Facebook’s Move into AI with New Advantage+

[00:00:00] Richard: Welcome to the E-Commerce Playbook Podcast. I'm Richard Gaff and the senior copywriter here at Common Thread Collective and I'm joined as always and again by Mr. Taylor Holiday the CEO and managing partner of CTC. Taylor, how are you doing?

[00:00:13] Taylor: Doing awesome. 

[00:00:14] Richard: So am I. So we're gathered here today to talk about something that's been on everybody's lips over the last week and a half I would say, right?

Which is Facebook's move towards the Advantage Plus model. Now per their usual behavior, they're being pretty obscure. I think about what that means for the general public. They haven't really put any information out about what that means. That's what we're here for. We're here to break it all down for you. 

Maybe more top level, what Advantage Plus is, the ways in which it's similar let's say to Performance Max. Which is what everyone was talking about previous to this. So Taylor, I'll put it to you then. Like what is your understanding of Advantage Plus. What is it and what do we need to know about it?

[00:00:52] Taylor: So I will give you the presentation from Facebook about the point of the product, right? So they will say that Advantage Plus is a way to build campaigns with fewer inputs. So advertisers during campaign creations, they can simplify the audience options, streamline the creative management process and a couple of different optimization options for both apps and purchases.

And so it's their way of saying, hey we're making this whole thing simpler for you. We're making it easier for you to use Facebook because it's complex and hard and requires a lot for people. While I agree that is part of it, I think there is an incentive all the time to make the tool more accessible to more people.

If you think about that as a general business strategy. If you lower the barrier, the more that every, you know, mom and pop store owner has a chance to get on and be able to use the tool effectively without having to be a deep expert in the thing. They're at the point of the market saturation where they are building tools for everyone.

And that usually involves simplifying. And I think that's a big part of this, but the secondary implication is that Facebook right now has a performance problem. They have an efficiency problem. And in order to solve for that, I believe that Facebook is attempting to reduce the variables that people are creating in their tool, in an attempt to solve the problem and trying to take control of the situation in a little that allows them to make more of the decision. 

So as an example, one of the key things that's removed in Advantage Plus is audience options. So you can't any longer choose. Things like gender or age as part of Advantage Plus.

And so if you think about the sequence of events here from Facebook, it went from like interest targeting like the start of it all right, to lookalikes to the next thing. Then it was like, go broad which was functionally just Facebook saying like, and really in between there was this little checkbox on your audience that was like, wow Facebook to expand or reach more people if they think it'll work.

 And then they just said, go broad. And now Advantage Plus is like, we're just taking away the choice. You can't actually select people. We're now just going to make it so that we're removing some of those options. Because what Facebook knows in each of those behaviors is that like m arketers make these assumptions about who their product is for that is like in some cases, deeply rooted in data. 

But what none of us have in the consideration of who we want to advertise to is we don't have the buy price for the audience. So when we think about who, even if I do know who my consumer is. Okay, let's say I do know with a level of granular detail, what I don't get is a menu that shows me the price at which they're available to.

 And the reality is that every user is valuable to you at the right price. Even a person of very low likelihood to purchase at a one penny CPM would probably be profitable. So there's a point at which every user is profitable to every business. And the dynamic allocation of your budget against that available opportunity is a thing that only Facebook can see.

 So that's a little in the weeds. Does that make sense, Richard that there's like sort of a buy and sell price for the ad inventory that we're making decisions on based on demographic attributes that don't come with a corresponding price behavior. So it's really hard for us to actually make the right allocation.

[00:04:04] Richard: Yeah, no, makes perfect sense. I mean, broad phenomenon of completely missing who your product's for. But the idea maybe that like that person would maybe just sort of use your product as a fluke of some kind would still be valuable to you in some way if you could get them for the right price.

[00:04:19] Taylor: Well that's exactly it. And so, I'm even giving marketers a lot of grace here cuz my real opinion is that very few of them have any idea who they're trying to actually reach and what the value proposition is to that customer. But let's assert goodwill on all of. Them and that they all know in detail.

It'd be like, Richard, you love music. Or like you love guitars, right? Like, you know a lot about guitars, right? And if I said, Richard, you could have any of these four guitars. You could have a really clear opinion on each of them. But then let's imagine you picked one, it I was like, oh, that one's $2,000.

Do you still want it? You know? And I was like this one was 50. Is your decision the same? And it probably wouldn't be because there's a value that the difference between those guitars represent to you that isn't elastic to the point of infinity, right? There's some point at which you would choose the less good guitar because it's 1000, the price of the other one, right?

