Uncommon Goods, a competitor to Etsy that sells mostly domestic-made items such as personalized drinkware and jewelry, had recently seen many of its online channels plateau in terms of advertising effectiveness, Hashemi said, noting that the brand had been planning to try new channels. Facebook’s “degradation in performance” and change in reporting metrics hastened that plan, he said, and led to a roughly 80% plummet in the brand’s spend with the social media platform.
The company is not the only direct-to-consumer brand turning to TV at the expense of its social media marketing budget. In recent years, many startups, including Casper and Peloton, have grown TV advertising. In the first half of this year, direct-to-consumer brands spent $2.7 billion on TV advertising, 63% of their total spend, according to a report from advertising intelligence platform MediaRadar.
A year ago, Uncommon Goods spent about 30% of its marketing budget on Facebook, including Instagram. That figure is currently closer to 5%. New experiments like pulse testing, or advertising on Facebook in certain regions for a few weeks at a time and then measuring sales in that geography, are not proving to be very effective either, Hashemi said.
“We’re trying to come up with alternative ways of estimating Facebook’s impact other than just relying on their conversion reporting, which we know has flaws,” he said. According to Facebook's Ad Library, the brand was still running several ads on the platform late last week.
Last month, Facebook told advertisers that the changes Apple made recently to its operating system skew conversions by 15%. When asked for further comment, a Facebook spokesman directed Ad Age to a recent blog post about the steps the company is taking to improve the issue.
“We’re optimistic about our multiyear effort to develop new privacy-enhancing technologies that minimize the amount of personal information we process, while still allowing us to show personalized ads and measure their effectiveness," the post read, adding that such "efforts will take time" and that there are steps advertisers can take in the interim to "maximize performance in this new environment while still respecting people’s privacy.” Facebook has shared a list of such actions with advertisers ahead of the holiday shopping season.