PlayAbly Podcast Episode 3: Beating Algorithm Changes and Optimizing Paid Social Ads

In this episode of the PlayAbly Podcast, we dive into the ever-evolving world of digital advertising with our special guest, Ray, a seasoned ad tech expert with nearly a decade of experience at top companies like Google and TikTok. We explore the complexities of optimizing ad campaigns across platforms such as Facebook, Instagram, and TikTok, and uncover the reasons behind the recent downturn in ad performance that many ecommerce brands are facing.

Ray shares valuable insights on the common mistakes businesses make when running ad campaigns—especially small and mid-sized brands—and offers actionable advice on how to navigate the challenges of over-optimizing, dealing with algorithm fluctuations, and producing quality creatives. We also discuss the growing importance of playable ads, which offer a fresh, engaging alternative to traditional ad formats, especially for ecommerce brands looking to stand out.

Tune in to learn how to stay ahead of the competition, leverage user-generated content, and run data-driven campaigns that align with today's algorithm-driven ad platforms.

For more on how to level up your ecommerce business with innovative ad strategies, visit PlayAbly.ai.

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Transcript

PlayAbly Podcast Episode 3: Beating Algorithm Changes and Optimizing Paid Social Ads

Kajal: [00:00:00] Today, we're diving deep into digital ads. What's working. What's not. And what you. I can do to get better results. I'm super excited to have Ray. With us. He's been in ad tech for almost a decade. Working both with brands on the agency side and within the platforms themselves at giants like Google and now TikTok 

right? Thank you.

First off, can you introduce yourself? 

Ray: Ray, I've been working in ads and ad tech for seven to eight years both on the agency side supporting brands and optimizing ad campaigns and buying strategies, as well as on the platform side, at companies like Google and now Tik TOK, to focus on optimizing the ads algorithms to improve performance serving and delivery. I've gotten to see both sides of the business, understand what's in the ads, black box but also what makes it frustrating for advertisers [00:01:00] it's been interesting seeing both sides 

Kajal: hopefully you can have good, tips and advice for our, e commerce shop owners. who are listening? I know that one of the common complaints that we hear in the BD calls is just, a downturn in, ad performance, whether that's, Facebook or Instagram, TikTok. what is causing that? 

Ray: Yeah, I think there's a number of factors. at a high level, the digital ads marketplace has become significantly more competitive, right?

During COVID so many people started their own e commerce shops amongst other businesses that require digital advertising simply because, they had free time So there's an increase in demand for ad space. But the overall supply or the total number of surfaces that ads can be placed on remain more or less the same.

So as a result, what we ended up seeing is just a more competitive landscape leading to lower ROIs, higher CPAs, just because there's so much competition now compared [00:02:00] to before. 

Kajal: Got it. So the little guys, who don't have the budget or the team to combat these changes, are probably the ones getting left behind.

what mistakes have you seen, just with somebody who's running a campaign on any of these social platforms? 

Ray: I want to separate this answer into two parts because large brands have different problems than SMBs or mid size brands.

focusing on the mid size and SMBs first, I think there's two main pieces. The first piece is that a lot of these smaller brands. try to crack the black box and figure out how Google or Instagram or TikTok is deciding which ads that deliver and you know what the CPM is.

And it's You know, these are multi billion dollar companies who built these black boxes that you frankly can't crack. and having worked at these companies, a lot of times it's a black box for them as well. So I think the number one mistake for SMBs [00:03:00] and mid sized brands is they over optimize.

They make many, small changes to their campaigns to try and find this sweet spot. But these over optimizations, every time they're made, the bidding algorithm itself makes adjustments to adapt to your new campaign settings. And that just creates more fluctuation, which makes your data even harder to interpret because you might, at 6am today, Have a 10 XRO as, and then at 9 AM, have a 0.5

as a result of changes to the campaign, I think the second piece is, and this is where the SMBs and the midsize brands really struggle to compete with the Goliaths in the industry is that. The creative supply and creative quality is a huge issue that's very difficult to solve, especially for smaller brands, just because it is so expensive to build new creatives.

It takes such a long time. And a lot of times by the time your creators are built and you start testing them, they might already be out of season. so I think just having quality [00:04:00] engaging creatives, whether it's an image or video or playable ad is so crucial to the success of a lot of the Goliaths in the industry.

it's a difficult problem to solve for SMBs and midsize brands. 

Kajal: How many creatives were they testing? 