Like there's some of these thresholds and the same logic applies to ad inventory is that . We might have the ideal user and we might be able to draw a perfect profile of them. But there's a price at which that perfect user is still not profitable to us. And that's why us bidding and defining the audiences inside of a black box where we don't know the price is a bad idea.

[00:05:23] Richard: Yeah. I feel like there's sort of an irony there of, like, because purchase behavior is such a deeply human, unpredictable behavior in some ways. That's why we need a computer to do it for us. Purchase decision is intuitive. Therefore you need an intuitive marketer to sort of figure out what that would look like to get that person to buy.

When in reality it's just so, like in that situation with the two guitars, like $2,000 might feel fine. There's no real rhyme or reason to that number being correct for that. That's just the way it works. 

[00:05:52] Taylor: That's right. And that's before we even get into trying to predict the other variables in that profitable purchase which is like. What's the CTR on the ad against the price that you paid for it, against the conversion rate. All of which are these things that Facebook has models and can instantly process and decide against that you can't.

And so Advantage Plus like Performance Max and Google is just more movement away from leveraging human decision making and using machine learning and ai which is like, this marketer is like, we have to understand that these are tools to serve us. There's this general cynicism that we have for these kinds of actions as if they are somehow Facebook trying to take our money and spend it in bad ways.

 And look for the last three days, suddenly conversion values stopped reporting and all of the ROES in the ad account looked broken and like that's really frustrating to advertisers and it builds distrust in the system. And so tied up in that is it becomes like, distrust in our government where suddenly that story about the conspiracy theory is a lot more believable because sewn into the weeds is distrust.

 And so I think that's a lot of what happens around these product releases is that it's like, does Facebook really have our best interest? Are they trying to just screw us out of money? Why are they taking control away from me? I don't know that I want this to be in your control and it's like we trust ourselves in ways that probably isn't warranted over the thing that we distrust because there's been these issues that have occurred.

[00:07:15] Richard: Yeah. We kicked off this conversation talking about how the reason that Advantage pluses sort of come into being is because Facebook wants to kind of take control of their performance basically. One way you could read that is like, they're going to do something in their black box that causes it to look better than it is. Which I feel like is sort of a knee jerk reaction to it, when in fact, really what it is, is that as marketers we're so bad at using their tool, that it's making them look bad and actually they have to kind of take it back from us to make.

[00:07:41] Taylor: Yeah. And look, there are ways as an example is like the preset settings, like the default for Advantage Plus is sales, lowest cost, dynamic creative on placements, automatic bidding for conversions on a seven day click, one day view. Okay? And so that's what you're preloaded and you can adjust the optimization and we are actually making a choice right now at CTC to change the optimization, to click almost universally and eliminating view everywhere. Now while Taylor, what are you saying? You're inserting yourself manually into the process. Well, what Facebook doesn't have as an input in that scenario is my business objective and my business strategy.

 And so while generating the most sales. Attributed to Facebook on the basis of this attribution parameter. This is the best setup. If our business strategy is to generate net new customers with the highest incremental factor, or let's say even God forbid, which is reality, we have some customers that are holding us to a last click attribution .And we're gonna be hired or fired on the basis of that measure.

 Well now we might have to circumnavigate or insert ourselves into the system to produce a different outcome because this machine of Facebook is not set up to produce that business objective. And they, acknowledge that in the definition of what they're optimizing for. So, There are still moments and I can get, sort of beat up a little for being dogmatic about some of these dependencies on machine learning and saying humans suck all the time. But there are moments where you have to make decisions that the current setup or inputs don't allow for.

[00:09:06] Richard: Yeah. This is one example of it but what room is there or will there be for humans down the line? 

[00:09:12] Taylor: Yeah, I think. We have to work through that. It's a trap you fall into and creative is when you think broad audiences, you think you're building an ad for everybody.

 And I still don't think that's true at all. And we have not absolved ourself of the responsibility as marketers, as building ads that are compelling for somebody. Right. And that is still where our energy and resource. Needs to be because at this moment, at least for the next couple more months, there's not a creative solution that does that automatically.

A sort of joke is a hint to maybe one of our future episodes here about Dolly. But at this moment we still have to go out and build things that are compelling to somebody to drive the engagement, to give Facebook the feedback it needs to go find more people that are loving our ads cause we're creating amazing content that's superior to everything else that's out there.

I know it's sort of a cliche thing to say like, well that's what the human job is. But I think that is still a very primary one. The other is To be clear about the business objective and to assure that the tools are aligning towards it. And then building structures that are consistent with that objective.

