Home Marketers Meta Might Be Right About AI Ad Spend

Meta Might Be Right About AI Ad Spend

SHARE:
Kitsch shampoo bar

What’s the best way for advertisers to get the most performance possible out of their Meta campaigns?

The answer, according to Meta, is to buy more ads on Meta.

It’s recommending that advertisers launch new ads into their Advantage+ Shopping Campaigns every single week, especially leading into the holiday season.

Meta would say that, of course. But it’s not the only one.

Lather, rinse, perform

Yingying Kuang, VP of growth and ecommerce at haircare and beauty accessories brand Kitsch – which spends more than seven figures a month on Meta – has been taking Meta’s advice, and it’s working out.

Creative diversification, which is Meta’s term for using a variety of different ad formats and creatives across its platforms to help the algorithm learn, “has been great for us,” Kuang said.

“I remember the days when you had to pretty much just guess which audience would work for which messaging,” she said. “There isn’t that manual guessing anymore; we’re trusting the algorithm and the AI to find the correct audience.”

Kitsch tests between 50 and 80 new ad creatives every week, and at least 30% of its budget goes toward creative testing.

The more ad creatives that Meta’s algorithm can chew on, the faster it’s able to see what’s working – or what’s not – and optimize accordingly.

It usually only takes between three and five days to get to a spend level where Kitsch can determine whether an ad is a winner or not, Kuang said.

For example, Kitsch learned that ads for its shampoo and conditioner bars, which are good for hair growth, were doing particularly well with an older demographic on Meta. It changed its ad copy to reflect that and started featuring more mature models and creators.

“This is one of our top audiences now from a performance perspective,” Kuang said.

At home with AI

ObjectsHQ, an ecommerce site that sells modern furniture, has had similar experiences since starting to use Meta’s AI ad tools in Q2.

In the past, “we not only found it extremely tedious and time consuming to manually optimize campaigns,” said Alfred Chehebar, the company’s CEO and founder, “we also saw different degrees of success at different times and couldn’t pinpoint what the issue was or the optimal solution.”

ObjectsHQ chairOne of the tools ObjectsHQ has seen the most success with is AI text variation on Meta, which generates multiple versions of ad copy, messaging and product captions to find the ones most likely to resonate with specific audiences.

ObjectsHQ has seen a 60% increase in its return on ad spend when using AI text generation compared with other campaigns, Chehebar said.

Heading into Cyber 5 – the critical, but also fraught and chaotic five-day shopping period between Thanksgiving and Cyber Monday – ObjectsHQ is increasing its spend through Advantage+ Shopping Campaigns, he said, with plans to keep that going through the holidays.

ObjectsHQ will also use Meta’s AI tools to rotate between its top-performing products from the past 90 days, including older products, to find more pockets of performance among new and different audiences, Chehebar said.

Meanwhile, it’s been getting cheaper to acquire customers. ObjectsHQ’s cost per acquisition is 41% less with AI campaigns versus standard campaigns, Chehebar said, down from $161 to $95.

Kitsch’s CPA hasn’t gone down. In fact, it’s been flat year over year. But Kitsch has also been able to scale its spend by 46% this year without raising its CPA, Kuang said, which is noteworthy.

“Usually when you scale that much on spend, you see a pretty big increase in CPA,” she said. “But we really haven’t seen CPA increases at all.”

Must Read

New WBD Report Makes The Case For Getting The Measurement Basics Right

Warner Bros. Discovery has a new white paper analyzing the data and methodologies of five top video measurement providers: VideoAmp, iSpot, Comscore, Innovid and Samba.

Monopoly Man looks on at the DOJ vs. Google ad tech antitrust trial (comic).

Google And The DOJ Filed Their Proposed Final Judgments In The Ad Tech Case – Here’s What They’re Still Arguing About

Google and the Department of Justice filed the next round of paperwork that will determine what Google’s punishment will look like in the ad tech antitrust case.

T-Mobile Brings Its Mobile Data Exclusively To Vistar To Scale Up DOOH Targeting

Advertisers can now use Vistar to activate both off-the-shelf and custom audiences built on T-Mobile’s first-party location and app data.

Privacy! Commerce! Connected TV! Read all about it. Subscribe to AdExchanger Newsletters

Apple Has Far-Reaching Plans To Block Hundreds Of Programmatic Data Companies From iOS

Apple’s WebKit crackdown appears to extend well beyond The Trade Desk, putting hundreds of ad tech, data and identity vendors on a mysterious, dynamically updated block list.

Josh Reed, Zoom's VP of brand and content, speaking at AdExchanger's Programmatic IO event in New York City (September 28, 2006)

Zoom’s Marketing Challenge Is That It’s Too Well Known For Its Own Good

Zoom has 99% unaided brand awareness, which sounds great on paper. But there’s a catch: Most people still think it’s just a video-call app.

Why Agencies Think They Shouldn’t Own Agentic AI Tools Or The Data Used To Build Them

Agencies are differentiating their tech stacks by building custom agentic AI tools for their clients. And they’re rethinking owning those AI tools – particularly since licensing them creates new revenue streams.