Why You Should Be Testing Meta’s Shops Ads
Have you recently noticed this option in the destination field at the ad level when creating new conversion ads in your account?
If so, it means you have your Shopify site integrated with the Facebook Sales Channel App and have properly connected Facebook shops/IG checkout to your e-comm store. This grants you access to this exciting new feature.
Meta tells us that this is not a full roll-out at this time (summer/fall 2022) and is supposedly still in a Beta test, but we note that on all of the accounts we reviewed that were correctly setup with Facebook Shops, we did see that we had the option available within the ad account.
What is it exactly?
Basically, what you are choosing to do is allow Meta to send traffic to your Facebook Shop or through IG checkout over your website, when they think that a unique user is more likely to convert on one of their platforms over the e-comm store. The neat thing as you can see is that you can even customize that experience and drive users to the product PDP within your on platform shops.
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Why is this good for advertisers in general?
Let’s start here: Apple has single-handedly turned the digital advertising space on its head since the release of iOS14. Because of this, we know that this has had a massive effect on Facebook’s ability to follow user actions across the web and off their branded platforms, which has hurt their ability to get the right ad in front of the right user at the right time. However, by moving the purchase event on platform through Shops/IG Checkout, Meta is now able to leverage that buying data once again as first-party data, as well as is able to cross-reference that data with relevant interests and the content those users are engaging with on platform. Additionally, when a purchase or action is taken through Shops, advertisers are able to see that data in real time, no longer needing to wait for delayed attribution.
Knowing this information, we created a handful of tests to see what would happen if we gave Meta the option to choose where to send our traffic and if it could perform better than our top performing audience in the account.
In both A/B tests in two accounts that this was tested in, the audience was a broad audience. Creatives tested were identical, only changing where traffic would be sent and were our top-performing ads in each of the accounts. Each test ran for ~ 2 weeks as an A/B test and the brands are in the fashion/apparel and home accessories space with AOV of $200+.
Below are a few screenshots of the performance we saw:
Test Account 1
Test Account 2
Findings:
While we were hoping to see more purchases come through the actual Shops themselves, we understand that:
Meta was sending traffic to where they thought the greatest opportunity of conversion was;
Checking out on Facebook or Instagram Shops is still new for many consumers. So, while Meta may have seen an opportunity for the user to convert on their platforms, it is also likely the user still chose to checkout on the website.
That said, in both tests, the Shops destination ads brought in more conversions and in the first instance did so at a 5:1 ratio over our top performing audience set-up. While we understand that both of these are small tests, to us this shows that there may be some steady viability here.
Learnings
While we couldn’t pin this down directly, we hypothesize that initially AOVs may be lower on Shops orders given that first time purchasers are likely to spend a bit less testing out a new way to shop. We’d also add that data signals are still young here too.
Note that being able to drive more conversions overall could make up for this
We see this is a direction Meta is going to continue to pursue, so in time we could see them, like with most ad types they’ve rolled out, showing greater priority to ads that support Website & Shops over those that are just driving to shops. (IE: better CPMs for those who adopt early)
Let’s not forget about the additional audiences that this will create for targeting. For example: say those who added to cart via Shops or those who came through your shop to website. Which create new opportunities for lookalikes and audience retargeting that we might not currently be able to do with iOS opt-outs.
Meta has quietly announced that it has extended waiving the 5% fee that is associated with processing orders on their platform through December 31, 2022, meaning there will be no processing fee when a customer completes their order on Shops/IG Checkout.
Needless to say, it’s a great time to test this within your accounts and we are continuing to transition most of our accounts over to to this destination setting.