well-designed ad shows how your product or service can solve a consumer\’s problem in a memorable way.
- Creativity: A creative, one-of-a-kind ad will stop a user in their tracks. If your creative is too similar to that of your competitors, it will all blend together, and the user will likely keep scrolling.
Brands can further understand which parts of the ad creative are working and which parts are not by A/B testing. Experiment with different ad formats, messaging variations, and audience segments to identify which strategies yield the best results.
5. Stay vigilant and adapt to platform changes
To thrive with Meta advertising, you need to understand how it works. Facebook is a machine-learning platform that prioritizes user experience and ad delivery optimization, so those elements should be the foundation of your Meta ad strategy.
Your organization and Facebook have a lot more in common than you think. You both want to showcase high-converting ads that customers find interesting and relevant to them, so your customer acquisition strategy should focus on enhancing the overall customer experience.
Gifting: The Missing Piece to Your Customer Acquisition Strategy
Meta advertising can be an excellent addition to any customer acquisition strategy, but centering an entire growth plan around one channel limits your organization\’s potential. Instead of pushing more ads, what if you gave your customers a gift? It’s possible with Nift.
Nift is an alternative growth channel that helps consumers and brands discover each other by integrating direct-to-consumer (DTC) products and services as a ‘thank you’ gift within consumer apps. Instead of ads, the products and services offered on Nift are personalized gifts shown to customers ready to purchase. With Nift, brands can:
- Utilize first-party data to grow your database.
- Break through the noise and reach new audiences beyond traditional digital platforms.
- Optimize your marketing mix by integrating Nift alongside existing channels like Meta Ads.
- Drive long-term value by building positive brand relationships with new customers.
- Spend more time focusing on other growth efforts. Because Nift is a 100% managed service, you don’t have to stress about constantly updating your creative or implementing new optimization strategies.
Join brands like Wine Insiders, who increased customer acquisition by 151% with Nift, reaching a new audience segment previously untapped by Meta Ads. Learn more about Nift and schedule a demo with our team today.
About the Author
Cynthia LaRue is the Vice President of Marketing at Nift, where she develops an integrated sales and marketing growth strategy to elevate the Nift brand, foster customer awareness, and drive brand preference across various marketing channels.
Cynthia’s passion lies in leveraging digital platforms to connect with customers innovatively, driving demand for Nift. Collaborating closely with the Sales Team, she spearheads efforts to transform capabilities and stay ahead in the ever-evolving e-commerce industry. Her commitment to fostering diverse and engaged teams is at the core of her approach.
Throughout her career, Cynthia has navigated both scrappy startups and global enterprises. Before joining Nift, she served as the Head of Marketing for ShipStation. Her impressive track record includes pivotal roles at Fortune 500 organizations such as The Home Depot and Mars, where she focused on digital e-commerce and held P&L responsibilities for the M&M’s brand.
Outside of work, Cynthia resides in the greater Houston, TX, area with her husband. She indulges her creativity by designing jewelry, exploring hiking trails, kayaking, swimming, and writing. Cynthia holds a dual degree in management and an MBA from Belhaven University, where she graduated Summa Cum Laude.
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