#79 Your True ROAS in a Cookieless World
Have you noticed Facebook ads attribution to be a little off lately? It's not you, and it's likely not your ads either. Things are changing, and cookies may be on the way out. But it's all not doom and gloom! We have to be smarter and get a little old school with our reporting. In this episode, I'll talk about what's new and how to see a full scope of your ad paid ad performance concerning your business.
It's the Ultimate Marketer podcast. Welcome back to the Ultimate Marketer podcast. I'm your host, Orlando Rios. Thanks for joining me here today on the show. Before we get started, I want to remind you that you can go to dropkickads.com and save 10% on any of our creative services. That includes things like Facebook ad copy, Google copy, Facebook ad images, targeting, a whole lot more. Use promo code "ultimate" and save 10%.
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Now, today, we're going to talk about the end of cookie-tracking. It's kind of going away, isn't it? With Apple's iOS 14 update, which really took effect back in February, I'm sure you're starting to see some effects in some of your campaigns. I have some clients that are still doing really, really well, I don't notice any effect, but on some other accounts, no doubt about it, I'm really seeing some degradation in some of the campaigns that were doing so well.
Now, people might be saying, "Well, Facebook Ads is over. This is done. Cookie-tracking is on the way out," but I still don't believe that's the case, and so one of the big things that might be impacting the results that you're seeing in Facebook Ads is actually related to the time that it takes for a conversion to register and the attribution settings. If you look back at your campaigns from February and before, you'll notice that things like the attribution setting, which Facebook sets as how long are you giving it the credit for taking a click and turning it into a conversion.
Before, it was at 28 days, so if I had a campaign and somebody clicked on that ad and then converted 15, 20 days later, guess what? It gets attributed that sale because it deserves it, rightfully so. If they saw the ad, they clicked it, and it just took them some time to finally pull the trigger, they ended up buying, they had got on your email list or something down the line, they ended up finally buying, your ad definitely influenced that purchase.
Well, now, since around February or so, if you look in your account under the attribution settings, that's now down to seven, so you're losing a lot of days there in attribution settings, and rightfully, it's going to impact things, so you have to take that and consider, "What kind of product do I have?" I'm talking specifically to e-commerce people right now in terms of leads. I don't think it's going to be that big of a deal filling out a form to become a lead or whatever it is. Entering an email is a lot easier than getting somebody to purchase, so I'm talking particularly to those in e-commerce right now, but you need to think: What kind of product do I have and what's the price point of my product? If the price point of my product is higher, more than likely, my customer's time to purchase is going to be longer because they need more time to figure out whether or not they want to buy the product.
If you're doing things like apparel where people can see a cool-looking shirt and then decide, "Oh, hey, I want that," within a seven-day period of time, pull the trigger because they only cost 20, 30 bucks or so, you're more likely to get a purchase there within a seven-day period of time, seven-day attribution window. Things like that, I think, are going to be really, really fine in terms of the way the new tracking is going as it is right now, post-iOS 14, but pre the end of cookie-tracking.
If you have products that are hundreds of dollars or thousands of dollars, that seven-day attribution might be impacted and weird there, so you may have campaigns running, you may not see conversions happening right away as you're used to. Then you turn off the campaigns that were doing well and you can't ever get anything off the ground because you're not working with data correctly. I understand if you start a campaign and you don't see any conversion for two or three days, you're kind of like, "Well," especially if you're spending a couple of hundred bucks a day, you're kind of like, "I don't know if this is working. Should I turn it back?" But I think even as before, where we had to be super, super patient with our campaigns, we're going to have to be even more patient now. You may have to go five days without seeing a single conversion on a campaign before making a decision. That's scary. That is scary AF because you're gambling, and I guess ads in a sense is just educated gambling anyway, but more so now.
The other thing I've noticed is that say you're looking at a campaign for the previous week and you look at the results, so if you go to your Facebook ad account, you go to the ads manager, you look at the previous week's performance a day or two after that week is complete and you see that performance, what you see then is going to be different than what you see two weeks from that point, so if two weeks later you go back and look at that same week, I almost can guarantee you that you're going to see more conversions on that campaign than you did looking at it a couple of days after the week is complete.