And so making sure that you do have the right exclusions in place if you're going after new customers or right targeting in the right lack of exclusions if it doesn't matter. Like as a marketer, your job is to ensure that the tools are aligned with the business objective. So it requires clarity of business objective, clarity of how you're measuring that impact. And then your job is to sort of insert the creative into the tool that allows the tool to be utilized most effectively and drives towards the business outcome that you set. Cuz Facebook's not setting your business objective, they don't know your capitalization, they don't know your profit obligation at this moment, right? Those might be features later, but you still have to go do that work of setting the obligation of the outcome for the tool, 

[00:10:48] Richard: Right? So at least for the time being, it's like, becoming more like driving a car than flying the space shuttle, which is sort of what it feels like, at least to an outsider right now. 

[00:10:56] Taylor: And I think cars are such a good example. Even computers are, it's the evolution of every technology. Which is that over time they tend towards simplicity of interface and accessibility.

Right. And so if you think about, you know, like who could use a computer back in the day? Well, it's like it was in universities with like seven guys in a lab . The highest end learning center in the world. Now it's like my mother who's 70 and technologically. Not that sophisticated as on a computer every day.

 That's the ad evolution. It's like how does Facebook ad platform become more accessible to more people? And so I think that's part of what we're experiencing is a very natural progression. 

[00:11:33] Richard: Yeah. And this is just purely outta curiosity.

What visibility does Advantage Plus give you to the demographic of the people that you're sending your ads to cause I'm just thinking about like for the creative team, which I would say for this foreseeable future, who knows, maybe it's a lot sooner than I think. Are still gonna have to be able to use that data to speak to the right person. Like how is that being taken care of? 

[00:11:54] Taylor: it's a good question. My understanding is, so using Advantage Plus campaigns provides simplified reporting with no breakdowns at the campaign level for age, demographics or placement because these options are not available to change when creating your campaign.

They're also not available for reporting.

[00:12:10] Richard: Interesting. In some ways it feels like the black box gets a little, darker. 

[00:12:14] Taylor: It would be interesting to talk with Facebook about why they, choose that. It's in the same way, it's like with Performance Max. You have to like hack your way to seeing placements because in some ways, like if I could guess. And I'm again it triggers in people, like, I'll give you an example.

One of the things customers love to do, is they love to go look at the time of day that their ads get deliver. And they'll see that their best Ross is at 10:00 AM and they'll want us to run all their ads at 10:00 AM , right? And so it's like, no, no. What you have to understand is Facebook allocates your budget accordingly to the available volume at 10:00 AM.

If they could spend all the money especially when you're running cost caps like that's part of the value proposition is that Facebook's saying, I will deliver the volume at the moment when the outcome is accessible at the total available budget you give me. And so if on Tuesday your budget was a thousand and I spent 600, it's cuz 600 was available.

You can't go shift all the budget into that 10:00 AM slot. And so the reaction of the marketer tends to be, oh, Instagram stories has my highest ROAS go run just Instagram stories, campaigns. And you mistake that the key is the person, not the placement. Facebook's trying to reach the best, most InMarket ready to purchase user wherever they are, more so than they're trying to specifically reach people on IG stories.

Right? And so I think we can mistake that that's the case. And so hiding some of that could be about preventing some of that behavior. That's me hypothesizing. I appreciate it, cuz we literally get a lot of pressure around that kind of causal leap or connection from people that's like, wait our Instagram feed ROAS is way better than our Facebook newsfeed ROAS.

Can we run Instagram feed only? And inevitably that's not at all how it works and the pricing dynamics are actually completely different when you do that.

[00:13:56] Richard: Yeah. Well, as somebody who's fallen into that trap many times it does feel like them protecting us from ourselves at least a little bit. 

[00:14:02] Taylor: Yes.

[00:14:02] Richard: Although with that piece of like, the messaging of the actual, like writing what somebody is going to like. 

[00:14:08] Taylor: I got a thread getting ready to come out on Twitter about this.

And wanna attribute the author, I'll have to look it up. But there's a copywriting book and there's this great chapter in the book called A Great Headline Chooses Its Audience. And the idea is that you write an ad and a headline very quickly reveals to somebody that this is for them and it self selects into that. 

 There's a company right now that's doing some of the best advertising that I've seen on TikTok. Specifically it's sort of man on the street style interviews and it's shoes that make you two inches taller but they look like normal tennis shoes.

And all the headlines something along the lines of like, the distinction between men, six foot, and under in a women's eyes is like three rankings of hotness or something. You know, it's like, hey, have you ever wished that you were six foot like. That kind of message that so clearly makes it clear that this is a product for somebody in the five nine to five 10 range or short guys.

