The Scaling Method I Wish I Knew Sooner (Meta Ads Tutorial)
Summary
TLDRIn this video, AA shares a crucial Facebook advertising strategy for maintaining profitability while scaling campaigns. They explain the pitfalls of the 'Highest Volume' bid strategy and advocate for setting a 'Cost per Result' goal to balance budget and conversion efficiency. AA also provides a practical calculator for determining the optimal CPA target and discusses the 'Evergreen effect' for long-term campaign success. The video is a must-watch for advertisers seeking to scale their campaigns profitably.
Takeaways
- 📈 The video discusses a strategy to maintain profitability while scaling Facebook ad campaigns, which is crucial as increasing budgets often lead to diminishing returns.
- 💡 The presenter, AA, shares personal experience from 5 years of working with Facebook ads, emphasizing the value of learning from past campaigns.
- 🔧 It's important to set up campaigns with a clear objective in mind, such as maximizing conversions, and to use the appropriate bid strategy to meet those objectives.
- 🚫 Avoid using the 'Highest Volume' bid strategy if you have a specific cost per conversion goal, as it may lead to increased spending without a corresponding return.
- 🛑 Instead of 'Highest Volume', consider using 'Cost per Result' goal (also known as 'Cost Cap') to average costs over time and prevent overspending on days with poor performance.
- 📊 The 'Cost per Result' goal allows the algorithm to maximize conversions on good days and reduce spending on bad days, helping to maintain profitability.
- 📉 Be prepared to adjust your 'Cost per Result' goal upwards if the campaign isn't spending the daily budget, and downwards if profitability is not achieved.
- 🔄 The 'Evergreen effect' refers to the long-term benefits of running consistent campaigns, where data and social engagement improve targeting and performance over time.
- ⚠️ Be aware that if not all sales or conversions are tracked back to the campaign, you may need to adjust your 'Cost per Result' goal to ensure continued spending.
- 📝 A calculator is provided to help determine the appropriate 'Cost per Acquisition' target based on various business costs and desired profit margins.
- 🔄 Understand the difference between 'Cost per Result' goal and 'Bid Cap', where the latter focuses on hitting a daily spending cap and is more suitable for campaigns with high daily budgets.
Q & A
What is the main topic of the video?
-The video discusses a simple strategy to ensure Facebook ad campaigns remain profitable while scaling.
What is the issue advertisers face when increasing their budget?
-Advertisers often lose profitability at some point when they increase their budget, as the increase in results is not linear with the budget increase.
What is the initial bid strategy discussed in the video?
-The initial bid strategy discussed is the 'highest volume' bid strategy, where Facebook spends the entire daily budget to get as many conversions as possible.
Why does the speaker not recommend using the 'highest volume' bid strategy?
-The 'highest volume' bid strategy is risky because if the profitability goal is not met, it can result in significant losses, as it spends the entire budget regardless of the cost per conversion.
What is the alternative bid strategy recommended in the video?
-The alternative bid strategy recommended is the 'cost per result goal' (formerly known as cost cap), which aims to average the cost per result to a specified amount over time.
How does the 'cost per result goal' bid strategy work?
-The 'cost per result goal' bid strategy tries to average the cost per result to the specified goal over time. On good days, it maximizes conversions at lower costs, and on bad days, it reduces spending.
Why is the 'cost per result goal' bid strategy better for scaling?
-This strategy is better for scaling because it reduces the risk of overspending on days with poor performance, ensuring that the budget is used more effectively.
What should advertisers do if their campaign is not spending enough with the 'cost per result goal' strategy?
-Advertisers should incrementally increase the cost per result goal until the campaign starts spending the desired amount of budget.
What is the 'Evergreen effect' mentioned in the video?
-The 'Evergreen effect' refers to the long-term benefits of running a campaign continuously, where accumulated data, social engagement, and algorithmic learning lead to improved performance over time.
What is the 'bid cap' strategy and how does it differ from the 'cost per result goal' strategy?
-The 'bid cap' strategy aims to achieve a specified cost per result on a daily basis, spreading the budget more effectively across days with good performance potential. It works better with higher daily budgets compared to the 'cost per result goal' strategy, which averages results over a longer period.
What should advertisers do if their campaign's sales are not being fully tracked?
-Advertisers should estimate the percentage of untracked sales and increase the cost per result goal accordingly to ensure the campaign continues to spend effectively.
What tool does the speaker offer to help calculate CPA and ROAS targets?
-The speaker offers a calculator that helps determine CPA and ROAS targets based on various business metrics, which can be accessed by clicking a link in the video description.
Outlines
📈 Scaling Profitable Facebook Ad Campaigns
In this video, the speaker introduces a strategy to maintain profitability while scaling Facebook ad campaigns. They discuss the common issue of losing profitability as budgets increase and results do not scale linearly. The speaker, who has five years of experience with Facebook ads, shares a simple strategy to address this problem. They also invite viewers to subscribe for more free insights and demonstrate the strategy using an example ad account, explaining the importance of setting a campaign budget at the campaign level and choosing the right bid strategy for conversions.