Why that's happening, I don't know. I don't have a real explanation for that, but I'm noticing that happening as I look at past campaigns, February, March, as I'm trying to figure some stuff out as well in some of our campaigns that we run and I'm like, "Well, why did I turn that off? It was doing okay," so it seems to me that a lot of stats are being super delayed as well. What this should tell you is that you have to take what the Facebook ad manager is telling you while you're in the thick of it with a grain of salt because it's not telling you the true story the day that you look at it for the day that it's having attribution, or even in some cases, two weeks later after for a particular set of days that you're looking at in terms of reporting, so it's really, really hard now to make day-to-day decisions. You need to think more along the lines of weekly decisions maybe, or maybe even bi-weekly decisions depending on your product and the average time to purchase.
If you have Google Analytics and you have e-commerce enabled, there is a report you can see in Google Analytics, if you go to the conversions and then e-commerce under there, as long as you have e-commerce enabled with your Google Analytics, you should see something called time to purchase that will tell you roughly how long it takes somebody to make a purchase once they visit your site for the first time. Is it one day? Is it 15 days? Is it 30 days? What is it? That should give you a good example. All that considered, all those things considered, you need to really think outside the box there of what you would really normally look at in terms of the ad manager platform and the data that you get there in terms of making your decisions.
What can we do as things continue to change? I do think that in the near future, cookies may go away completely. Now, I don't think that means it's the end of anything because Facebook, Google, whatever it is, they will find a way to track conversions and track actions on a site. They will find a way to do that, we just don't know what that way is going to be right now, but there's a way that you can really understand the data that has been available the whole time that a lot of people, including me, have gotten away from over the years because the tracking on the platforms have been so decent. It's been good enough. But in reality, we should have been doing it the old-school way, continue to do it the old-school way from the beginning.
There's so many conversions and things that happened from Facebook ads and Google ads that don't get tracked. Even when tracking was at its best, it still was not a hundred percent because it's not as always simple as click an ad, buy a product. A lot of people see ads, they don't act on them. They don't click on them, they go search in Google, or they just put in the URL for the domain themselves in a browser. There's multiple different ways a purchase can happen outside of just the click Buy. Those, a lot of times, are missed. Think what one big purchase can do to a return on ad spend. It can really jump that up.
What I'm getting at here is that it might be time to actually go back to spreadsheets. Sounds terrible, right? It sounds awful. I hate spreadsheets. I don't like to do them, but it might be time to do that. It might be time to start tracking info on our own and compare it to the solid info that we have. What I'm talking about is taking a full look at your business, and I've said this a couple of times on the podcast, outside of just the ads manager, where you look at periods of time, maybe a week, bi-weekly, a month, whatever works for you, I wouldn't do it daily, where you log the amount of sales you had, the amount of revenue you made with the stats that you get from your e-commerce platform, like Shopify, WooCommerce, whatever it is. Then you compare it with the amount spent on ads on Facebook, or Google, whatever. The purchases are reported there, the return on ad spend reported there, the purchase value reported there, and you compare those things.
Then what you can do also is that a couple of weeks later, you can go back and update data, because remember how I talked about earlier in the show that I've seen instances where two weeks later, the data for a week looks different because it attributed the sale? You can go back and update that data. Maybe you have another line that's called Look Back where you update that data so you get an understanding of the differences in reporting from week to two weeks later on a specific week. Sounds complicated, I know, but this is where we're at.
You can also make graphs from that data that you can compare. You can compare things and see if you notice any trends, especially in terms when it comes to ad spend and traffic versus purchases on your site and traffic on your site and see how they correlate. When you increase ad spend, is more traffic getting to your website? When you increase ad spend, are purchases going up on your website, whether or not Facebook is telling you that a conversion happened? Those are ways that we can get around that tracking stuff and really understand how the money we spend on ads is affecting our business health overall. It's tedious, but if you're dealing with a lot of ad spend, or you're really strict on your ad budgets, it's definitely worth it.