But they even took short guys and it wasn't specific enough. They go right after people that are just below this six foot mark like they interview women and it's like, what's the height at which you find men attractive and it's just like 20 women in a row going six foot, six foot, six one,six one.

And so it's even narrower than short guys, which would be a very specific audience. It's like this very specific thing the advertising is incredibly compelling and part of this is I'm a five nine guy. I feel it in my bones when these ads hit me. They're so obviously for me that engaging with it is so obvious.

And I think this goes back to, I've talked about this before. I don't know if on this podcast, but Jonah Peri, who's the founder of Buzzfeed and one of the, like most legendary copywriters ever, he talked about that this was their entire social content strategy. Was this idea of saying, I want someone to immediately see themselves in the article.

And so they would write things like, you know, trends or funny stories. Only kids from the nineties would understand. What's beautiful about that headline is that it's both explicitly for a subset of people but it's a giant subset of people. So you can say something that's for literally hundreds of millions of people but make it feel very personal to me.

Right. Now I'm not from the nineties, so I should have said the eighties but you get the point. Is that I think that creative work, Richard, is the way you circumnavigate depending on the distribution to tell you who you're advertising to and you like, go and make it for somebody so specifically, that there's no doubt. Now does it still get delivered there? It'd be nice to know. I acknowledge that. But still, you do the work as a creative to make that clear. 

[00:16:35] Richard: Yeah. That's interesting. Sort of gives me a vision of a beautiful world in which the creative doesn't necessarily have to like respond to the data per se.

I think the issue with advertising versus other creative pursuits is that most of the best creative pursuits are done when somebody sort of thinks about what they would like, what would connect with them, and then puts it out into the world. With advertising. I mean, I've been in that position where you're sitting and you're just like Googling about CrossFit, women who wear sports bras or whatever, it's like, I don't know what that feels like. I can get there. Kind of, but then the data tells you, let's say something about like whatever, they buy everything at 10:00 AM and then all of a sudden you feel like you have to write like, is it, you know, almost 10:00 AM time to, you know, that kind of thing, which doesn't.

[00:17:15] Taylor: And what's funny is that like they were doing that based on the creative that you gave them but if you gave them different creative, it might alter their behavior entirely. Right. So that's, the funny thing about using data in that cycle. Which is that I created an ad, it produced this data and in order to amplify or recreate that data, I make a new thing. And that's sort of the Eugene Schwartz principle, right? Which is that. Every ad is in the moment, it's received an individual experience that will never be replicated. I forget the exact eloquent way in which it's stated, but that's the danger of the, like iterative, creative premise is that it's like you can never actually replicate the environment in which that ad was received ever again.

[00:17:51] Richard: Yeah. I think some comedian, I was reading once said what you do like to make a good joke, like a really good one is you make an observation and you trust that somebody else has observed that before.

Yeah. Like, yeah, I observe, fill in the blank, whenever I wear this type of shirt, the collar, you know, what folds in on itself or something like that. And then you develop it and make it funny and just hope that somebody else probably has experienced the same. 

[00:18:13] Taylor: The trust in our, shared humanity. Right?

[00:18:15] Richard: Yeah.

[00:18:15] Taylor: Which is that/ I am not that novel and my experience is not that novel. It's actually the gateway to connection. Is that there's something in that experience and that's why it is hard to, like you said copy for a women's CrossFit sports bra. But I mean, you're a big CrossFitter now, so you got a little closer to it.

[00:18:30] Richard: I dunno about that, but Advantage plus the conclusion gateway to connection is sort of what we're uh, what we're saying here, right? 

[00:18:37] Taylor: I am definitely an advocate of these machine learning tools being I have watched human decision making be this chasing of the wind in ways that is very hard to create consistent outcomes around.

And so the more that we can depend on letting computers do what computers are good at and people do what people are good at, I think the better we are as a business now. And I think we would be better off, Tony and I, Tony who's our head of VP of client Success. He and I were having this conversation yesterday and we drew like this, we were drawing this like sort of metaphorical graph of how much time we spend on like data and measurement versus marketing. We were sort of caught in this discussion about attribution and last click and da da we realized that the amount of time the team had spent that week on how are we going to measure the outcome was like 50 fold marketing in the story and the ad to actually produce the outcome.

And I think that's what Advantage Plus is trying to give us back is. Flip those, let go of the setup and go think, go be creative, go solve problems, go make your product better. I think that's a very real opportunity. 

This is the second time that Facebook has released this like clever little marketing trope about five key best practices, right?

