How to spot a performance dip in your ads — and how to protect your revenue

Date
May 17, 2022
Category
Analytics
Written by
Ellen Burke

When Apple rolled out its iOS 14.5 updates last April, advertising across platforms like Facebook and Google suddenly became a whole lot more volatile. Before, you could spend $20 a day on your campaigns, set your target parameters, and watch a steady stream of conversions and new customers come in. But not anymore. With less cross-app tracking and constant algorithm tweaks, that steady stream is drying up.

Your eCommerce brand now has to navigate a challenging and constantly shifting paid media environment. What works for you now isn’t guaranteed to work forever, and when you suffer a drop in performance, it costs you more than just clicks. You lose out on conversions and valuable revenue generation. But while you don’t have total control over how your ads perform, you’re not completely defenceless. You just need to know what to look for, so you can spot performance dips and correct course before you lose out on revenue.

Check for signs of weakness in your existing campaigns

Sometimes, a performance drop is out of your control. But an outdated or ineffective ad strategy can compound those “uncontrollables” even further — and that’s where eCommerce founders and marketing managers really need to be diligent.

Before you can dive into tracking ad performance, you’ll need to make sure your tracking tools are set up correctly on Facebook and Google. For Facebook, this means prioritizing your conversion events under Aggregated Event Measurement, setting up Conversions API to connect your marketing data and your ad targeting, and installing Facebook’s Pixel code on your website. For Google, you’ll need to set up conversion tracking for your ads.

1. Are you over-targeting the same audience?

Promoting your ads to the same users leads to audience fatigue. Eventually, a good portion of that audience will stop interacting with your ads, lowering conversions. They might even block your ads, meaning future ad campaigns won’t reach those users again.

Our experience suggests that seeing the same ad five, six, seven times a day can impact a customer’s impression of your brand. That can sour potential customers on you in the long term, and it’s costly even in the short term. On Facebook, ad frequency refers to the number of times each person sees your ad in their news feed. AdEspresso analyzed over 500 campaigns and found that ads with a frequency of nine had 161.7% more expensive cost-per-clicks than ads that had a frequency of one.

If you’re running multiple campaigns with the same optimization events (such as driving purchases or traffic building), you run the risk of serving the same ads to the same people. That’s something to keep in mind when deciding on campaign objectives and parameters.

2. Are you chasing keywords with low search volume?

If you’re not staying up to date with the keywords you’re targeting through paid search ads, you can also expect to see a decline in ad performance.
Search volume is one of the most important metrics you can check when setting up campaigns on Google. If a keyword has a low search volume, only a small handful of people are searching for that term. Once you’ve exhausted that audience, you’ll start to see a dip in engagement and conversions.

Sometimes, a low-volume keyword might still be the right fit if it’s directly relevant to your industry and you know your target audience will be searching for it. But generally, you want to target keywords that have a healthy amount of traffic every month, so you can maintain strong performance.

Look for drops in ad rankings, engagement, and conversions

Ads that don’t outperform the competition or entice users to click won’t attract customers to your site. The easiest way to tell if ad performance is dropping is to keep an eye on ad rankings on Facebook and click-through rates on Facebook and Google.

Facebook’s ad relevance rankings are one of the best tools for diagnosing underperforming ads. They have three measures to show how your ads compare to other ads competing for the same audience:

  • Quality: Quality ranking helps explain how your ad compares in perceived quality. It’s measured by things like people viewing or hiding the ad, sensationalized language, and engagement bait.
  • Engagement: Engagement rate ranking compares your ad’s expected engagement rate to the competition. It’s a measure of the likelihood that a person will click, react to, comment on, share, or expand your ad.
  • Conversion: Conversion rate ranking is similar to engagement rate, except it compares your ad’s expected conversion rate instead. In this case, expected conversion rate is the likelihood that a viewer will complete your campaign’s optimization goal (such as making a purchase or clicking through to your website).

