How Will CCPA Impact Facebook Ad Performance?

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On January 1, 2020, the California Consumer Protection Act became state law. The new legislation has had different implications for different businesses—and left lots of uncertainty about compliance in its wake.

For those in the digital advertising space, the CCPA rollout has been met with a lot of uncertainty. For one, the statute doesn’t technically cover every advertiser. CCPA applies to companies with one or more of the following conditions:

  • Gross annual revenue of $25 million
  • Possession of personal information of 50,000 or more consumers, households, or devices

OR

  • More than 50% of annual revenue is attributable to selling the personal data of customers

That said, gray areas may exist for brands and agencies alike. That’s why we’ve been recommending first and foremost that all businesses consult legal counsel before moving forward with compliance measures.

How CCPA Affects Facebook Advertising

The social team at Portent has been navigating the complexities of CCPA since the state law went into effect earlier this year. With an overwhelming majority of our clients relying on Facebook as their primary advertising platform, understanding compliance as it relates to the platform has been a priority.

Facebook isn’t new to questions related to privacy and data sharing. As a result, they’ve remained adamant that, for the most part, their existing data policy falls within the realm of compliance. While Google rolled out changes in November 2019 to help partners adjust to CCPA regulations, Facebook initially stated that they didn’t need to update web-tracking services since they were not technically “selling” the data they passed back to advertising partners.

Fast forward to July 1, 2020, when enforcement of the new data privacy law began. Facebook implemented Limited Data Use (LDU) automatically for all ad accounts on the platform to aid individual businesses’ compliance efforts. This limited data collection for California residents immediately excluded them from pixel-based retargeting efforts. As a result, panic ensued as advertisers grappled with the performance-related repercussions of CCPA enforcement. Limited data from California has meant uncertainty around targeting and conversion attribution metrics, with some accounts experiencing more drastic declines in performance than others.

That’s been true at Portent, too. We manage ad accounts for several businesses in different verticals, but it seems like Limited Data Use has affected our clients across the board. Here’s what we’ve seen so far:

Business-to-Business

For a B2B brand in the cloud communications space, around 10% of leads captured in June were attributed to California. In July, we saw this number drop to about 1%.

E-Commerce

In reference to an e-commerce client account, Social Media Team Lead Lauren Clawson cited some pretty large discrepancies in cost per purchase following the LDU implementation.

“Looking at July 1-31, compared to May 31-June 30, cost per purchase for the account as a whole was down 35%. For California specifically, it was up 103%.”

How to Address the Effects of CCPA on Your Facebook Campaigns

If you’re wondering how to mitigate performance impacts after enabling LDU (whether through Facebook or on your own), things are admittedly still uncertain for advertisers. To better understand how CCPA will impact your audiences and results, we recommend taking steps to isolate users in California. This could mean excluding residents from your campaigns entirely (although, Californians will automatically be excluded under CCPA unless they opt-in and agree to data collection) or, better yet, breaking out your ad sets to target the state is targeted individually.

Regarding the aforementioned ecommerce client, Lauren mentions that she’ll likely be leaning on state-specific exclusions.

“Spend only decreased by 5% during that window, so I will likely have to exclude California if I don’t see Facebook’s algorithm move spend elsewhere.”

Looking Forward

So, what now?

Initially, advertisers had until July 31 to implement the flag on their own or assume non-compliance.

However, after some pushback from advertisers, Facebook extended the transition period, giving businesses until October 20, 2020 to start implementation.

Facebook's LDU transition period setting offers three options: end transition period now, keep default transition period (July 31), or extend transition period to October 20, 2020.Facebook's LDU transition period setting offers three options: end transition period now, keep default transition period (July 31), or extend transition period to October 20, 2020.

While we can’t yet know how CCPA will affect the health of our clients’ ad accounts long term, advertisers can and should anticipate more restrictions and limitations on the way we access customer data. Learning how to be nimble and accommodating despite these changes is going to make or break marketers in the future.

The post How Will CCPA Impact Facebook Ad Performance? appeared first on Portent.

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