When we audit prospective new client accounts, I always look for tell-tale signs that they might have an incrementality problem. I look for the following characteristics:
If an ad account fits all of the above criteria, EVERY SINGLE TIME we've run an incrementality test the results have been devastating (in my mind, devastating means the incremental CAC is 5-10x the pixel reported CAC).
I wanted to better quantify my last criteria about view-through conversions accounting for a "large chunk" of attributed conversions, so I pulled purchase conversion data for prospecting campaigns from the month of February for 10 US, D2C brands using 1-day view, 1-day click, 7-day click, and 28-day click attribution windows (note: I looked at February so that I'd have the benefit of using a fully baked 28-day post click attribution window). This is what the purchase counts look like side-by-side:
These days, most brands are using the new default attribution window of 7-day click + 1-day view. With that in mind, I calculated default Purchases by adding the 1-day view + 7-day click numbers. Finally, to establish my benchmark I calculated the percentage of attributed purchases using the default attribution window that are view-through conversions. This is what that data looks like:
So for example, Brand 8's prospecting campaigns drove 764 conversions when measured using the default 7-day click + 1-day view attribution window. Of those 764 conversions, ~75% were 1-day view conversions. This is a really great example as we had the opportunity to run an incrementality test on those same prospecting campaigns and found that the pixel reported CAC was ~$150 during the test but the incremental CAC was $1,000+!
My prescription: if your ad account fits the criteria I described above and view-through conversions are at 40%+ of default conversions you ought to run an incrementality test ASAP. In those instances, I'd bet heavily that your real, incremental CAC from prospecting is at least 5x+ what the pixel is reporting.
PS: I don't mean to suggest that view-through conversions are implicitly bad or not accretive. In many instances, we've seen view-through conversions be very much validated by incrementality testing.
If detailed targeting is used to "guide" ad delivery, how far off is the DTC equivalent of Facebook's Automated App Ads?
The second post in our paid search account audit series in which we take a look at search keyword match type distributions.
When managing subscription-only ad campaigns on Facebook, return on ad spend becomes nearly meaningless. Profitability rarely ever happens after the first purchase but typically comes from a user’s lifetime value as they submit recurring payments months into the future.