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Challenger Labs: Does Facebook Add-to-Cart Optimization Have a Downstream Impact?

aaron-sagotsky Aaron Sagotsky Associate Director of Social Media
Challenger Labs are how we make sure we’re constantly challenging the status quo for our clients through rigorous testing and retesting of our assumptions. We deliver those in-depth findings directly to our clients through a monthly newsletter to help them identify the right strategies to drive performance.

Today, we’re putting the spotlight on Facebook’s add-to-cart optimization and its downstream impact along the marketing funnel, particularly on retargeting.

Using our 2020 holiday shopping data and analysis from clients across various industries, we set out to uncover the overall effectiveness of add-to-cart optimized campaigns in driving customers towards a path to purchase. 

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THE QUESTION: Does Facebook add-to-cart optimization have a measurable impact down the funnel?

People who have added to their cart and abandoned before purchase are the most effective retargeting segments. These are customers who got as close to purchasing as possible without actually purchasing, making it more cost-efficient to market to them than a cold audience.

A Facebook add-to-cart optimization involves increasing spend to add more add-to-carts to our customer “pool” so that we can retarget to a bigger audience during the Black Friday, Cyber Monday sales period. It is more cost-efficient to attain add-to-carts than purchases, and there are a larger number of them as well, making it a common tactic.

We set out to find out if this strategy of having more add-to-carts than purchases could have a significant downstream impact on the retargeting funnel.

THE HYPOTHESIS: Facebook add-to-cart optimization could help fill the funnel

Your add-to-cart audience is the most qualified non-buyer. By optimizing for add-to-cart, we are optimizing for an action that happens before an actual purchase event.

Customers in the consideration phase are still checking out products and reviewing their options before actually purchasing. Our hypothesis was that by focusing our budget in this area and increasing the volume of people in this phase prior to a big sale, we could significantly and measurably help “fill the funnel” during the most important shopping period of the year—the holiday season.

THE TEST: Deploying add-to-cart campaigns for prospecting and retargeting

We examined nine different client accounts during the month of November that ran an add-to-cart optimized campaign. While the campaigns that we observed were mostly upper-funnel prospecting campaigns, we looked at retargeting campaigns as well.

To measure the downstream impact of these campaigns across the marketing funnel, we analyzed our add-to-cart audience data: conversion rate, dynamic, and various look-back windows.

THE RESULTS: What were the effects of add-to-cart optimization?

We found that 22% (2 out of 9) of add-to-cart optimized campaigns had a lower return on ad spend (ROAS) than their account average. For the majority of these campaigns, we also saw a lower prospecting average as well.

But did it help grow the marketing funnel?

facebook-add-to-cart-optimization-revenue

By calculating the revenue per person in the add-to-cart targets, we approximated a rough value for those additional add-to-carts generated by the campaign:

facebook-add-to-cart-optimization-client-example

Of the nine accounts we examined in November, the revenue generated from our add-to-cart audience averaged $0.53 per person, with a range of $0.03 to $2.53. The biggest differentiator was the look-back window of our add-to-cart audience.

Major takeaways:

  • 22% (2 out of 9) of add-to-cart optimized campaigns had lower ROAS than their account average—and, for most, their prospecting average as well
  • When factoring downstream revenue generated, there was a 21.9% lift in ROAS
  • The amount of downstream revenue generated by this calculation for these accounts totaled 27% of the spend that went towards them
  • Despite that lift, the add-to-cart optimization performance of 7 of the 9 accounts was far below the total account averages in November as well as the account prospecting average

In most cases, the perceptible revenue lift from the downstream impact was not enough to make add-to-cart optimized campaigns efficient relative to their accounts’ goals.

Notes and caveats: 

  • This calculation does not attribute value to clicks or any other non-purchase events beyond add-to-carts. However, the revenue from add-to-carts generated was relatively small, so it’s likely that additional benefits from clicks or engagement would be minimal.
  • Facebook reps have noted that there is a larger, algorithmic benefit at play—namely the algorithm gaining more data about how add-to-carts benefit the whole account. Without running an account-wide A/B test, this is difficult to verify.
  • The various accounts’ add-to-cart audiences that we examined varied in size and content—some were past 3 days, others past 14 or even 45 days. It’s likely that the add-to-carts added were more valuable than the average revenue per person calculated.

THE LEARNINGS: Should your brand utilize Facebook add-to-cart optimizations?

To determine the overall efficacy of Facebook campaigns that are optimized for add-to-cart events, consider two key questions:

  • Is having more algorithmic data points (more add-to-carts than purchases) an effective direct response strategy?
  • Does add-to-cart optimization have a significant downstream impact on filling the retargeting funnel?

While the main goal of an add-to-cart optimized campaign is to get customers to add items to their cart, these campaigns can also put customers on an eventual path to purchase. In some cases, the add-to-cart optimized campaigns we examined were effective based on our spend and the return we saw, making it worth the investment for that reason alone.

However, the benefit of “filling the funnel” with more add-to-carts than purchases did not end up having a significant impact on retargeting and generating more revenue per customer.

Most importantly: measure the success of an add-to-cart optimized campaign on its intended goal, not based on presumed downstream impact. If your add-to-cart optimized campaign isn’t efficient, don’t keep it running. If you have shorter add-to-cart pools, such as 3 days rather than 14 or 30, those campaigns are more likely to have a greater impact.

Ready to learn how cultivating a robust testing culture can help you unleash your full performance marketing potential? Find out by downloading The Challenger Framework right now.

Challenger Labs Facebook Add-to-Cart Optimization

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