How can you increase Facebook ads budget and stabilize good ROI?
When advertising, we often encounter this problem: in the product testing phase, spend 20 to 100 US dollars on Facebook every day, ROI (or ROAS) is stable; but as long as you increase the advertising budget (whether it is ad group budget or campaign budget) ), the effectiveness of advertising dropped immediately.
To successfully transition from $50 a day to $500 in advertising expenditures, the following are tips for effectively expanding Facebook’s advertising budget.
Q&A
Q: How to evaluate whether the campaign is suitable for increasing the budget to bring more conversions?
A: It can be judged by viewing the frequency of advertising activities in Facebook Ads Manager: Set the reporting period to the past 30 days, select the “Delivery” report, and then view the frequency of each advertising activity.
1) If the frequency is less than 3 points-it indicates that the advertiser still has room to adjust the campaign budget
2) Frequency between 3–6 points-means that advertisers may get more customers when adding extra budget, but CPR may be slightly higher
3) The frequency is higher than 6 points-it means that advertisers should not invest more money in this advertising campaign, because even if they invest more money, they will only contact the same person multiple times
If your campaign is already appearing frequently, you should consider other strategies, such as expanding your target audience or adding new creatives to your ad set, which we will introduce in a future article. However, if the campaign frequency is low and you want to get more customers by expanding your budget, then the following four methods will help you.
1.A small increase in Facebook’s advertising expenditures
A small budget increase of 10%-20% for Facebook ads every 4–7 days can often achieve better results. However, to use this strategy, you must first ensure that this Facebook campaign is profitable.
Why does this method have better results?
Because each ad group will learn from its performance and retain data. When you increase your budget by 10%-20%, this is considered a relatively small change to your ad group, so the ad group retains most of the data and lessons learned from the initial stages of running the campaign . This helps keep your performance relatively stable compared to the larger changes that force the ad group to lose all initial data.
In this process, you should use ADCostly to view the Facebook ads cost benchmark, compare the benchmark data with your own product costs, and ensure that the ads are in a profitable state.
How to calculate CPC, CPM, CPA, ROI, Roas of own advertising?
You can use the following two Google plugins to quickly calculate:
2. Expand the audience size
To expand your advertising budget to more than $50 a day, the first step is to rethink the size of the audience you target. From small, carefully selected audiences to larger and broader audiences, your Facebook Pixel will provide more opportunities to find new customers.
1) Expand similar audiences
If you have a certain precise audience, using ADCostly in Facebook ads to find groups similar to the existing ones and expand the audience size is one of the best ways to find new customers on Facebook.
If you have a customer list and upload a sufficient number of audiences for successful matching (generally 1,000 samples or more are required), a 1% similar audience based on the customer list is a very effective way.
Small Tips: If the advertising time is longer, there will be audience fatigue: advertising effectiveness slows down. This happens when most audiences have seen your ad and no longer feel fresh; this indicates that you may The audience saturation point has been reached, and signs include high frequency, CPM increase in cost-per-thousand impressions, and CTR decrease in ad CTR.
Although the 1% lookalike audience contains some of your best potential customers, expanding to 3% to 5% of the same audience will expand your budget without making the audience tired. If it succeeds in 1% of similar audiences, Facebook Pixel will accumulate a certain amount of valuable data. The Facebook algorithm can be used to find a larger audience and find more likely customers to personally guarantee the follow-up effectiveness of advertising.
2) Expand interest-based audience
The above mentioned that the ad frequency is higher than 6 points, which means that the target audience has seen your ad many times. Therefore, increasing the budget for this campaign will mean that the same person will see more of the same ads, which will only increase customer disgust.
At this time, advertisers can quickly expand their target audience by adding more relevant interests in the “Detailed Targeting” section.
What is the size of a good interest-based audience?
It is recommended not to shrink it too much. Although the number of “custom” and “lookalike” audiences is small, too few interest-based audiences can hurt the learning phase of the ad group. Therefore, it is recommended to keep the target audience based on interest to more than 20,000 people.
Finally, the following three or four campaigns can be subdivided for the above similar audiences in practice:
Group 1: 1%–3% similar audience of paying customers, 1% similar audience of potential customers
Group 2: 4%–6% lookalike audiences of your paying customers, 2%–4% lookalike audiences of your potential customers, and some highly relevant interests (such as authors, associations, etc.)
Group 3: 7%–10% lookalike audience of paying customers, 5%–7% lookalike audience of potential customers and the remaining interests
In each campaign, use CBO to set a budget, and then close ad groups or poorly performing ads.
The following is the interest I found through ADCostly, which is very helpful for audience expansion.
3. Use CBO to automatically allocate advertising budget
In the past, advertisers set Facebook’s budget at the ad group level. A year ago, Facebook launched CBO, which can set a budget for advertising campaigns instead of setting up each independent ad group within the campaign.
So far, many advertisers have shown that CBO can indeed perform well when trying to expand the daily budget to more than $1,000 during the expansion process. At the same time, CBO is particularly effective for the following two situations:
Target multiple ad groups that already know the precise audience
The ads performed well in the early stages of the test, and the link click rate exceeded 2%–3%
4. Use Facebook automation rules to set budget increase/decrease
1) Automatically increase
By using Facebook automatic rules, you can create a custom rule that automatically increases the budget by x% when the ad group meets certain conditions.
For example, you can set the following rules:
In the past 3 days, the cost per conversion of IF and ad group was below a certain amount
If the creative set has achieved at least 50 conversions in the past 3 days
Then increase the ad group budget by 20%
Never exceed a certain amount of daily budget
Run automation once a week
2) Automatic reduction
Similar to stop-loss orders in stock trading, if an ad group stops providing positive conversions, it can automatically reduce its budget using automated rules.
For example, if the cost per search result exceeds $20, you can tell Facebook to reduce the ad group budget by 20%.
In the following example setup, if the ad group only spent two purchases or less purchases and spent more than $100, the ad set’s daily budget will be reduced by 25% (check once a day).
Finally, there is always considerable risk when expanding any part of the business, and the same is true for Facebook advertising. Increasing your daily spending without getting a positive return is scary when you think about it, especially if you have never expanded paid advertising.
However, the potential for increased sales, faster inventory turnover, more customers, etc.-means that the attempt to increase advertising spending is often worthwhile. The best way to mitigate these risks is to follow the above strategies so that you know where the extra advertising budget is spent.
