The Facebook Ads Power Law
What's your spinning tube?
When I was the head of growth at Thriva, there was one ad from that defined that time for us. We called it ‘spinning tube.’
Spinning tube became a bit of an ongoing in-joke. When we’d produced it, no-one expected it to do that well.. It was low budget, didn’t land much messaging, and was almost purely product-focused.
It smashed it. We tried iterating it to be higher budget. It didn’t work. We tried doing making adjustments, more messaging, different aspects of the product. None beat OG spinning tube.
If you’ve been running Facebook Ads for a long time, you will no doubt have your own spinning tube. Something you’re likely sick of that you can’t beat.
Here’s my message for you today: stop trying to beat it.
Most of your account will run on one or two ads
Ad effectiveness follows what we call the Facebook Ads Power Law. That is a very small number of ads will be responsible for the vast majority of your acquisition.
We’ve analysed this at Ballpoint across different sectors, verticals, and time periods, and the results always do the same.
Over the course of a year, what you’ll likely see is:
Your top add takes up about 5-25% of all spend
Your top 5-15 ads take up another 25-50%
You have a huge long tail that all spend <=1% of spend
Taking one account as an example:
We ran 494 ads across the year
The number 1 ad was responsible for 20% of spend
The 2nd around 11%
Then positions 3-5 between 2-10%
The remainder all sat across a long tail
The notion of creating ads to beat your best performer is broken
Often when I talk to other people running ads, they talk about their need to ‘beat the hero’ / ‘beat the control’ / ‘beat spinning tube’. It’s the wrong way you approach it.
Let’s say your marketing makes you CM3 positive at a £25 CPA.
You’ve got an ad in the account that always takes a large amount of spend each week and this last month has hovered between £20 and £24 CPA.
You run 5 new creative formats with 3 variants of each. And of those 15 assets, none beat the hero ad during your two week test.
What do you do? Bin the ads? One common way to approach ad accounts is to now bin those ads. But first you need to check how profitable each are by themselves.
Say two of those formats are below £25, and a couple of the variants in the others are below £25, those are ads that are worth scaling. Those are winning profitable ads.
It doesn’t matter if they’re spending less than your hero asset. Nor does it matter if they have better CPA and still spend less than your hero asset. They are all winning ads.
What if our ads aren’t profitable like that yet and we’re on the learning journey?
If you’re earlier stage and still making the channel work then you want to look at overall account averages that week.
If you’ve got a £75 CPA as the current standard CPA – but you actually need a £38 CPA – that’s fine, you’re on the journey. Judge those new ads against the account averages to judge if they’re worth continuing. Your account will become a lot healthier – and you’ll learn more if you continue to make incremental gains each week.
You need a large volume of ads to scale accounts
Scaling accounts requires lots of ads. The more you spend, the faster your ads get fatigued. Users are 45% less likely to respond to an ad having been exposed to it four times or more.
It is vital therefore that if your goal is to scale your customer acquisition that you begin to build up a growing library of ‘ads that work.’ You won’t ever do this if you’re just chasing ads that can beat the hero ad.
To take an account from £10k/month to £100k/month and then to £1m/month will require an exponentially larger volume of ads.
And while predicting outlier successes is impossible (honestly I’d challenge anyone to do it), creating a system for ads that can beat averages, be profitable, and help you scale is much easier to do.
The aim should be for that long tail of 1% ads to all be profitable – not for isolated ads to beat the number one.
Unbeatable ads do come and go
One ad account we work on I’ve now seen since 2016. I’ve seen the ‘unbeatable’ ads come and go. They do eventually shift. But they don’t shift because you’ve found an ad to beat it.
They shift because your product develops.
They shift because your customers needs develop.
They shift because the way people use social platforms changes.
Product market fit ebbs and flows. Life goes on. You are not selling a product in a vacuum but an ever developing state.
Focus on building as many ads as you can that are profitable Or beat your account average CPAs. Keep doing that over and over and your account will grow over time.