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Why is creative vital to scaling advertising campaigns? Incipia Miniseries

Gabe Kwakyi | May 8, 2019

Q: Why is creative vital to scaling advertising campaigns?

A: The fundamental nature of a social network is to feed the engagement of its users (which ensures that those users continue using the service and providing ad inventory). To that end, social networks must ensure that the content their users see (irrespective of whether said content is user-generated, company organic/unsponsored, or paid) continue to meet certain thresholds of satisfaction of their users (most often measured by CTR).

Furthermore, social networks feed on virality, and are as such beholden to the current trends in culture, making freshness of content (i.e. swapping in new creative every 2-4 weeks) nearly as important as the level of engagement (i.e. CTR).

CTR thresholds can vary based on network (for Facebook it’s around 1%), and they can also vary based on ad product (e.g. for a Facebook event campaign objective the threshold may be half that of a click or installs objective). There also exist scale accelerators or inflection points where as CTR rises, this unlocks dramatically reduced CPMs and raises the number of impressions a creative can earn (for Facebook such inflection points can start at 2% - 4%). These scale accelerators exist because realistically few creatives can achieve or maintain this level of CTR across millions of impressions, and these top creatives shoot straight to the top of the auctions and vacuum up high-quality impressions for cheap, leaving advertisers whose ads have < 1% CTR to be punished by paying a higher rate for fewer ad slots.

The reason why some creatives appear to go fully into left field with wild visuals that have little to do with expected branding may have something to do with the critical importance of CTR - that is to say that earning a high CTR may sometimes be more advantageous than earning qualified clicks due to the accelerator effect of higher scale and lower cost to reach eyeballs (especially when paired with a quality lookalike or down funnel event targeting).

You will sometimes see a high creative CTR at low scale; beware that it may be fool’s gold, especially if your budget/bid are not restrictive and the creative’s scale does not significantly increase over time. At lower volumes of scale, there are pockets of scale opportunity for any advertiser where sub-groups of users resonate with any given creative more than the average social use. This is facilitated by social networks’ ad serving algorithms which have become very adept at cherry picking users primed to respond to one or another kind of ad/advertiser. Yet over time these pockets often become “over-fished” by increasing budgets and experience diminishing returns.

Another key factor in the reason that creative is so vital to advertising scale is that improvements in ad targeting & bidding algorithms have seen incredible success in reducing the arbitrage ability of savvy marketers using targeting, bidding and budgeting. Yet machines and algorithms still have yet to succeed in creative production.

Many advertisers may see an initially incredible level of performance after first launching a new ad campaign for the first several weeks or months (often referred to as the honeymoon period), but over time creative will become a bottleneck which must be solved through regular production, testing, and iteration.

For these reasons and others, companies that wish to run scaled advertising (starting somewhere around $20k or $30k/month and especially over $100k/month) on social networks will be hard pressed to succeed beyond a few months without the support of a creative agency or in-house creative team.

 

 

The Incipia Marketing Miniseries is a collection of 250 to 500-word posts on topics spanning App Store Optimization, user acquisition, and analytics, written by Incipia CEO, Gabe Kwakyi – speaker, author of over 300 articles on mobile marketing and co-author of the Advanced ASO Book.

Incipia is a growth marketing consultancy, with a specialty in advertising, App Store Optimization, and analytics. For post topics, feedback or business inquiries please contact us, or send an inquiry to projects@incipia.co