Escaping UGC Fatigue: Unlocking Consistency with Catalog Ads (Episode 1)

Welcome to The Catalog Cult, where we uncover innovative strategies to optimize catalog advertising for e-commerce brands. In today’s episode, host Dan Pantelo, CEO & Founder @ Marpipe, explores the rising problem of UGC fatigue and why it's time to rethink your reliance on user-generated content (UGC). Instead, Dan highlights the power of Dynamic Product Ads (DPA) and enriched catalog ads to drive better ad performance and consistency.

Key Highlights:

1. The Problem with UGC Fatigue

• UGC has lost its novelty, and consumers can now easily spot it as an ad in their feed.
• Over-reliance on UGC creates volatility in ad performance due to creative fatigue.
• While UGC still has its place, brands must diversify their ad formats to stabilize results.

2. Why Dynamic Product Ads (DPA) Outperform

• DPA delivers personalized, highly relevant ads directly to consumers based on their browsing behavior.
• Unlike UGC, DPAs don’t experience creative fatigue and offer consistent performance over time.
• Meta’s data shows that catalog ads often outperform image and video ads in terms of CTR and ROAS.

3. Enriched Catalog Ads for Better Branding

• Tools like Marpipe allow brands to incorporate creative elements into their catalog ads, including branding, sale overlays, and testimonials.
• Enriched catalog ads drive higher click-through rates and return on ad spend compared to plain catalog ads or UGC.

4. Scaling Across Platforms Without Localization

• UGC requires tailored content for each platform (e.g., TikTok vs. Meta), increasing costs and complexity.
• DPAs, on the other hand, use the same product catalog across platforms, ensuring consistent performance without additional creative investment.

5. Performance Data: UGC vs. Catalog Ads

• Data from 650+ ad accounts shows:
  • Image and video ads: 2% CTR and 4x ROAS on average.
  • Plain catalog ads: 2.26% CTR and 6.8x ROAS.
  • Enriched catalog ads: 2.4% CTR and 8.1x ROAS.

Want to elevate your ad performance and break free from UGC fatigue? Subscribe to The Catalog Cult newsletter for actionable insights and strategies. Sign up here: https://www.marpipe.com/newsletter-sign-up-page.

This episode is packed with insights to help your e-commerce brand thrive by moving beyond UGC reliance. Learn how catalog ads can stabilize your performance, enhance your branding, and drive better results across platforms. Tune in now!