And they used to call it the power five. And it's funny because the joke I made on Twitter was that in the days of volume, it was all about power. Go get more push. And so all of the tools were about producing volume, power and now it's the performance five, which is all about creating efficiency.

Because the problem now is that people's results aren't good. When all the results were good Power Five volume. Now results are struggling. Performance Five Efficiency. So they are account simplification, that's number one. And this is something Facebook's been being the drum on for a while. An Advantage plus fits very clearly under that.

Number two is creators for direct response. So they're leveraging, saying hey, there are people who make great content for our platform. Use them to help you sell ads. They've built a creator network. The ability to sort of leverage and either whitelist ads and run them through those content or just source content from people who know how to make social ads on the platform 

Number three is creative diversification. Specifically, they talk about formats. They're pushing Instagram reels right now as an area that they care a lot about, that they're putting a lot of effort towards, driving eyeballs towards. It's their big, you know, TikTok competitor that they're trying to gain back that. So creative diversification with the focus on reels.

Number four is conversions. API quality check. And this is the thing that we're doing with a lot of our customers right now. There's a lot of reports that the default integration between Shopify. And CAPI or the conversions API was not a great source of passing data.

So we're doing more custom integrations with a partner to l r. So that's conversions API quality check. And then number five is business results validation. And so they're encouraging people to do account wide lift studies, at least quarterly to help to validate what the attribution is showing.

And so it's Facebook acknowledging, we know there's some data integrity issue. We created these tools around lift studies as a way to validate your performance and we recommend you do those quarterly. And so those are the five I'll just say them. Request account simplification creators for DR creative diversification conversions, API quality check and business results validation. 

[00:21:41] Richard: So of those five, which one stands out to you the most for whatever reason? 

[00:21:46] Taylor: Yeah, I think that very practically there's like a, health check around the conversions, API quality I wanna make sure I'm playing in the right environment.

That I think is like, just do that. Just go make sure that you have good or great scores for your EMQ your event match quality. Go check that you can do it in your business setting. From there, I think creative diversification, you've heard me talk about. And I think you pair that with the account simplification in a lot of ways are huge.

And then we are big components of business results validation through what we call the hierarchy of metrics. That starts with financial measurements around contribution margin and driving new customers and looking at ANER or new customer revenue overspend. Like some of these, sequence before you just depend on platform ROAS.

So I think it's really important to understand your data stack and what you're using to measure and make decisions. I think creators for DR is basically a substitute for people being crappy at making ads. So I think that's a brand thing where we have some brand partners that are just awesome.

They make rad stuff and I don't think it's as critical for them. And then there's a lot of people for whom it makes a ton of sense to leverage people who know how to make socially native content. 

[00:22:46] Richard: That makes sense. So is there anything else that you wanna hit on Advantage Plus and performance?

[00:22:51] Taylor: No, I would just say that in my belief, it is in your interest to align yourself with the platform that you were spending money on to fight it I think is a losing game.

And you could choose to allocate your dollars somewhere else. That's well within your right as a business owner. But if they tell you this is the best way to use the tool, this is what we have spent our time and energy doing. These are the products we care about. Reels is important to us. It's a major business initiative.

You are going to get the most out of the tool by utilizing it in the way that they are designing it. agency owners, I'll speak to you for a second if you're listening. Facebook is going to incentivize you and the brands you work with, or brands, you can go to them directly and get access to coupons, get access to free money and spends and tests.

If you are aligning yourself with their interests, they are a partner, right? And so if you align your interest with theirs as much as possible, I think it's gonna produce the most fruitful use of the platform. 

And so that's what I would say is don't become immediately cynical. Hold it accordingly. Make sure it's generating the business outcomes you want, but go and try it. Engage them, show interest in their success and they'll have an interest in yours. I think it gives you the best chance at driving good outcomes. 

[00:23:54] Richard: Yeah. So we'll probably revisit this a little bit maybe a few weeks just as we start to roll this out across more accounts as I understand it, like we're already running this on a few, but it's only been. I don't know what a week or so. We don't really have any meaningful data on it but we will revisit this eventually, see how it's working what the learnings are from this. Because it sort of seems like this is the future, this is where things are headed, just generally. But certainly in Facebook, they're looking out for us, trying to save us from ourselves and give us the chance to do what humans are good at.

So, Taylor. Appreciate your time. Thank you as always for joining me. Everybody out there listening make sure to leave a review that really helps us and we appreciate listening to the eCommerce Playbook podcast. And we'll see you next week. 

[00:24:33] Taylor: Take care.