Most Wayflyer customers rank average or above average in their ad relevance rankings. If your ad drops to below average in any of these rankings, it means that you’re expected to perform in the bottom 35% or worse out of all the ads competing for that audience. You won’t have a great chance of generating more traffic and sales for your business.

A declining click-through rate (CTR) is another key metric to watch for. People who lose interest in an ad will stop clicking; they’ll no longer be driven to make a purchase. When your ad ranking or CTR starts to drop, you can expect your return on ad spend (ROAS) to drop about a week later. That gives you some time to make adjustments to your campaigns and get performance back on track.

You also shouldn’t use these metrics as the sole benchmarks of success for your ads. Your campaign objectives should be focused on customer acquisition, brand awareness, and conversions — those broader goals that drive your business forward. Instead, watch these metrics to maintain healthy ad performance and spot dips before they impact your ROAS.

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Maintain a reliable revenue stream with these 4 strategies

Take action once you notice a drop in performance — especially if you think your ad setup may be due for a refresh, whether it’s your creative or audience parameters.

1. Consolidate Facebook campaigns

If you have multiple campaigns running in which you’re targeting the same people, combine them into one ad campaign.

You’ll reduce audience fatigue, so your customers won’t see your same ads multiple times a day, increasing the likelihood of engagement and lowering your CPC. This also helps combine your overall budget so you can be more competitive and gives you more buying power to win ad auctions.

2. Scale back your testing

Testing is always recommended, especially for new platforms or marketing tactics, but sometimes, testing too much can actually have a negative effect on ad performance.

That’s because the goal of testing, at least initially, isn’t to make a return. The purpose is to figure out what will resonate with your audience. When a new ad or campaign tactic is successful, you’ll get a performance boost and an immediate return. But just as often, your experiments won’t pay off. Wayflyer’s analytics team often sees brands diluting their performance when too much of their budget is devoted to testing.

If your performance drops and you’re running a lot of tests, slow those down. Instead, divert your budget toward the tactics or ads that you know are working. You’ll stabilize performance and bring ROAS back up.

3. Change up ad creative and content

If you’ve already consolidated campaigns and rolled back your testing, and metrics like CTR are still dropping, it may be a sign that your audience is tired of seeing the same messaging over and over again from your brand. This is a good signal that it’s time to switch up your ad creative.

For instance, if you’ve shown an image ad the last four or five times to your audience, you might switch it up by showing a video ad instead. You can also mix it up on Facebook with a carousel ad, try new background images, or write new ad copy to see if a new message resonates.

Another great tactic for eCommerce brands: try pulling in your product catalog on Facebook instead of using ad creative. It’s a great opportunity for you to showcase your products directly to the people who are interested in those particular items. And your product catalog can be even more influential than a well-designed ad. If a customer is interested in buying jeans, but a clothing company targets her with an ad that only shows shirts, she may not click it. If the ad pulls from their catalog and shows a pair of jeans, she’ll be that much more likely to click and make a purchase.

4. Leverage email marketing for stability throughout platform changes

As paid media platforms grow more volatile, you can’t rely on stable performance and conversions over time. Instead, grow your email list and build your own audience base so you can draw from a steadier stream of revenue. Use pop-up CTAs to hook site visitors to sign up and keep them engaged with monthly newsletter offerings. Product tips, videos, recipes, and hacks make for great email content.

Uncover broader performance trends with analytics tools

To truly maximize ROAS in a volatile paid media market, you need access to a broader swath of insights — and a partner to help you act on them. It’s great if you can understand performance trends for your own ads. But your campaigns will almost certainly be affected by shifts in your customers’ behavior, your industry, and eCommerce as a whole.

Business that have received funding from Wayflyer have access to our performance analytics to learn about key industry trends and optimize your campaigns. You’ll get unbiased recommendations based on our sweeping knowledge of eCommerce trends and our detailed data insights. Our only goal is to see you succeed.

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Written by
Ellen Burke
Ellen Burke is Wayflyer's Performance Marketing Manager.

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