Meta’s Advantage+ & Google’s Performance Max – Digital Advertising Automation & AI Platforms

Could you tell us about Meta’s Advantage+ and Google’s Performance Max, what they do and why you think they’re important?

If I recall correctly, Performance Max came out about 18 months ago and Advantage+ is slightly less than one year old. You called them features – I think they’ve been positioned and marketed more as platforms. It seems that everything going on in the world in terms of AI and machine learning has caused people to focus more on what’s going on around potential benefits to clients and users. Why do you think there seems to be greater interest in these offerings right now, given that both have been out for over 9-12 months?

Can you highlight the specific positives for Performance Max and Advantage+ over the last 9-12 months or more? You mentioned that people are seeing some type of benefit or uplift from working with the tools or platforms – I think the conventional wisdom is consistent with this, but people might wonder about the metrics. During our last Forum Interview [see Digital & Social Media Advertising – Mid-2023 Update – 23 June 2023], you made very strong points about the importance of the creative, telling a story and differentiating – I think that’s very important and I agree 100% with the sentiments that you communicated. It seems that the initial, early benefits of online advertising were very much data-driven – these kinds of platforms utilise data and can provide a lot of interesting analytics, insights and results. What are your observations from using the platforms in terms of data-related benefits, particularly for clients that you work with?

Q: You highlighted that a lot of what we’re talking about is just a continuation of what the companies and businesses had previously been offering, but some of these are pulled together or enhanced by machine learning and AI, with a couple of things where there have been benefits. You mentioned conversion, quality of traffic, attribution and tracking – I’d like to focus on these. Do you have specific examples to provide more of a quantitative sense of the improvements you’ve seen from these platforms? I imagine that a lot of people use the features and notice that certain things have improved, but wonder to what extent? Are they seeing material vs marginal improvements? Are they consistent vs nuanced depending on certain circumstances? You flagged e-commerce as an area where there seems to be uplift. Could you elaborate on those areas and run through a few specifics?

You referenced the garbage-in, garbage-out philosophy – of course, the converse is also true, which is good data in, good data out. Is there a benefit to doing this and learning how to do this over time? Are clients that you’ve been participating with on these platforms for a couple of quarters seeing even greater benefits vs those that are just starting out? Is that consistent? Presumably learning how to use the platforms and features more effectively helps reap benefits, but I imagine that the system is also learning so there is an increasing level of benefits over time.

You mentioned budget commitments related and I read a suggestion that Advantage+ needs a minimum of USD 30,000 and 50 different advertisements within a campaign to ensure fully optimising the benefits. Essentially, we’re talking about substantial spend and significant scale requirements to really see the full benefits. It seems that a lot of the broader advertisers working with businesses such as Google or Facebook would be SMBs that can’t commit tens of thousands of dollars or dozens of advertisements. Do you think it is necessary to have that level of spend or commitment to truly see the benefits? Where do you see the inflection points?

It seems that bigger commitments are needed if using the platforms, and smaller advertisers might look to spend more with Google and Meta because they need more data to drive more benefit, especially when it comes to direct response and e-commerce. To what extent have you seen such platforms actually help Google and Meta retain market share, or drive incremental market share gains? How should we assess this given everything we’ve discussed?

You highlighted the importance of going beyond the black box and making sure to cross-reference data with third parties, etc. The ANA [Association of National Advertisers] put out a report indicating that there was around USD 100bn in advertising fraud in 2022. I think there have been a lot of questions more recently about YouTube and the quality and validity of its advertising solutions. What happens when people start questioning if the spend committed is doing what it’s supposed to? How much do you think the businesses and offerings in question would counteract that? When platforms are asking, “How do you want to optimise these campaigns?” and the user says, “I’m optimising for numbers of clicks or costs”, I’m guessing they allow for that as part of the set of goals, but maybe you’re not getting the results you should be getting. How might Advantage+ and Performance Max overcome recent questions about data and ad effectiveness?

Could you elaborate on the third parties and the market participants that you think have solutions that are worth using to help with data validation and attribution, or ad validation and attribution? You said you weren’t sure if platforms such as Advantage+ and Performance Max can directly address some of these issues.

Do you expect consolidation for the category? Presumably it has become increasingly important and something that people are aware of. You used the word scary, which suggests to me that people are looking into this and doing things to try to protect themselves. What is the likelihood of larger entities – whether Alphabet/Google or Meta/Facebook – saying, “We need to do better in this aspect, so we’re going to buy a player like X or Y”, or someone else saying, “This is a really big issue, this will help me give a leg up”? Aside from Google and Meta, who else could or should be doing something along these lines? Could you see these companies being targeted for acquisition? Would that make sense to you?

Are other players investing in and rolling out comparable tools? If we were to have an updated conversation in July 2024, who else might we discuss alongside Advantage+ and Performance Max? I imagine Amazon, Walmart and other retailers would have the scale to potentially look at doing something similar. Am I thinking along the right lines or have more traditional digital and social media companies also started pursuing this approach?

You alluded to TikTok, but I think one of the issues there is the scale of the ad tech stack – just fortifying and enhancing that has been an issue for numerous companies over the years. Obviously, Snap is in the middle of trying to implement significant upgrades. Do you have any thoughts on the ad tech stacks for Facebook or Meta and Google? Have they optimised what they need to or does a lot more work need to be done there? These are platforms that were released in the 1990s or 2000s and we’re 20 years on while they try to add new components and features. Are the players where they need to be from an investment and scale standpoint?

Could you elaborate on the importance of Advantage+ and Performance Max, especially how they can enhance what people are doing in terms of e-commerce? You said Meta and Facebook have used Advantage+ to almost resurrect or super-charge efforts around e-commerce and shopping. To what extent might that have long-lasting effects? It’s no secret that the company pushed hard into e-commerce as the pandemic began, but then ratcheted down a lot of the related investment and offerings. Could this help to figure out the right approach and model when it comes to e-commerce?