Facebook Marketplace sales are up and Local Ads revenue is down. Why?
Asked at
Meta (facebook)
492 views
-icon.svg){kind=icon}
492 views
492 views
How to answer Problem Solving questions
Interview Guide
Answers (1)
Access expert answers by becoming a member
You'll get access to over 3,000 product manager interview questions and answers
Recommended by over 100k members
Abhijeet Das
Platinum PM
Platinum PM
ago
Facebook marketplace sales are up, while local ads revenue is down
- How much is the sales up?
- How much is the ads revenue down?
- Did both the events happen around the same time?
- Since when is this happening? Lat one month
- Was it gradual/ sudden? Gradual
- Is it specific to any geography? India
Metrics impacted -
- Sales revenue has increased
- Ads revenue has decreased
This indicates that the sales have happened organically, without the need of pushing buyers to click on the ads.
Hypothesis 1: Buyers prefer pear to pear transactions over ad based leads
To further confirm this, we need to understand,
Did the marketplace sales came from existing users?
Did the shops from where sales happened new or existing?
Existing buyers = Atleast one purchase in the last 1 week
Existing shops = Atleast 4-5 sales in the last one week
Additional metrics -
- % purchases from existing buyers
- % sales from existing shops
If both these numbers are high, it indicates buyers prefer to purchase products from known sellers
Hypothesis 2: The local ads are not relevant. To validate this issue, we need to check -
CTR for the new ads
CTR to Purchase conversion rate
If both of these is low, it indicates that the local ads are not helpful in getting quality leads/ shops and hence people have stopped clicking on these ads.
Hypothesis 3: Was there any change in the UI or algo related to showing ads, due to which either the relevant ads are not coming at the top or the buyers are not able to see it as part of the discovery flow?
Hypothesis 4: Are small businesses reducing their ad spends, due to which there are lesser ads than before
To validate this we need to know, whether there has been an increase in the prices recently which discouraged these businesses from putting newer ads.
So, as next steps,
Short term -
Revert any product changes if done
Positioning of ads needs to improved to integrate them within the discovery flow
Long term -
Interview users to undestand their view on relevance of these ads and generate insights from that which can driver further product improvements
Educate local businesses about the RoI of ads and how can they drive more adoption by improving the quality and the relevance of the ads.
0 likes | 0 feedback
Get unlimited access for $12/month
Get access to 2,346 pm interview questions and answers to give yourself a strong edge against other candidates that are interviewing for the same position
Get access to over 238 hours of video material containing an interview prep course, recorded mock interviews by expert PMs, group practice sessions, and QAs with expert PMs
Boost your confidence in PM interviews by attending peer to peer mock interview practices, group practices, and QA sessions with expert PMs
Get unlimited access for $12/month
Get access to 2,346 pm interview questions and answers to give yourself a strong edge against other candidates that are interviewing for the same position
Get access to over 238 hours of video material containing an interview prep course, recorded mock interviews by expert PMs, group practice sessions, and QAs with expert PMs
Boost your confidence in PM interviews by attending peer to peer mock interview practices, group practices, and QA sessions with expert PMs
Top Meta (facebook) interview questions
- What is your favorite product? Why?89 answers | 263k views
- How would you design a bicycle renting app for tourists?62 answers | 82.5k views
- Build a product to buy and sell antiques.54 answers | 66.8k views
- See Meta (facebook) PM Interview Questions
Top Problem Solving interview questions
- A metric for a video streaming service dropped by 80%. What do you do?50 answers | 135k views
- You launched a new signup flow to encourage new users to add more profile information. A/B test results indicate that the % of people that added more information increased by 8%. However, 7 day retention decreased by 2%. What do you do?29 answers | 28.8k views
- Drivers are dropping out of a city on Lyft. How do you figure out what's going on?23 answers | 18.8k views
- See Problem Solving PM Interview Questions
Top Problem Solving interview questions
- Your new feature boosts Amazon Search by 10%, adds 2s to load time. What do you do?19 answers | 36k views
- There is a 15% drop in the open rate of Instagram App. You are the PM. Tell us what could have happened.11 answers | 10.1k views
- There is a data point that indicates that there are more Uber drop-offs at the airport than pick-ups from the airport. Why is this the case and what would you do within the product to change that?10 answers | 22k views
- See Problem Solving PM Interview Questions
