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We’ve gone days wondering why ads that you typically expect to perform extremely well tank for hyperlocal apps.
If you’ve been in a similar situation, we have some tried and tested hacks for you.
In this episode, we explain why Meta likes to penalize hyperlocal ads – and we also share some strategies to mitigate the impact of this penalty.
Check out this episode for more.
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FULL TRANSCRIPT BELOW
One category of apps that we’ve seen to be hugely problematic in unlocking growth is hyperlocal apps. These are apps that offer local services – and require targeting of local audiences.
Some of the apps we’ve worked with that fall into this category include food delivery, restaurant reservations, local jobs, and local laundry – among others.
For categories like these, you have to target only users who are in specific geographic regions – and not national audiences.
The problem? Meta’s algorithms don’t play nice when you target hyperlocally. If you’re targeting audiences that are not national, you will immediately see very high CPMs, very low CTRs, install rates and conversion rates compared to national campaigns.
Combine this with Apple’s privacy threshold/crowd anonymity challenges that we’ve talked about in other episodes – and you find yourself with big problems.
Oftentimes you may wonder if your unit economics are completely off – and if your campaigns are just not working – when in fact there is no problem with your offer, your product and your creatives – it’s just that the algorithms just don’t like your hyperlocal audience.
How do you fix performance problems stemming from your targeting a hyperlocal audience? There are a couple of things you can do mitigate performance deterioration from targeting hyperlocal audiences:
Target groups of cities rather than individual cities.
The reason why algorithms don’t like hyperlocal campaigns is because algorithms want large audience sizes – because Meta’s algorithm wants a large enough pool of users from which to pick payers and converters.
So: if you can’t go national, what you can still do is combine multiple cities in a single campaign. Based on our experience, once you go over 4-5 million users in a single ad set’s audience, your performance deterioration is significantly mitigated(although not completely so). In fact, for a campaign that we ran to target only NYC, we saw almost no performance deterioration.
So: running 1 campaign targeting 5 cities is much better than running 5 campaigns – each targeting 1 city.
Run national campaigns anyway.
Another strategy you can use is to run national campaigns even if you don’t service all parts of the country.
How do you avoid getting users who can’t use your product?
In the first screen of your onboarding experience, you ask them for their email ID and zip code. If they are in a zip code that you do not service, you say: “oh no. we’re not in your area yet – but will be soon. We’ll send you an email as soon as we’re in your area.”
This way you have their email address – and you only allow users in your operational areas to use your app.
Another related strategy can be to optimize your national campaigns for a downstream event(say purchase) – which cannot be accessed by users who don’t get past your first screen where they are asked to enter their zip code.
With the delta in CPMs, CTRs and install rates being as substantial as they are between national and local campaigns, you may find it worthwhile to run national campaigns even if not everyone from the campaigns can use your product.
Don’t run Meta ads at all. 🙂
Meta’s algorithm is the most drastic when it comes to penalizing hyperlocal apps – we’ve seen that other platforms aren’t nearly as bad in penalizing hyperlocal apps.
So: another strategy is simply to go to channels other than Meta until you have enough of a critical mass of audience(ideally 4-5 million) to make Meta work. Some options you can consider are:
- TikTok: The TikTok algorithm is much more sensitive to creative performance than it is to audience size.
- Google UAC & search: Although Google has its own issues due to its reliance on Firebase for measurement, there isn’t as much performance loss with small audiences. In fact, if you’re on Android, you might see very strong performance even with small audiences.
- Apple Search: Again, almost no impact of audience sizes on performance – although you’ll see that you only have access to very limited volumes with this.
- Taboola, Outbrain and native content: These channels have shown very strong performance for local targeting – and this performance is likely improved by the fact that they rely on probabilistic/fingerprinting for optimization.
- Local influencers: You can work with local/city-level influencers – although of course there is nothing to prevent them from reaching national audiences.
- Snap: While Snap hasn’t been a strongly performant channel for most products we’ve worked with lately, it still tends to outperform Meta for small hyperlocal audiences.
All of the above channels haven’t as much scale as Meta can unlock – but these can certainly offer performance while you’re at small levels of scale in a limited number of markets until you’re ready to scale to significant audience sizes.
A REQUEST BEFORE YOU GO
I have a very important favor to ask, which as those of you who know me know I don’t do often. If you get any pleasure or inspiration from this episode, could you PLEASE leave a review on your favorite podcasting platform – be it iTunes, Overcast, Spotify or wherever you get your podcast fix. This podcast is very much a labor of love – and each episode takes many many hours to put together. When you write a review, it will not only be a great deal of encouragement to us, but it will also support getting the word out about the Mobile User Acquisition Show.
Constructive criticism and suggestions for improvement are welcome, whether on podcasting platforms – or by email to shamanth at rocketshiphq.com. We read all reviews & I want to make this podcast better.
Thank you – and I look forward to seeing you with the next episode!