State of Accounts
SOA: July 2020 w/ Annotations
Nerds! Dropping a quick update. Cheekily calling it the…
State of Accounts
First things first, the next dispatch is set to drop on 8/4 and we’ll be talking about creative. Super pumped for it! We’ll have a co-writer (she reviews more ads every month than you and I ever will) and we’ll have several creative contributors. All of whom I personally admire and believe will bring a ton of value.
In the meantime, I wanted to give an overview of what we’re seeing on our accounts.
This is in response to a # of inquiries I’ve received, relating to the July 14th outage.
I’ll try to continue this monthly, just to add a little more transparency to the community, as well as, provide some insights as to how I’m “game-planning” for the future. I believe it also gives you a glimpse into my headspace (which may be creepy or valuable…). Of course, the main dispatches will continue alongside this.
Overall, we were ahead of projections, and for that, I’m extremely fucking thankful. We work with some truly badass brands with amazing products and I believe it’s a core reason why we are not experiencing drastic changes (month-to-month). Of course, I attribute the remainder of that success to my team. Yes, it’s okay to share gratitude and celebrate wins right now ;)
We will ultimately take July as another win in this crazy ride of a year, but you can clearly see the impact.
For the difference from July 1st to July 15th (added a 24-hour buffer), and July 16th to July 29th, we saw the following:
Spend: -4.46% (without changing)
Revenue: -9.76%
ROAS: -5.56%
CPM: +8.86%
The spend drop was our first concern but it did not result in any noticeable losses and we were still above ROAS targets on all accounts, so we kept it as is. Although, Facebook decided not to take it. This was interesting, considering that during previous outages, the spend was gobbled up. I believe that lends itself perfectly to the idea that this was in-fact a single instance outage (not lingering like the others).
Our recovery came about a week after the outage. This is typical, although, the last outage saw buyers recovering at the two-week mark.
CPMs continue to trend upwards as we close out the month. We’re projecting a further 2% increase for CPMs in our accounts for the first two weeks of August.
Why?
A lot of speculation has gone into why the sudden changes. Outside of the outage(s), there’s a strong possibility that consumers are waiting to get paid. Then there’s the historical data that shows July is one of our slower, if not the slowest months.
Especially the last 3 weeks of July (into the first 2 weeks of August)…
With that, I’ll add an opinion of mine, for whatever it’s worth.
We’re seeing a drastic increase in new brands and businesses created out of the pandemic, and you have to infer that the majority of them are just now starting to advertise, as they have spent the beginning of the month (or previous months) building.
Again, that’s just my opinion but this graph does lend some context to that.
In the last 4 weeks, there have been over 450,000 new business applications filed in the US alone. That is more than double the typical volume from the last 15 years. I think it would be naive to say that this has not somehow effected the world of Facebook Ads.
To back up this opinion further, we can look at Facebook’s Q2 earnings - Up 11%.
Revenue: $18.69 billion vs. $17.31 billion expected and $16.89 billion Y/Y
Earnings per share: $1.80 vs. $1.39 expected and 91 cents Y/Y
Monthly active users (MAUs): 2.7 billion vs. 2.63 billion expected and 2.41 billion Y/Y
Daily active users (DAUs): 1.79 billion vs. 1.74 billion expected and 1.59 billion Y/Y
Remember, the behemoth that is Facebook has extensive reach and is quick to feel shifts in ad spending, particularly among small businesses (ie. the majority of you and/or your clients).
On top of that, now is the exact time that I’d expect the $100 million in Facebook grant money from 30,000 small businesses, to enter.
Which… Is just all my opinion 🤓
And, finally, our revenues are trending down, as is ROAS (sad face).
So, what’s the game plan?
While we’re beginning to work with new creative partners so that we can shift/scale creative at a higher, more effective rate, we’ll look to maintain roughly the same level of spend in August, with only two of our partners increasing (for a few flash sales).
August has been internally dubbed, the month to “Sit and Stabilize”. Barring any further outages from Facebook, we are projecting to have a stable month that we will use to get back to our targets (and sanity levels).
We typically do not utilize an entire month for stability but with the recent outages, rising CPMs, and ideas behind the competitive landscape, we decided it was necessary (of course, consulting with clients throughout).
No scaling, no large sales. We’re aiming for consistency.
I strongly believe that the stability will be crucial as we move into the holiday season and begin to ramp up for our BFCM prospecting in mid-late September. Yes, we’re starting early on 90% of accounts.
That reserved spend will come in handy.
Now, I know this may be easier said than done for some of you, but set aside some time to look into your own data and start thinking about how you’ll tackle next month, as it relates to the upcoming season.
To close, I have seen fellow agency owners and buyer accounts over the past few days, and can clearly see that some were impacted more than others with the outage. That fact is not lost on me and I’m still ideating as to why that may be (outside of what I mentioned earlier). And, if you’re experiencing the same, I’d strongly encourage you to compare your data to last year’s data, more importantly, a month-over-month.
For me, there’s not enough variance in our data to say that something is wrong on the platform side.
I’m looking forward to the dispatch drop on 8/4!
As always, let me know if you have questions or if I can help in any way. I’m at the point in my life where giving back, knowledge and time-wise, is providing me with some of the greatest opportunities, connections, and personal joy.
I mentioned this on Twitter yesterday.
Until next time.
Cheers,
Jake the Ad Nerd🤙