As we’ve noted in previous blog posts, with some clients we hear a number of recurring reservations as we continue to discuss the value of 3pd with Advertisers and Agencies. Because 3pd is massively underutilized today there is a natural hesitancy. People are concerned that 3pd:
– Is too expensive
– Isn’t allowed
– Doesn’t work
Regarding the additional expense of using 3pd in Social Media campaigns – yes, there is a cost. It’s between 10% and 15% of ad spend (calculated based on adsets that are using 3pd). In our next blog post we’ll highlight how, from a ROAS, perspective you need relatively small performance gains to justify the additional cost. Notwithstanding the fact that 3pd helps you find pools of users who could and should provide strong LTV.
In terms of what is and isn’t allowed it’s true that 3pd is no longer available as standard in many of the large Social Media platforms. However when the Advertiser or Agency uses DeepSync Labs to source this data outside of the Social Media platform this data can be distributed to the Social Media platform of choice with no issues (in the same way Custom Audiences can be uploaded).
Finally we come to the ‘it doesn’t work’ concern. Like all data there’s no guarantee of performance improvement. And as we know there are many mitigating circumstances. A Social Media platform might do a better job of identifying life-stage for example. But on the flip side liking a dog page doesn’t mean that someone owns a dog! Or how do you know what someone does for a living if they haven’t added that information to their profile?
It’s clear that 3pd works extremely well in the vast majority of cases. And this performance enhancement is accelerating as major industry shifts like iOS14.5 reduce the amount of visibility the Social Media platforms are able to glean from their own footprints. The key thing to ensure is that you have the right test frameworks AND that you’re continually testing. With 100,000+ potential audiences it’s important to evaluate multiple different data sources and providers.
Still not sure? See some example results below. There’s even an example that shows 3pd working slightly less effectively than native targeting! However in this example the client continued to utilize 3pd because even though the CPL was slightly higher the overall LTV increased given the way 3pd helps identify pockets of consumers who would ordinarily be ignored by native targeting or algorithms.
Home Services Client: 3PD CPL $14.53, Non-3PD CPL $22.52 = 35% improvement
Finance Client: 3PD CPL $16.34, Non-3PD CPL $19.22 = 15% improvement
B2B Client: 3PD CPL $17.69, Non-3PD CPL $33.77 = 48% improvement
Finance Client: 3PD CPL $25.65, Non-3PD CPL $26.95 = 5% improvement
Fitness Client: 3PD CPL $26.54, Non-3PD CPL $226.71 = 88% improvement
Home Services Client: 3PD CPL $26.60, Non-3PD CPL $32.73 = 19% improvement
Real Estate: 3PD CPL $44.72, Non-3PD CPL $43.28 = 3% worse than native (but higher LTV!)
Finance Client: 3PD CPL $158.56, Non-3PD CPL $162.75 = 3% improvement
For full details download the findings here