Since 2021, Meta has begun to regain advertiser trust and combat its signal loss problem via two main tactics.
The first, its conversions API (application-programming interface), helps Meta better target and track ads by having marketers upload their own customer data sets to match with the platform’s first-party signals. But this tactic contains friction and is not as easy as Meta owning transaction data itself, Borow said.
Second, Meta has created artificial-intelligence-powered buying tool Advantage+. These tools have been called out for their lack of transparency, and if buyers begin to lose trust in algorithmic targeting, transaction data could become more necessary, said Shiv Gupta, founder of ad-tech education outfit U of Digital.
“Any ad company that can show ads on its domains and also drive conversions within its domains will be in great shape,” Gupta said. “For this to be a real advantage, a company will need to have significant owned-and-operated inventory and significant on-site transactions.”
Limitations of transaction data
Still, most advertisers won’t abandon set-it-and-forget-it AI buying tools or the behemoth social platforms that invented them. Even if these platforms lose some of their attribution abilities, they are still rich in the ultimate advertising resource: eyeballs.
“What walled gardens have, that retailers and commerce media players don’t, is consumer attention,” said Michelle Dooley, founder at Catalyst Media Consulting, which specializes in retail media and ad tech. “We go to a retail site when we want or need to buy something, but we spend hours on social platforms for entertainment.”
With transactions, you might reach too narrow of an audience.
Nikhil Lai, senior analyst for performance marketing, Forrester
Direct-response advertisers rely on transaction data for attribution. But linking ads to purchase is less important for an insurer or auto advertiser, said Nikhil Lai, senior analyst for performance marketing at Forrester. Even for lower-funnel marketers, most sales still happen in-person, where tracking is more elusive and transaction data is only so useful for targeting.
“By having transaction data in a layer in every buy, you no longer reach people who are light buyers and medium buyers,“ Lai said. “The key performance indicator is new-to-brand customers… [with transactions,] you might reach too narrow of an audience.”