Transcript

0:00

The problem is that everyone's already UGC fatigued. We can recognize UGC when we see it. It's not a surprise anymore. Right? When someone sees a piece of UGC in their feed, you're not tricking them into thinking that's regular content in their feed anymore. Welcome to the Catalog Cult where we unlock the secrets of dynamic ads strategies and the world of catalog advertising. I'm Dan Pantelo, your host and the founder of Marpipe. On today's episode, I'm going to take a deep dive into something that's been on my mind a lot. It's the flaws that we're seeing in UGC ad strategy. People started using UGC really during the heyday of when venture backed direct to consumer brands started to grow, right? So the Casper's and the Warby Parker's and the Allbirds of the world where, VCs were pouring hundreds of millions of dollars into these DTC startups, and they would spend it all on Facebook ads right away. They were just giving the money right to Facebook. And the format really rose to prominence there and then really accelerated when TikTok came along. The whole idea is like UGC was novel. It was like the social, creative, where it's we're not going to do like nice, like commercials, like hyper, like what you would see on TV. We're going to just like. Have someone shoot things on their iPhone. And the idea is that like, it should feel like regular content in your feed. The problem is that everyone's already UGC fatigued. We can recognize UGC when we see it. Like it's not a surprise anymore. Right? when someone sees a piece of UGC in their feed, you're not tricking them into thinking that's regular content in their feed anymore. And so the novelty. And the social proof that comes with being incognito in the feed and not being noticed as an ad. It's like ads trying to not look like ads. That, that has gone away. So it's we used to see it before, but now we have banner blindness to UGC when we see it, it's really easy to recognize. You should not stop doing UGC if it works for you. UGC has a place in your ad account. and you should continue to test and experiment with it over time. I'm just saying you shouldn't put all your eggs in that basket, right? You should have multiple different major formats that you run and lean on. And we see too many accounts that lean on this boom and bust cycle of UGC, where you find a winner, you scale the hell out of it, and then tomorrow it sucks, and you're scrambling, right? And there's this volatility that's created in the ad account from that, right? And it's because you're relying on just one major ad format, you can expect that volatility to continue. But with with ad accounts that rely on DPA mostly, right? They're much more consistent because DPA doesn't hit creative fatigue. DPA is not like an ad trying to not look like an ad it's very obviously an ad, right? Like it's here's the product and the price, right? The reason it works really well is because the delivery is amazing, right? Facebook knows exactly what products everyone is searching for. And it's in a really good position to show you the thing you want at exactly the time that you need it. If somebody is making, a UGC video talking about like an unboxing video for our brand and I got this like cool little kit that has some of your best sellers. You make a UGC ad that's more of a general branded ad. Maybe you're highlighting a product or two, right? The algo reads it and will serve it to people who they think will probably buy the product. But when you upload your product catalog, and let's say you have, I dunno, like pair of brown leather shoes that are$77, that are on sale right now,$5 off. They're very similar to something you're already looking for if you're searching for like those brown shoes. The ad platform will look at all of the other product catalogs that are connected to it. Like all the product catalogs that exist in Facebook world and it'll find the most similar products, on Amazon, when you see like the products, you might also like section where it's like showing you a bunch of almost identical products, but just at various different price points and there's a few different features, right? Facebook will look at all of the other products that are very similar to what you're looking for. And they'll serve it to you at the time that you're looking for that exact thing at that price point in your size in your area, whatever it might be. So the delivery system, algorithmically, the way that DPA gets delivered is totally different than how UGC gets delivered. It's almost like two, two different ad platforms, in terms of delivery if you haven't tried DPA and you haven't experimented with that delivery format, right? Like you have no idea how well, like how well almost this other ad platform within Facebook could be performing for you. Another problem with UGC is that it does need to be localized to the ad platform, right? So like the UGC. That works well for you on Meta is not also going to work well for you on TikTok and it's not also going to work well for you on snap. These different ad platforms require their own localized genre, almost of UGC, right? And marketers know that, right? It's if you're making UGC for TikTok there's a, there's certain way you speak certain way you videotape things, and it's different for meta. It's different for snap. And so that's another big problem here where it's like with DPA, you're uploading the same product feed to all the platforms. There's no like localization required. So not only is it like, more of a consistent performance, but it's also, it's the same product, it's like the same input across all the platforms. There's no variability there you plug in the same product feed to TikTok, to Meta, to Snap, and it will deliver and serve and run your product ads, your catalog ads. If you're nervous about, moving away from UGC as a thing you lean on you should not make the drastic step to offboard yourself completely off of UGC, right? You should continue to experiment with it. I'm just saying you shouldn't rely on it as the main thing. Like those different forms of storytelling about your brand and stuff, you should still have those. But if the question is about performance, catalog ads on average, for brands that have like a decently sized catalog of like maybe a few hundred SKUs or more regularly blow video and UGC ads out of the water in terms of performance. People who run catalog ads, can attest to this, but we actually, like in terms of data points, we actually, we have this on our site we have a little over 650 ad accounts connected to Marpipe and we're able to run analytics where we look at all of those ad accounts, they actually, the ad accounts that we're connected to, and we can look at account for about 1 percent of all ad spend on Meta. We're able to run analytics and see okay, how do video and image ads perform versus plain catalog ads? And you would think. Like you're like, the concern is valid, right? Where it's okay, I'm doing something way less creative, way more simple, that's not storytelling about my brand. That's not, social proofing with my customers. How could it possibly, how could product pictures possibly perform better than all of this stuff, all this work I'm doing, but the fact is that when we look at 650 ad accounts, right across all different types of brands, like you have like apparel, jewelry, furniture, right? Like all of it, like all these brands you can imagine, right? Image and video ads on average have a 2 percent CTR, right? Across this is across all of the ads, right? There's a 2 percent CTR on image and video ads and a 4 ROAS. Whereas plain catalog ads have a 2.26 CTR and a 6.8 ROAS, right? And so in terms of click through and in terms of return, catalog ads on average across 650 ad accounts are just substantially better. So this fear that, if I start doing less creative things, my performance will go down, with catalog ads, it's oftentimes the other way around, right? People are surprised to see wow, I'm getting more clicks on just boring product images. Yeah, because the delivery system is so much better than what you're getting with UGC. The numbers that I just gave you for CTR and return are just for plain catalog ads. But when you look at enriched catalog ads, which is when you use Marpipe make them look better and incorporate creative. so not raw catalog ads, but enriched catalog ads. The click through rate on those across 650 ad accounts, click through rate on average is 2.4 CTR, right? That's compared to just a two flat for