Gram Marketing Chapter 2: Measuring Ad Fatigue

Recognising Ad Fatigue (ROAS & CRFC)

Imagine this.

You have been running ad campaigns for the past few months with consistent click-through rates. However, all of a sudden, you notice that in the past week, your ad campaign has received less than half the traction it normally would, and your potential customers are moving further away from seeing your ads. You look through your latest ad campaign, but everything looks good to you. What has happened?

 

What is ad fatigue?

In this situation, a highly probable answer would be ad fatigue. Ad fatigue occurs when your ad frequency gets too high, causing your target audiences to see the same ads over and over again, and therefore becoming less responsive to them. If your campaign is not ROAS-positive, it means that your campaign is decreasing in performance and you should review the Cost, Relevancy, Frequency and CPM (CRFC) metrics.

In the event of Facebook ad campaigns, the algorithm is designed for it to decrease in performance over time when it starts to hit the stage of ad fatigue. Regardless of how much you spent on Facebook ads – be it fifty dollars or a thousand dollars, the ad algorithm works the same way for every advertiser. When ad fatigue kicks in, your campaign starts to receive lower relevance scores, but higher CPM and cost per results, which decreases the number of results your campaign gets and ultimately reduces your overall Return on Ad Spend (ROAS).

 

Identifying ad fatigue

Fortunately, ad fatigue is not difficult to identify! By reviewing your ROAS and the four metrics CRFC, you will be able to determine if your ad has reached saturation levels of fatigue.

 

A higher than usual Cost Per Click (CPC) rate

The first major sign of ad fatigue starts from observing a higher than usual Cost Per Click (CPC) rate. A high CPC rate could be an indication of higher viewership by the same target audience, causing them to be bored of the ad – and therefore not clicking into it. Coupled with decreased click-through-rate (CTR), ad fatigue has definitely occurred. A good gauge of the average CPC in Facebook ads across all industries is $1.72, while the average CTR is 0.90%.

Therefore, observing a CPC that is significantly higher, or a CTR that is significantly lower than the respective benchmarked rates above, should call for close monitoring on your ad.

(*Data of Facebook Ad Benchmarks were adapted from WordStream – wordstream.com/blog/ws/2017/02/28/facebook-advertising-benchmarks)

High Ad Frequency

Frequency is the average number of times that your target audience has been exposed to your ad. In numerical terms, an ad frequency of 0.5 means that roughly half of your audience has seen it; while a frequency of 1 means that the ad has been exposed at least once to each person in your audience; and any frequency between 3-4 is a strong sign that ad fatigue is nearing – since Facebook starts to promote your ad less often once your audience has seen the same ad more than twice.

However, as suggested by Facebook, there is no “magic frequency level” that the social media platform is able to prescribe for every brand and ad campaign. It is important for you to take into account factors such as the size of your market share, how established your brand is, how much voice your brand has in the market, the length of your purchase cycle and frequency of campaign usage, when determining your most effective frequency level. Facebook shares that for brands with a large market share, a frequency cap of 1 to 2 per week is able to capture a substantial portion of the total potential brand impact; whereas for new brands with lower market share, a higher frequency might pan out to be more effective (Facebook, 2016).

(Information adapted from https://www.facebook.com/business/news/insights/effective-frequency-reaching-full-campaign-potential)

 

Your relevance score is suffering

As the frequency of your ad increases, it is likely to lose its relevance score. An ad relevance score demonstrates how well your ad is being received by your target audience; the score combines ad quality and various relevance factors to give advertisers an idea of how suitable their ad campaigns are to a target audience when compared with their competitors. On Facebook, once your ad has received 500 ad impressions, your relevance score will start to be generated using a scale from 1 to 10. Ads with low relevance scores are usually accompanied with higher costs, while ads with higher relevance scores are rewarded with lower costs.

A major factor that influences an ad’s relevance score is the ad engagement from your target audience. The more you take care of your relevance score, the more likely your ad campaign will succeed.

 

CPM

CPM, short for “cost per mille”, measures the cost per 1,000 impressions for an ad campaign. Typically, the lower your CPM, the higher your ROAS. Therefore, a high CPM is an indication of a weak ad campaign. CPM is highly linked to your relevance score; having a low relevance score means that Facebook is showing your ads to the wrong target audience, therefore, increasing the cost of your ad impressions unnecessarily.

 

Fixing ad fatigue

If you have identified any of the above symptoms that points to the occurrence of ad fatigue, fret not. You can always start again! Stop your existing campaign and run a new one. A few things to take note of before running your new campaign include: firstly, coming up with a smarter ad schedule – by scheduling your ad to only run during peak hours instead of 24 hours a day, you have come up with a more efficient way of spending your ad budget; secondly, changing up your target audience – create a new audience with as little overlap with your previous one as possible, to prevent the same population from being chosen by Facebook algorithms again; lastly, split your ad campaign by placement! Instead of creating a single ad campaign that targets both desktop and mobile at the same time, split them up and run both campaigns separately! Optimise each campaign to their own requirements and make full use of your ad spend.

There is in fact a pattern: as spending increases, ad fatigue sets in – leading to a drop in performance. This happens because a large budget lets the advertiser reach a big group of people in a short amount of time; this increases the exposure of the campaign to their target audience. After a couple of times, members of the audience will start ignoring it – leading to creative fatigue. Until there is a new creative win, the performance of the ad campaign will slowly deteriorate. Therefore, it is important for advertisers to constantly produce new ad creatives. If you are thinking of ways to come up with new visuals to accompany an existing ad copy that you have, you might want to consider Gram! Gram is a creative digital agency that can help you bring your stories and concepts to life in video form. To explore new visuals and animations for your ad campaign, contact us at gramvideos.com today!

 

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Gram has helped businesses win their audience over with explainer video animations and corporate videos since 2014.

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