Most DTC eCommerce merchants aren’t used to utilizing market data for everyday decision making.
When properly factored into planning processes, in conjunction with your other data sources, you can use market data to make more sound, data-driven decisions.
Below are some of the top ways marketers are using market data to achieve superior results in Facebook Ads:
1. Knowing when to change creative or targeting
It’s inevitable that your Facebook Ads metrics, whether CPP, CTR, or CPM, will fluctuate over time. Supply/demand, seasonality and new privacy measures all influence these metrics on a daily, weekly and long term basis.
When your key metrics take a turn for the worse, how do you know if it’s something that you can control or if it’s due to the market trend?
By using market data, you can get the answer. If you see a drop in your CTR, for example, instead of immediately going ahead to fix the problem with new audiences and refreshed creatives, it’s wise to double check how other companies are doing. If all other companies have a similar drop, or an even bigger drop, then you know there’s no problem with your creative.
But if it looks like this chart below (your data in blue and others’ data in the other colors), then you’ve got a problem.
As Sam Harper, the CMO of Hippy Feet, told us about using market data, “Now, we don’t have false positives by thinking we have poor targeting, but are really doing fine. We can change our ad set configurations less often, and as a result we spend less time waiting for Facebook to optimize to new targeting settings. Also, we usually wind up getting good results from the initial targeting we set up; It’s just a matter of waiting out the storm a little bit.”
2. Setting goals
It’s a cliche at this point to say that without setting goals, you’re unlikely to achieve them (but hell, I said it anyway 😉). If you’re looking at your metrics based on historical data alone, you can only set goals based on a percent increase compared to your previous performance, but you don’t really know what your potential is.
By using market data, you can see how similar companies are performing in their KPIs, and use that as a benchmark. If you’re doing better than your peers, you should get the recognition you deserve and avoid spinning your wheels trying to improve something that isn’t broken. And if there’s a significant gap between you and your peers, then you know where you could be.
Looking at this, (your data in blue and others’ data in the other colors), it’s easy to see how much room there is to improve.
3. Knowing what to expect when launching something new (like new product lines, increasing budget, expanding to new countries, new marketing channel)
Every growth-oriented company must consistently do new things to fuel the top line. Either you expand to new markets, launch new ad types, launch new product lines, or you scale up and increase budget.
Before you execute on something new, you usually need a plan. At least something rough to project how much you’ll make and if it’s worth the cost. The issue is, because it’s new, you don’t know what to expect
One excellent way to know how much something new will cost is to look at how much that same thing costs other companies that are already doing it. For example, before starting to run ads in Spain, it would be wise to check current average CPMs in Spain. If launching a new product line, you can see average CPMs for that vertical. And if you’re scaling budget, you can see how much CPMs typically grow in your anticipated budget range.
Having hard data here helps you prepare for success.
Looking here, the ability to filter results for companies that are spending X per month, gives you a glimpse into what to expect.
4. Gain peace of mind
If you’re like most DTC brands, customer acquisition via Facebook Ads is one of your biggest expenses. You see your costs go up or you just see the monthly bill, and it never gets old; it’s daunting.
Knowing that you’re in it together with other brands and that you’re all going through the same ups and downs can ease your burden. A lot of Varos users look forward to our weekly email that summarizes market data for exactly this reason - they see hundreds of other brands with ups and downs just like them and know they’re not in it alone.