 a Facebook feed because there's the most competition among advertisers for placement.
As a result, when you're advertising on other placements such as IG stories or Messenger, what you'll get is a lower CPM. Plus, if you're able to maintain a conversion rate that's at least close to the same level as your Facebook feed conversion for your site-wide, then you're able to win on these other placements.
2. Meet Your Customer Where They're At
During the holiday season especially, when delivery is crucial and there's so much competition, you don't want to limit the amount of times you can enter the auction.
If you're only telling Facebook, “I only want Facebook feeds.” Then, you're ignoring all the other low-cost opportunities to enter the auction and show your ad to your most valuable customers – especially for remarketing audiences.
You shouldn't care whether someone sees your ad on a feed vs. messenger vs. stories. You're just trying to get your ad in front of your target customer wherever they may be living. What Facebook has that we humans don’t, is data about your exact customer and where they spend most of their time.
For example, let's say Sally Shopper is your exact customer and she actually spends all her time on Instagram stories, but she never looks through feeds. If you’re telling Facebook that you want placement in feeds only, you're actually missing out on an opportunity to show her an ad where she is interacting most.
The moral of the story: Let Facebook choose where to show your ads because they have the best data about where your ideal customer is most likely to convert.
Because you're able to enter more auctions, you're actually going to end up with a lower cost-per-result because you're taking advantage of low-cost opportunities within these placements. When the opportunity cost is there, you're able to maximize your portfolio by showing across all placements and this lowers your overall CPA.
By limiting yourself to only one placement, you're missing out on so many opportunities to show your ad to your target person at the lowest cost possible. Plus, when you allow auto placements you'll be able to enter more auctions and you have more chance of showing your add to your ideal customer.
So, for the last time, please turn on automatic placements. Trust us on this. Start by split-testing it and you'll see the results for yourself... or let us get the results for you, by working with us at Common Thread.This article appears in the Fall 2015 issue of The American Prospect magazine. Subscribe here.
In the late 1980s, Thomas Shaw of Little Elm, Texas, watched a news report about surging HIV and Hepatitis C contractions among health-care workers. When treating patients, nurses and hospital personnel would accidentally stick themselves with used needles.
Shaw had childhood friends suffering from AIDS, and he wanted to help. “I knew I couldn’t fix the biology side of it, but I could fix one part because I’m a mechanical engineer,” Shaw says. So he went to the nearest drugstore and bought a bunch of syringes. He spent years taking them apart until he finally came up with a way to solve the needle-stick epidemic.
Shaw’s syringe operated like a ballpoint pen: Once you fully depressed the needle into the patient, a ring would snap and retract the needle, allowing workers to safely pull out the implement. He called it VanishPoint. If disposed of after a single use, it would eliminate needle-stick entirely.
Shaw patented VanishPoint and formed a company, Retractable Technologies, in 1997. He got a Small Business Innovation Research grant, $650,000 from the National Institutes of Health, to manufacture his product and get it to market. But that’s when he learned about Becton, Dickinson & Co. (BD), which sells 80 percent of all syringes in America..”
THE TIGHT GRIP OF incumbents on the medical-supply industry is far from exceptional. Much of what we buy comes from a deceptively concentrated market. This is all the more surprising, given the wave of competition unleashed by the Internet.
The unaware consumer walks into a supermarket and sees aisles brimming with a daunting array of choices. But the majority of products come from just ten manufacturers. You’re made dizzy by the sheer variety of toothpastes, for example, but 70 percent of sales go to just two companies: Proctor & Gamble and Colgate-Palmolive.
One company, Luxottica, makes virtually every different brand of sunglasses in the world. They also own nearly all the eyeglass retail outlets, from LensCrafters to Pearle Vision to Sunglass Hut. Several years ago, Tyco bought up all its competitors and now makes practically every plastic hanger in America. You’d be excused for thinking you have many options for booking airline tickets and hotels online, but when the Expedia-Orbitz merger clears, there will only be two (Priceline is the other).