Ray: when I was at Google, it was mostly image creatives and we'd see collections of thousands, if not tens of thousands of creatives per, advertiser ID.

And each brand would often have multiple advertiser IDs because there's multiple agencies managing different verticals within a brand. and then now at TikTok with video creatives, because they are more expensive to create or to acquire, we're seeing less, but still in the thousands, not so much in the tens of thousands.

these creatives are constantly tested across audiences, ad sets, campaigns. the mantra is really focus on quantity over quality, right? They believe that they'd rather spend a month producing a thousand new creatives [00:05:00] than three that may not be great quality.

it's so hard to predict.

Kajal: And so doing all these what would you say are tips for running data driven campaigns, that, align with the way the algorithms operate? 

Ray: the best creatives are videos, 

Whether on Instagram, YouTube, TikTok, whatever it might be like video creatives in general, outperformed images. Just because they provide so much more information to the user in this, in a similar amount of time, they can be so much more captivating and engaging, but additionally, specifically like user generated type of creatives, right?

So the, when we see a, content creator or an influencer talking about a product and expressing why they like it, that tends to do a lot better than your traditional Nike ad that shows different angles of the same shoe and how cool it is and how well designed it is and whatnot. but one thing that is interesting that I've seen come up in the industry is like playable [00:06:00] ads.

This is something I've seen a lot on Facebook because it's a nice in between image ads and video ads, video ads are expensive to produce. Image ads are easier but less effective. And the whole reason video ads are as effective as they are is because they're more engaging.

There's more content playable ads sit in this nice in between space where you can still produce it easily on your own without hiring a whole video team or trying to acquire content from creators, but it does offer a lot more information about your brand than an image ad does, therefore driving that engagement.

driving not just longer engagement, but also deeper engagement through the different screens of the playable ad, and then ultimately learning about the brand or the product through each screen or each page of that playable ad. So it's a really interesting idea that I know Playably is in this space and there's a couple other companies playing around with this as well.

And I think that's a really cool platform or really cool medium for a lot of these SMBs and midsize brands to start leveraging. 

Kajal: when we worked in gaming at Unity, gaming ads were the norm. you want people to download an app or play a game. give them a sample.

why don't we [00:07:00] see it more outside of gaming? 

Ray: that's a good question. I think a lot of it really just comes down to people tend to stick with what has worked in the past, right? Like a lot of companies, a lot of brands rely on agencies. or either managing their ad campaign or building their creatives or both.

And these agencies, prior to COVID had a great track record of Hey, we're just going to build some really nice looking pictures, maybe short videos for your brand. We're going to charge you a ton of money, but they're going to kill it because we were in a space where As long as you had a decent budget and some like average creatives, you were able to drive a high ROAS.

the competitive landscape, has changed. We're no longer in that marketplace. The expectation is a lot higher for creative quality. and it's a lot harder driving engagement, but just like any industry, it's always slow to adapt to the new requirements of the current market dynamics.

So a lot of these agencies in a way are trying to [00:08:00] execute an outdated playbook because it's easier than rebuilding their whole playbook to adapt to the latest market strategy. And because playable ads weren't a part of the e commerce advertising space historically, it's not necessarily.

something that's getting adopted today because it's expensive for agencies to switch 

Kajal: as we see more case studies it's natural, we'll see the growth of playable ads as they become more ubiquitous 

Ray: Yeah, that's possible. the advertising space hasn't changed for so long, right? So it's waiting to be disrupted. I don't know if the existing agencies are even able to make that pivot and to exploring this new playable ad format, from, a team full of designers to Engineers who can design these playable ads and build them.

hiring and building new teams within a company is not easy to do. So it'd be interesting to see if these old agencies are able to pivot, or if there's going to be a new set of companies that focus on playable ads that kind of, become more dominant in the space.

Kajal: as we see playable ads grow with social media, built on [00:09:00] algorithms and personalization of, what people want to see what they have been seeing what they're interested in. How can people who want to do interactive or playable ads take advantage of these data driven personalization algorithms to boost engagement and conversions?

Ray: I think we're in the space where generative AI is booming, right? And one of the great use cases for general generative AI is hyper personalization that you ask chat GPT a question, it gives you an answer specific to what you're asking with every detail of the question answered.

And I think, while there are companies out there that are working on, Projects that leverage generative AI to create customized video content. That's much, much harder to do than using generative AI to create customized text content. And that's where playable ads has a really unique advantage because it is mostly text and image based content.

