Facebook’s new ecommerce policy: 5% cut on transactions, full control over your funnel

– Facebook will start taking a 5% cut on transactions made through checkout on Facebook or Instagram starting in June.
– Facebook’s algorithm will determine whether to send traffic to ads that allow for checkout or ads that don’t, based on the average cost of customer acquisition (CAC).
– Opting into Facebook commerce gives Facebook full control over the sales funnel without providing data or understanding of the quality of traffic shown to ads.Figure out a way to audit the quality of traffic your driving beyond the default KPIs.Facebook just notified its ecommerce users that starting next June, they are going to take a 5% cut on any transactions happening through checkout on Facebook or Instagram. Facebook is hell-bent on maximizing revenue. Let’s play this out. Now Facebook has an either-or scenario – it’s genius. If your current average CAC on your account is greater than 5%, they will send traffic to ads that don’t allow for checkout. If it’s less than 5%, they will send traffic to the ads that are best suited for purchase from within Facebook or Instagram. There is literally no possibility you will know what their algorithm is programmed to do. Let that sink in, opting into Facebook commerce is giving Facebook FULL CONTROL OVER YOUR FUNNEL WITHOUT GIVING YOU DATA OR UNDERSTANDING AND NO CHECKS ON THE QUALITY OF THE TRAFFIC THEY ARE SHOWING YOUR ADS TO. Is Facebook necessary for your ecommerce business? I currently don’t see a way around it. But it’s a tool like any other, and with any other tool or employee, you’d be checking on their process and work product, except with Facebook, all of how they do things is proprietary. Meaning you’ll never see their algorithms or how they are set up. If I had to give advice to any ecommerce company right now, it would be to figure out a way to audit the quality of traffic you’re driving beyond the default KPIs we’ve been trained to use, which are questionable at best. I’ve edited the post from January to June to reflect Facebook’s website. Either way, it’s happening. #ecommerce #marketing #datahttps://www.linkedin.com/in/jivanco

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