Stop leaving money on the table by testing only 4 Ads

How often have you heard this? “We A/B test our ads now so that we can optimise our marketing campaigns.” Unfortunately, the next sentence usually goes like this: “We’re now running 4 different Ads.” Because A/B seems to imply that you’re testing only two variants against each other. Having 4 ads seems plenty, therefore.

In the meantime, however, the guys over at Ad Espresso have analysed 37.259 Facebook Ads in 2015 and found that the most successful companies run over 100 Ads at any given time.

I see this happen over and over again, even with experienced advertisers, even though running only 4 ads costs you so much money in the long run. Here’s why:

Reductive View of the Audience

You probably don’t believe that your audience is made up of only 4 types of people. So why would you assume 4 ads could cover all the interests, needs, dreams and selling points of your entire audience?!

Say, you’re a fashion brand and for your campaign you have a very specific audience: single women in Austria’s major cities between 24 and 27, who have just finished university, and who are interested in both your brand (and its immediate competitors) and the designer of your newest collection. This is a very well-defined target group, and there’s a number of reasons why such an audience might be highly relevant for you.

Now tell me with absolute confidence: what is the single thing that makes these women buy from your brand?

(If you can, please tell me!)

Few Optimisation Options

With only 4 ads there’s only so much optimisation you can do. You can change a few variables like how much you want to bid. You can change whether you bid by Click or by Impression. You can turn off a few ads, if they’re not performing as well. But then your audience will soon tire of your ads, because they keep seeing the same two variants over and over again.

(c) Sanjib Sarkar

On the other hand, the more ads I have, the more options I have to optimise my campaigns. Think of it like comparing a melodica with a Steinway Grand Piano — you simply cannot expect them to give you the same results.

Having few options for optimising your campaigns combined with the inherently reductive view of the audience means that any reporting you do, will have very little actionable information, which just makes things so much worse.

Optimisation is a Game of Diminishing Returns

Even with hundreds of ads, 10 different interest targetings, 5 different landing pages, fine-grained re-targeting, there’s a limit to how much you can optimise your campaigns. In some cases, optimising beyond a certain point can even seriously hurt your long term success.

One if the reasons is that most people playing the optimisation game are optimising for the local maximum — so while your conversion rates might be slowly improving you might be climbing the wrong hill.

(c) https://www.mathsisfun.com/algebra/functions-maxima-minima.html

If you’re only running 4 ads in each campaign, you have no way of knowing whether you’re optimising for the local or the global maximum.

Optimising beyond a certain point can seriously hurt your long term success.

The real game is insights

The real name of the game is not incremental optimisation but insights. The biggest companies are not data-driven, but insights driven.

Take airbnb: They tested different designs for the star-button, which let you save listings for later. Then this one designer comes up and changes it to a heart — and the usage of the button explodes. Now, they could have just optimised the size, and colour, and form of the button, to get even more people to click on it. What they did instead was try to understand why this was happening. What changed in peoples’ minds when they saw a heart button; and they realised that there was this untapped aspirational need of their users, to travel and discover the world right from their computers. That insight ended up changing the entire direction of the company and moved them from search to social.

Few marketing campaigns will ever have such an impact on a company. But while optimisation is a game of diminishing returns, insights can (and will) help you make creative leap that increases your conversion rates much more.

The good news

Beware, here comes the part where I shamelessly promote myself ;-)

Because the mistakes described here are so widespread, spending even a little bit more deliberation on your testing and your insights, you can generate a huge advantage over your competition. So if you want to know more, write me at martin.prechelmacher@unique.at — we’re a social-first digital marketing agency based in Vienna.