Written by Nima Gardideh, Co-founder, President, CTO at Pearmill
It’s now been two years since iOS 14.5 was launched. If you’ve been advertising for a while, you may have noticed the significant shifts in the performance of your ad spend on Meta and other performance-focused ad platforms.
In this post, we’re going to discuss the best practices companies are using in 2023 and beyond to ensure they’re able to achieve the best results. The recommended approach at the end of this post is what we use with clients for whom we manage $100M+ of yearly ad spend aimed at acquiring profitable customers.
Where is the industry headed?
iOS 14.5, and the marketing industry in general, are moving towards a more privacy-centric approach to tracking consumers’ behavior on their platforms.
At a high level, this means that platforms like iOS, Android, and even browsers like Chrome and Firefox are going to prevent ad networks like Meta and Google from getting per-user conversion details through automatic means. iOS 14.5 was the first shoe to drop, as Android added a similar approach in 2022, and 3rd party cookies are next (estimated 2024).
The future of the industry doesn’t include stopping tracking altogether, but instead to moving toward anonymizing the data as much as possible. Ad networks should know “some number of people converted because of these campaigns”, as opposed to “these exact people converted after seeing this exact ad on your platform”.
Meta’s Conversions API and Google’s Enhanced Conversions are solutions to this general shift in the market. They’re tools to help companies continue sending signals to these ad networks to help enable performance and decentralize tracking permission gathering to each company.
Why is it important to send conversion data to Meta?
Sending conversion signals to Meta is important because they use these signals to understand:
- What type of people on their platform are likely to purchase a product on your shop?
- Which of the ads, campaigns, and audiences in your ad account are bringing in paying customers?
- Which ads people are finding valuable in general (i.e. engaging and useful)? They want their users to enjoy the ads they see, and continue using their platform.
Meta uses a machine learning algorithm to help price impressions, choose which users on their platform see ads you’ve produced, and look for the cheapest impressions for you automatically. This algorithm uses the conversion signals you’re sending to Meta as one of the most important factors to choosing the right people within their user-base to target.
Meta is incentivized to give you the cheapest impressions (and cheapest conversions) because, if your unit economics are working from spending on their platform, you’re likely to spend more.
When you send Meta conversion event data and, in a more technical sense, use that event as the optimization event for your ads, Meta does the work within its systems to find the highest quality potential customers within their userbase. It then shows them the ad you’ve produced at a time that they believe they’re most likely to become your customer.
What are Meta Pixel and Meta’s Conversions API? Why should you use both?
Meta Pixel is a way to send conversion event data to Meta when the user is interacting with your site on the browser. For example, when someone adds a product to their cart, you can have the Meta Pixel send an AddToCart event to Meta to track that event. Or when they finish making a purchase, you can send a Purchase event to Meta.
Meta’s Pixel sends the data from the browser itself. This comes with a few disadvantages:
- Since the data is being routed directly from the browser itself, there are ad blockers that sometimes prevent that data from being delivered to Meta.
- The data transfer requests sometimes fail. This can happen is if the user leaves the page very quickly, or if they have internet connectivity issues when the events are being sent to Meta.
- Meta’s Pixel tracking is also affected by iOS 14+ changes, since iOS has mandated that Meta request permissions for tracking the user when advertising through their usual methods. While the impact on desktop web is minimal (as of this writing), it still affects mobile web users, which is the majority of people who engage with ads.
- Meta uses the Pixel conversion events to attribute which ads, as sets, and campaigns the user has seen or clicked on before each conversion event. They generally do this by matching a first-party cookie that they generate to a unique ID they pass to your site when the user clicks on an ad (in a query parameter called “FBCLID”).
These are all areas where Meta’s Conversions API can help! Meta’s Conversions API enables companies to send conversion event data to Meta from their backend systems instead of directly from the browser.
For example, when someone makes a purchase on your site, you can send a purchase event to Meta from your backend even if the user closes their browser very quickly, has an ad blocker, or has disabled tracking on iOS. Similar to Meta’s Pixel, they use this data to try to attribute each conversion to an ad, ad set, and campaign that the user has previously seen or clicked on.
Unlike the Meta Pixel, the way they attribute the conversion is beyond just the unique ID that they pass along:
- You can send them personally identifiable information (PII) like email address, phone number, etc., which they use to match the user with their internal database.
- You can send them pseudo-anonymous data like IP address, and User Agent (browser details).
- You can send them Meta’s own cookies from the front-end, which are generated by Meta’s Pixel.
When using Meta’s Conversions API, it’s common to see a boost in the number of conversions that Meta is able to attribute to their ads. The attribution improvement can be as high as 10-25%, which can come with significant ad spend performance improvements.
Meta even gives you a scorecard on how well they’re able to match conversions, and if the meta-data you’re sending them is useful:
Screenshot of the Event Matching score in Meta’s Events Manager for events being enriched with Conversions API.
How should you implement Meta conversion tracking for your e-commerce shop?
Our recommendation is to use Meta’s Pixel and Meta’s Conversions API simultaneously. This approach ensures that Meta receives the maximum amount of conversion events to attribute to users and ads on their platform, which will ultimately help your brand achieve lower acquisition costs.
There are a few technical implementations that are critical to get right when using this approach:
- Deduplication – sending conversion events from both the front-end (Meta Pixel) as well as the back-end (Meta’s Conversions API) means that Meta can double count conversions! For example, if you send a purchase event form the front-end and supplement that event with a purchase event from the back-end, Meta would accidentally count two purchases even though in reality there was actually one!
- Passing Metadata – Meta’s Conversions API needs metadata like email address, fbp/fbc (Facebook’s cookies), User Agent, IP Address, etc. to properly attribute conversion. This isn’t as technically simple as implementing the Meta Pixel.
- Freshness – when sending Conversions API events, it’s important to send events as soon as they arrive. The sooner Meta has the conversion data, the better the machine learning feedback loop for your ad spend will work.
While these may be complicated technical implementation issues to handle, companies like Littledata have made the implementation of Meta’s Pixel and Conversions API much simpler by empowering marketers to simply enable these destinations on their platforms.
If you’re looking to start implementing this strategy, sign up for Littledata and set up Meta’s Conversions API through them (Littledata’s integration works automatically for Shopify and BigCommerce merchants!). Next stop, you’ll want to hit us up at Pearmill if you’re thinking about scaling up your advertising efforts. We can help you with growth marketing, ad creative production, conversion rate optimization, and attribution modeling!