I've started doing this for my account and for my client accounts as well to make sure that I understand what is actually going on. With that, I built a spreadsheet where I call it a true ROAS, a true return on ad spend spreadsheet, and in that spreadsheet, for every single week, I log the amount spent on ads, the reported Facebook conversions, the reported conversion value, and then I also log the store-reported sales, the store-reported traffic, and I create what I call the true return on ad spend, which in reality, it's going to be higher. Obviously, not all the ad spend is what is driving all revenue but it'll give you a picture and then you create a baseline of what you're comfortable with for that in which you try to stay over.
I also created a field, it's a calculated field for a ad spend profit margin, so if I know I spend X amount on ads in a week and I make X amount of revenue reported from the store, what percentage of revenue am I spending on ads? Is it 10%? Is it 20%? Where am I comfortable? That way, I know if I keep increasing ad spend and that profit margin stays the same, so if I know that I'm comfortable with spending 20% or 10% of all my revenue, putting it back into ads, and as long as it stays that way, I'm fine with it. That means if it stays the same over time and I keep increasing the ad spend and I get more sales and that profit margin stays the same, that tells me that I'm doing something right, no matter what Facebook Ads' reporting has to say about it.
I hope you get what I'm trying to say here. I understand without seeing this in front of your face and trying to listen to it here on the podcast, it may be kind of hard to grasp it. I hope you're understanding the thought process here because it's really going to help your decision-making. If you have clients, I know a lot of people who listen to this show are agency owners that have clients, this is something that you're going to maybe want to consider, too, as an extra layer of reporting to show how ad spend is really affecting things in the grand scheme of things no matter what the platform has have to say because tracking is not perfect.
With that, I actually made this spreadsheet and I'm making it available to everybody to download. You can get this at dropkickads dot com slash true, T-R-U-E, ROAS, R-O-A-S, dropkickads.com/trueroas. You're going to have to put your email address in there so that way I can market to you, but then you'll get an email to download this spreadsheet, which it's an Excel spreadsheet, but you can use it in Excel, I've tested it in Google Sheets. It works there, it works in Apple Numbers. You can open it in any of those you want and then you can just alter it and copy in the fields and all that stuff to build this out. It's already built out for you as graphs, already everything, and there's an explainer video on that page that I show you how to use the spreadsheet and give you some ideas on how to interpret the spreadsheet.
I feel like I'm going back in time a little bit here talking about spreadsheets for tracking ads and stuff, but this is where we're at because things are not the same as they were. I think we all got maybe, well, maybe not everybody, but I think some of us got a little lazy with our tracking because Facebook Ads' tracking was generally good, generally decent. That's probably changing a little bit, especially now with that seven-day attribution and if you have a product that is not a see-and-purchase within the first seven days. Depending on what it is, then you're going to have to take a step back a little bit.
On that note, too, if you have a really expensive product and it's not one of those things that people can see and decide to buy within a seven-day period of time, you might want to take your conversion optimization a step back. Maybe it's not purchases. Maybe it's add to carts, maybe it's view content. Maybe you're focused more on just your landing page trap depending what it is and then you put remarketing on the seven-day period post seeing the product, so things to consider. There's always going to be things to consider in the game of ad-buying, the game of digital marketing and paid social and paid ads. That's not going away, but we can try to be smarter. We can try to really take a full look. I think the key in all of this is the P-word: patience. We're going to have to be more patient with data because it's not coming in as fast as we once knew it to be. A lot of things to think about in finding your ads' true impact on your business.
That's it today. Small episode here for you, hoping that we can further get tracking on track and really understand how things are affecting because the dashboards and cookies and all that stuff are all going to change a little bit as we go on here. It's something to really consider because driving that traffic is so important to any business. Finding new customers is so important. I really do hate that we're so reliant on things like Facebook and Google for customers, but without them, I don't see a lot of e-commerce happening. A lot of small businesses growing out of nowhere. It really helps boost and get you going outside of the organic spectrum, so we'll do what we can with it. We'll adapt and we will prosper and do well.
Again, make sure to check out that spreadsheet I built. You can get it at dropkickads.com/trueroas. You can download it there. You'll have to enter your email address so that way I can market to you and that way I can send you emails about Dropkick Ads products, our blogs, and everything like that. It's just part of the deal. All right, guys, thanks so much for listening. Have an awesome week, and as always, I will try to see you next week.