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The Dish on Facebook’s Changes and Impact on Franchise Development

Wondering why you’ve seen a significant increase in leads from your paid social tactics on Facebook and Instagram? The answer is simple. In an attempt to make their advertising policies more secure, Facebook has removed the ability to directly target 3rd party data segments on its ad manager platform.

Confused? Don’t fear, Hot Dish is here to start unpacking this Facebook business and explain what this really means for your business.

First off, what’s 3rd party data? The short answer: 3rd party data is data that a marketer acquires from various outside sources. The long answer is a little more complicated and explained quite well in this article.

Before this removal of 3rd party data, financial segments have been heavily used in targeting on Facebook for franchise development to better qualify leads. The cost to open a franchise ranges from $10,000 to $5 million, and the majority of prospective franchisees need a net worth ranging from $50,000 up to $75,000 to $200,000 or higher.[1] In the past, an advertiser’s ability to be super selective and remove those who do not fit financial requirements has proven successful. We were able to serve ads to the right audience, preserving media budget only to those who could financially afford to purchase.

But that was then, and this is NOW:

 What’s changing?

  • Facebook has removed an advertiser’s ability to target audiences from 3rd party data providers.
  • This includes data segments from private vendors (e.g., Acxiom, Oracle Data Cloud, Epsilon, and Experian) and public categories (e.g., in-market, purchase behavior, income, net worth, and liquid assets).

 When’s it happening?

  • As of mid-August, all partner categories included under the areas noted above will no longer be available for targeting, and ads will stop delivering to these audiences.

 How does it impact franchise development now?

  • We will no longer be able to use income, net worth, or liquid assets as financial qualifiers in campaigns to reduce the amount of financially unqualified leads.

 Hot Dish’s Point of View:

  • It’s our goal to find new ways to target a financially qualified audience for franchise development, which includes identifying audiences with the same propensity for specific interests as our target that can also be layered with current tactics.
  • Facebook will still have direct access to 3rd party data, which means we can still reach audiences through Facebook’s look-alike and algorithm targeting.
    • For example, if we have a list of financially qualified leads, Facebook will use machine learning to create an audience that has similar characteristics to those leads, considering their income, net worth, and liquid assets.
  • For campaigns that are using financial qualifiers, we expect that audience reach will increase by 10 to 50%. This will likely increase the volume of leads being generated, decreasing Cost Per Lead (CPL); however, it will also decrease the ratio of financially qualified leads.
    • This could impact the volume of leads that the sales team has to interact with and call, but we do expect the number of qualified leads to remain consistent.

 What we’ve been seeing:

  • The volume of leads has increased, and we’ve seen significant declines in CPL, making it critical to continuously review lead quality, by audience targeting, to determine channel success.
  • The sales team may have more unqualified noise to sift through, but we expect to see a consistent, if not higher, volume of qualified leads.

At the end of the day, we can’t control Facebook, but we can control how we react to its changes. At Hot Dish, we know it’s our job to remain agile and proactive with the ever-changing digital realms.

Did your leads not increase due to lack of a paid social presence? Well, it’s time to consider adding Hot Dish Advertising to your marketing mix! Reach out and find out what you may be missing.


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