No, Seriously. Facebook's New Algorithm Just Changed Everything

Understanding the Impact of Facebook's Andromeda Update

Overview of Current Challenges in Facebook Advertising

• The speaker asserts that Facebook ads are becoming increasingly difficult, supported by data from numerous brand owners experiencing erratic return on ad spend (ROAS).

• Acknowledges a significant shift in advertising dynamics post-Andromeda update, prompting an analysis of over 100 brands to identify core issues.

• Highlights the confusion among brands regarding performance drops, attributing it to a lack of awareness about changes initiated six months prior.

Data Analysis and Insights Post-Andromeda Update

• Presents extensive data analysis showing shifts in ad placements and spending patterns across various platforms since the Andromeda update.

• Discusses placement share by month, noting that while Facebook and Instagram feeds remain dominant, there is a slight decline observed.

Significant Changes in Ad Placement Performance

• Analyzes percentage changes relative to January 2025; Instagram Reels shows remarkable growth post-update, increasing by over 38.86%.

• Contrasts this with rising costs for traditional placements like news feeds and stories, which have seen substantial CPM increases.

Cost Dynamics Across Different Ad Placements

• Details how costs for Facebook and Instagram feeds rose significantly (24.3% increase), while Instagram Reels experienced a decrease in cost despite overall market trends.

• Emphasizes that while other placements' costs surged, Instagram Reels became cheaper—indicating a unique opportunity for advertisers.

Strategic Implications for Advertisers

• Suggests that advertisers must adapt their strategies due to algorithmic changes affecting user behavior and ad placement effectiveness.

• Warns against overly simplified or overly controlled ad accounts; both extremes can lead to poor performance under the new algorithm.

Importance of Control in Ad Accounts

• Stresses the necessity for advertisers to maintain control within their accounts through proper campaign structuring and exclusions to navigate current challenges effectively.

Ad Spend Strategies for Audience Types

Understanding Audience Types in Ad Spend

• The chart illustrates ad spend categorized by three audience types: new audiences (first-time customers), engaged audiences (those who have interacted but not purchased), and retention (existing customers).

• The purpose of Facebook ads is to drive profitable net new acquisition, highlighting concerns over overspending in certain areas without control.

Analyzing Spending Patterns

• Data from January 2025 shows a total ad spend of $50 million across various brands before implementing a new system.

• Brands often overspend on engaged and existing customers; the data reveals significant spending on engaged audiences compared to prospecting efforts.

• After implementing the system, there was a noticeable drop in engaged spending while maintaining customer acquisition levels.

Implementing Control Over Ad Spend

• By regaining control over ad targeting, brands can reduce overall spending while still acquiring new customers effectively.

• In December 2025, despite lower spending on existing and engaged audiences compared to the previous year, prospecting spend remained stable with only a minor difference.

Key Campaign Strategies

Prospecting CBO Campaign

• A singular prospecting campaign with multiple ad sets ensures guaranteed spend for new creative launches within a controlled budget environment.

Creative Grouping by Avatar and Concept

• Group creatives based on avatars and concepts to enhance targeting effectiveness; this approach allows for better management of budgets at the ad set level.

Retention Campaign Necessity

• It's crucial to separate existing customers from new ones; overspending on repeat purchases should be avoided as these customers are already acquired.

Optional Retargeting Campaign

• Establish clear criteria for retargeting based on engagement levels; if engagement costs approach those of prospecting, it indicates potential overspending.

Understanding Instagram Reels and Ad Targeting

The Shift in Algorithm and Content Delivery

• The surge in Instagram reels indicates a shift from traditional algorithms to a "for you" algorithm, similar to organic social media dynamics.

• Ads now operate like organic content; they are served based on user engagement rather than strict interest targeting or lookalikes.

• Brands should focus on specific avatars using tailored templates for their ads, ensuring that each concept targets a distinct audience effectively.

Scaling Ad Performance

• It's crucial to create multiple iterations of successful ad concepts aimed at specific avatars, as performance can vary significantly across different audiences.

• Instead of pausing underperforming ads prematurely, brands should allow ads that meet or exceed target KPIs (Key Performance Indicators) to continue spending.

Maximizing Return on Investment

• A strategic approach involves allowing high-performing ads with lower returns to scale if they contribute positively towards overall account growth.

• Each ad concept's unique performance contributes collectively towards achieving the desired profit metrics over time.

Opportunities for Brands Seeking Growth

• Brands spending $20,000-$30,000 monthly and feeling lost due to algorithm changes can apply for personalized audits through moonlighters.com/apply.

• For those not yet at higher spending levels but seeking guidance, joining a community for coaching and consulting is available at school.com/fas.