America gets its cable and Internet service mostly from four companies, after AT&T’s successful merger with DirecTV. There are only three big airlines, four if you count Southwest; four big commercial banks; and five big trade-book publishers, six before Random House merged with Penguin.
Even where you don’t discern market concentration, it lurks behind the scenes. “Underneath GM and Chrysler are the suppliers,” says the New America Foundation’s Barry Lynn, author of the book Cornered: The New Monopoly Capitalism and the Economics of Destruction. “There are different brands, but everyone’s using the same windshield wipers and the same alternator. With cat food there are like 100 different brands, but they’re all coming out of the same plant.”
This accelerated consolidation can be self-perpetuating, with incumbents discouraging competitors from getting a foothold, or buying them up as soon as they gain some market share. Market concentration has a powerful impact on the day-to-day lives of every American, not just because monopolists have pricing power. Monopolies can also stunt innovation, degrade quality of service, increase inequality, and concentrate political power.
This trend operates against a background of weakening antitrust enforcement. Some of the new techniques to defend market power were not anticipated by the authors of the major antitrust laws more than a century ago. Others would be all too familiar, such as squeezing and then buying out competitors, or creating tying arrangements to compel a consumer to buy one product as a condition of buying another. “We’re back to a little bit of the new Gilded Age,” says Allen Grunes, a former antitrust official at the Justice Department.
This hidden concentration and its negative effects on consumers may seem paradoxical. First, this is a low-inflation economy. So if monopolists are jacking up prices, why does this not show up in a higher consumer price index? Secondly, thanks in part to the Internet, some innovation does result in greater consumer choice and price discipline. Amazon, for instance, has forced booksellers to cut prices. Internet shopping generally increases consumer knowledge to shop for the best deals.
But in a segmented economy, monopoly pricing power and suppression of innovation in some sectors can co-exist with competitive markets elsewhere. As for low inflation, much of it reflects depressed wages, in some ways driven by market concentration. So the consumer is hit twice—once in the paycheck and again at the store. And the Internet, for all of its ability to facilitate shopping around, has facilitated platform monopolies or near-monopolies such as Amazon and Google, with other anti-competitive effects.
RETRACTABLE TECHNOLOGIES initially held talks with BD about licensing their VanishPoint syringe. But BD would not commit to actually using the technology, which would have required them to retool machinery. Thomas Shaw didn’t want to see VanishPoint die. But even after getting clinicians interested in using the syringe, he couldn’t get hospitals to buy it.
Trust Buster: Zephyr Teachout (right) with her running mate, Tim Wu, speaks to the media during her New York gubernatorial campaign in 2014.
As a Washington Monthly story in 2010 on Retractable explained, most hospitals acquire supplies through group purchasing organizations (GPOs), coalitions of affiliated hospitals that buy in bulk at a discount. The vendors actually pay all the GPO’s administrative costs, as long as the hospitals buy entirely from the narrow group of vendors. Shaw discovered that BD had contracts through GPOs with a “90/10” requirement. If a hospital bought 100 syringes from BD last year, they had to buy 90 the next year to qualify for the discount. If the hospital failed to purchase 90 percent, they would lose the discounts and pay a penalty, a cost of millions of dollars. This contractual obligation fortified the monopoly.
Unable to sell his product, Shaw worked with nurses’ organizations to pass the Needlestick Safety and Prevention Act in November 2000. It revised rules from the Occupational Safety and Health Administration, mandating hospitals to reduce their reliance on equipment that exposes workers to blood-borne pathogens. Committees within hospitals would have to “document annually consideration and implementation of appropriate commercially available and effective safer medical devices.” But hospitals still resisted Retractable’s syringe, wary of breaking the GPO contracts.
Shaw went to the Federal Trade Commission in 2002, complaining about being locked out of the market. The FTC had jurisdiction to bust up monopolies, but took no action. Shaw also sued BD and several GPOs under the Sherman Antitrust Act. BD settled the case for $100 million in 2004. Retractable Technology took the money