You can cater the following question in the playable ad or the following screen in the playable ad to that user specifically based on their past answer [00:10:00] and based on their existing profile. The cool opportunity here is a playable ad generation tool that is able to leverage your user data so that the questions or the challenges that come up in the playable ad are unique to the user that's viewing it and relevant to their purchase history or other products they browsed.

the nice thing about playable ads with the technology we have today is instead of trying to sell, I don't know, a hand cream to a cohort where you've identified that 70 percent of them like hand creams, you can start with an approach of okay, this cohort of people, 70 percent like hand creams, but 30 percent don't.

But we can still run them in the same campaign and just simply deliver a different set of a set of playable ads for each cohort. instead of one approach for the majority of your users, you're finding an approach that works for every single one of your users.

And that's how you can maximize ROAS and lower CPA by having the most engaging creatives that move them to the next step in the purchase funnel. [00:11:00] 

Kajal: And is there any social or is there any privacy implications like with the iOS changes and GDPR that would impact a strategy like this?

Ray: privacy is always a struggle to find the balance between maintaining user privacy, but also delivering the things that the user cares about. Meta has found a great way to solve that with their new AI based targeting system less reliant on personal, information.

there's an opportunity to take a similar approach in the. Playable ad space where we can guess what types of things the user will be interested in and generate a quiz with that content as opposed to knowing, causal specifically likes a B and C and let's build it for her.

I think there's a middle ground but I don't see privacy as a big blocker to the growth of playable ads as a new ad format. 

Kajal: what is. the next big thing in social [00:12:00] ads. 

Ray: TikTok has done a great job of building a platform that has driven really just unprecedented amounts of user engagement, right?

The session times are through the roof. they've also built an ad platform that leverages that engagement by building ads that Don't disrupt the user experience. And I think Instagram was a great pioneer of the space as well. When you're scrolling through TOK, a lot of times you see an ad and you don't realize you're looking at an ad.

And I think that's really key here is for the platform to integrate the ad experience so that it's seamless and not disruptive. And that was always a problem with like video game ads in the past where you're in the middle of a game. And it stops you and then a screen comes up and it shows you an ad that you're forced to watch.

Nobody likes that. Same with YouTube. They stop your video, they play an ad that disrupts your experience. So I think the first piece is, it's going to be huge for these advertising platforms to figure out how to integrate their ad format into the organic experience that exists today. So [00:13:00] it's not disruptive.

And the second part is then it's going to be up to the brands and the agencies to build content, to build ad content or ad creatives that's relevant to the surface of the ad is being shown on, and also in a format that matches the surface of the ad is being shown on. So for example, if you're scrolling through tick tock, which is mostly short videos, you don't want to be running an ad that's suddenly an image.

Cause that disrupts the user flow. It makes it very obvious. It's an ad and not a piece of organic content, but also if you're scrolling through tick tock and you're, you love basketball, so you have a ton of tick tock videos that are around basketball and suddenly you can add for a hand cream that's going to disrupt your experience.

It's going to be very obvious that's out of place and not a part of the regular tick tock algorithm. So it's going to be really important for. Brands to build a large set of creatives that are catered to all the potential audiences that they could reach and then leverage platforms to deliver the right creative to the right audience.

that's why I think going back to something we mentioned [00:14:00] earlier, the mantra around quantity over quality is so important. You got to give the algorithm enough choices to choose from that it's more likely to deliver the right choice at the right time to the right person. 

Kajal: I know algorithms change all the time.

Is that something that could combat, any down shifts in ad performance when there's an algorithm shift? 

Ray: Absolutely. algorithm shifts, it's like a stock market, right? It's going to change. You can't control it and you can't predict it. So the only thing you can do is to arm yourselves in a way to mitigate any negative impacts of the macro change that's happening to these algorithms.

And I think, again, the best way is by giving the platform more options So no matter how it changes, You have creatives for each scenario. 

Kajal: Great. one last question. Any advice, you can give to e commerce brands navigating complexities of social ads?

Ray: Yeah. don't overthink it. It really is a game of throwing everything at the wall [00:15:00] and seeing what sticks. and leverage every resource you can to produce. As many creatives as you can, affordably larger brands do a much better job of than the cheap, the smaller brands is the ability to produce just way more creatives to test.

Kajal: For your time, Ray. appreciate it and all your advice and we'll catch you next time on the Playably podcast.