Meta Offers New Insights into the Advantages of Broad and Narrow Ad Targeting

Given the more recent constraints in audience data harvesting as a result of Apple's ATT upgrade, this is a relatively helpful study finding from Meta.

Today, Meta released a new analysis comparing the efficacy of broad, demographics-based targeting for CPG ad campaigns to interest targeting tactics, which are more tuned in on specific audience elements but intrinsically more limiting. Which one performs better, then, depends on how interest targeting is used, and according to Meta, 'over narrowing your audience via interest targeting can considerably impede campaign performance.

Given that you now have fewer data possibilities for such, this appears to be a positive outcome for Meta's ad options, right?

The actual analysis is a little more sophisticated than this — to evaluate the success of broad versus restricted ad targeting, Meta looked at 50 CPG ads in EMEA, which were measured using Facebook Brand Lift, which is a metric for assessing relative ad performance.

The study discovered that in around half of the efforts, the chosen interest audiences were too narrow, limiting reach in comparison to the demographic audience. For the same money, demographic audiences produced nearly double the reach (+99 percent) over interest audiences in this scenario (where selected interest audiences were too restricted). As a result, demographic targeting that is unaffected by ATT is preferable. Meta's commercial interests get a thumbs up.

When you dig a little deeper, the results are quite logical – when using interest-based targeting rather than broader demographic targeting, the results must be significantly better to justify the more limited reach (i.e. you're reaching fewer people, but if they spend more overall, the reduced brand awareness benefits are offset by stronger direct response).

The data from Meta reveals that this isn't the case in most cases:

While focusing on more particular audiences can yield better results, on a per-person basis, a larger reach delivered better results the vast majority of the time, because reaching more individuals through more general targeting extended brand messaging and helped reach even more interested users. Of course, a lot of it boils down to how well you understand your target demographic and how effectively you use interest targeting. More particular emphasis can create much higher campaign results for those with highly sophisticated interest-targeting procedures.

As you can see in this graph, interest targeting performs better for lower-funnel campaigns – so while reaching a larger audience is better for brand awareness, focusing on more detailed interest categories can improve direct response if you have a more specific goal in mind and more audience insight. That's understandable. In the early phases, you should reach out to as many individuals as possible to raise awareness, while in the later stages, more sophisticated targeting based on previous learning will help you achieve greater results.

In essence, it's an obvious conclusion, but Meta argues that many organizations focus their ads too narrowly too early, when reaching a larger audience is generally preferable, since it allows you to maximize both brand awareness and reach.

Again, depending on data constraints, this is a positive outcome for Meta, and it could assist guide your ad targeting process by taking a broad perspective early on and then limiting your campaign focus based on reaction.