image and video. And then in terms of ROAS, it's an 8.1 on average enriched catalog ads. 8.1 ROAS, whereas for image and video ads, it's four flat on average. Now, again, this is we're looking at meta ad accounts, and we're looking at in platform attribution, right? I know Meta can tend to over report things, and some people look at different attribution platforms to get their performance data. But these are directionally, right? Thanks Like these are like large, we're looking at a lot of data. And so directionally, these trends and these numbers are more or less the type of difference most people can on average expect to see in performance there. Obviously when you incorporate creative into catalog ads. It makes them perform better. And as a matter of fact, like our biggest source of new business, like the number one way that we get, like most of our customers is oftentimes it's so simple. It's we just show brands what their catalog ads look like. Like it, nothing makes a creative director or a CMO cringe more than seeing their catalog ads out in the wild in the public. Like they don't like to see it because it doesn't look good. Like it'll maybe it's performing well in the ad account and you're scaling it. But we'll just take a screenshot of it and we'll email it to them. And I'll be like, this is what your catalog ads look like. Are you happy with this? No, one's happy with it. So like you want to have brand control, at the minimum, you're spending all this money to serve all this creative to people when they're running catalog ads and it doesn't even have your branding. Like at a minimum, you're just like, you're wasting, you could be getting some brand recognition and some brand lift out of that, right? Like at the very minimum, put your branding in there, put like a logo and some brand colors or something, right? That's the bare minimum, right? That's where it just that's table stakes. That's where we start. But then like beyond that, obviously you want to bring in things that are relevant to what the customer is looking for. It was getting served this catalog ad wants to see if you're running a sale, that should be like really clear in the creative itself, right? Not just a product image. It should be like, this is on sale, right? So then there's bringing testimonials, right? Bringing, brand copy that you already know works well for you into your catalog ads. Obviously that's going to lift performance than just not having it, right? And so with catalog ads, using a tool like Marpipe to put creative into your catalog ads and make them like look good you're able to maintain this like level of brand control that's really precise. Because the way that a tool like Marpipe works is you plug in your product catalog. You build templates you don't have to use gen AI. We have gen AI tools if you want to play around with those. But you definitely lose some brand control when you incorporate gen AI, right? And so if you want to maintain complete brand control over what all of your catalog ads the thousands of ads in one campaign are like doing out there in the world. Then using a tool like Marpipe gives you complete creative control, complete brand control. Whereas with UGC if you're spraying and praying with UGC, you're getting a bunch of people saying a bunch of stuff about your product. Like maybe something's on, on brand, maybe some things are like, not what you want to present as a brand. And so you see when you see these really big churn and burn UGC machines that brands can spin up internally. You'll get a lot of stuff, like maybe some of the stuff that works is something that your CMO, actually hates, right? This happens all the time where it's man, the UGC that really popped it's something that we don't necessarily as a brand. Like we don't like this video. We don't think it represents our brand, but it's performing the best. And so you end up in these conundrums all the time that you just don't get with catalog ads. Like you don't have to wrestle with Oh, the thing that popped off is like something that we're not, we might not necessarily be comfortable with or that we love to present as like our first, as our first foot forward you could just maintain a lot more brand control when you put creative in catalog ads and you don't necessarily have that when you're just like spitting out tons of UGC that you're not making or producing. So when it comes to attribution, one of the things that made that is making catalog ads work a lot better today is the rise of in platform shopping, right? So if you have Meta shops or TikTok shops set up or you have like Meta pay or Shop pay that's connected to your Shopify, right? You're closing the signal loop. When people buy products, right? The platform can see exactly what's being bought. Whereas when people go off into your website, and post iOS and all of that there's signal loss that happens. When you run UGC to send people to your website there's this element of signal loss that occurs. When you're running catalog ads and you also have a very active Meta shop, then that actually reinforces the effectiveness of your catalog ads because Meta shops is picking up all this signal about what people are shopping for on, like on your Meta shop. and it's using that to inform how the catalog ads get delivered, right? So if you are leaning into Meta shops and TikTok shops, which you should be cause they're pushing everyone there. It's just going to help your algo. If you have that set up and you're seeing conversions flow through there that's just like wind at the sales of the effectiveness of your catalog ads. It closes the attribution loop, which increases signal, which increases performance. And so it's a self reinforcing cycle. That's why advantage shopping plus campaigns do so well today. Especially when they're driving to TikTok or Meta shops. So because you have this sort of, this more closed loop ecosystem that like is all powered by your catalog, the catalog powers, your catalog ads and your meta shop and your TikTok shop powered by the same thing, closed loop, better signal, better performance. The real unlock is like prospecting with catalog ads, like how do you can you introduce someone to your brand and have them buy something from you and use catalog ads as a method of discovery. New customers who have never bought anything from you versus UGC and this is like a common misconception or most people think I can't possibly run an effective prospecting campaign with just pictures of the product, right? That's no way to introduce a brand to somebody, but actually this is very wrong. Because so many effective prospecting campaigns are actually just DPA. You're at that moment of intent, you're about to buy, you're clearly shopping for something you're clicking around product pages. Meta knows that it's the perfect opportunity to introduce you to. Similar, very similar things that you, that you might veer off course and oftentimes people do and try something else. And so when the delivery is correct, you don't need to rely on this sort of brand storytelling to introduce people to your brand. You really lean on, on the power of the product itself. It's really similar to that Amazon page, right? The most A B tested page on the internet is the Amazon product page. Okay? That is A B tested through hell and back. There's a reason why on that product page so much real estate is dedicated to showing you other similar products. Amazon doesn't need to tell you the brand story of the other products that are very similar to one you're already looking at. The product does the work and carries that and actually that section is a massive vector for introducing people like for essentially for prospecting for these other brands, right? So yeah I would just dispel this notion that You can't do effective prospect like UGC is needed for prospecting and you can't do it with DPA. No, matter of fact, DPA can be a lot better at prospecting. Actually

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that's it for today, for our episode of Catalog Cult catalog ads are hard. A lot of people have a lot of questions about it. It's not as simple as we might make it seem when we break it down here, so if you ever have any questions, need any help, you don't need to be a Marpipe customer to go to marpipe.com and hit us up for any help. Or just message me on LinkedIn or Twitter you can also keep up with us on our newsletter, the catalog cult you can find a link to that in the show notes. thank you guys for listening.