🎯 Understanding Bid Strategies for Ad Profitability
The speaker elaborates on the different bid strategies available in Facebook Ads, cautioning against the use of 'Highest Volume' due to its risk of quickly losing money if conversion goals are not met. They advocate for the use of 'Cost per Result' (CPA) goal, which averages the cost per conversion over time, allowing for better control of ad spend and profitability. The speaker shares an example from an e-commerce client's campaign, illustrating how adjusting the CPA goal can stabilize costs and scale the campaign more effectively. They also provide a calculator tool for viewers to determine their ideal CPA goals based on various business metrics.
🌱 Leveraging the Evergreen Effect in Ad Campaigns
The final paragraph discusses the 'Evergreen effect,' a phenomenon where long-running campaigns with consistent variables become smarter and more effective over time due to accumulated data and social engagement. The speaker contrasts this with the negative impact of frequently starting and stopping campaigns, which prevents the achievement of the Evergreen effect. They explain how adjusting bid strategies, specifically using 'Cost per Result' over 'Highest Volume,' can help maintain campaign activity and contribute to long-term profitability. The speaker also mentions a 'bid cap' strategy as an alternative for certain business conditions and encourages viewers to access a provided CPA and ROAS calculator for campaign optimization.
Mindmap
Keywords
💡Facebook Ads
💡Profitability
💡Campaign Budget
💡Bid Strategy
💡Cost per Acquisition (CPA)
💡Scaling
💡Conversion Objective
💡E-commerce
💡ROI (Return on Investment)
💡Ad Set
💡Evergreen Effect
Highlights
The speaker shares a simple strategy for ensuring Facebook ad campaigns remain profitable while scaling.
A common issue for advertisers is losing profitability when increasing budget, which is not linear with the increase in results.
The video demonstrates how to set up a campaign using Facebook's ad platform to address the profitability issue during scaling.
The speaker explains the difference between campaign budget optimization and setting a daily budget at the campaign level.
The importance of selecting the right performance goal and bid strategy for maximizing conversions is discussed.
The risks of using the 'Highest Volume' bid strategy when there's a need to maintain profitability are highlighted.
An alternative bid strategy, 'Cost per Result Goal', is introduced to average cost per conversion over time.
The speaker provides a client example to illustrate the transition from 'Highest Volume' to 'Cost per Result Goal'.
The impact of adjusting the cost per result goal on campaign volume and profitability is shown through the client example.
The concept of the 'Evergreen effect' is introduced, explaining how long-term campaigns can become smarter and more effective.
The speaker recommends against using 'Highest Volume' when scaling due to the increased risk of wasting money.
A method to calculate the ideal cost per result goal using a provided calculator is explained.
The importance of monitoring campaigns and adjusting the cost per result goal based on spending and profitability is emphasized.
The speaker addresses how to handle discrepancies between tracked sales and Facebook ad manager reports.
The difference between 'Cost per Result Goal' and 'Bid Cap' strategies is outlined, including their respective advantages.
The video concludes with a call to action for viewers to access a CPA calculator and engage with the content through likes and comments.
Transcripts
in this video I'll share with you one
thing that I wished I had learned sooner
when I started my career within Facebook
ads when I was starting out I had no
clue what this even was and that it was
possible to run ads like this so in this
video I'll show you a very simple
strategy you can use to just make sure
that you force your Facebook ad
campaigns to stay profitable while
you're scaling one very common issue for
advertisers is when you're starting to
increase your budget you start to lose
profitability at some point so the
increase that you do on your budget is
not linear with the increase in results
at some point they usually drop off and
that's where it usually stops to make
sense to scale further so this issue is
exactly what I'm going to be talking
about in this video and I'm going to
show you how we're solving it and how
you can do it as well with this very
simple strategy and if you're new to the
channel my name is AA I've been working
with Facebook ads for The Last 5 Years
helping multiple different businesses
all around the world uh get much better
results for their campaigns and this
YouTube channel is just where I share
the lessons that I learned along the way
and share that for free with you guys so
if you're interested in seeing more like
this you should definitely click the
Subscribe button so let's get right into
it so right now as you can see I'm
inside one of my example ad accounts and
I'm just going to use this one to
illustrate to you how to set up this
strategy first thing I've gone is like
I've just set up new campaign here as
you can see on the campaign level just
set it up very simply a sales campaign
an advantage campaign budget is turned
off this is previously known as campaign
budget optimization it just simply means
that you select the daily Budget on the
campaign level so if you have it on on
the campaign level it would spread your
budget across the available adsets that
you have according to what will give you
the best or the most results based on
what you set as the objective for the
campaign so in simple words it's just
mean that when you set the budget on the
campaign level the algorithm will decide
where to put that budget so which adets
are going to get the most of that budget
now we're going to leave that one ticked
off for now and just going to click next
and then you'll get to the ad set level
so this is obviously where you put in
the targeting but you also put in the
conversion objective and the bid
strategy and that's what I'm going to be
focusing on in this video so as you can
see here under performance goal I want
to maximize the number of conversions
that I get and for me that is getting
people to schedule a meeting with me in
your case that could be that you want to
get sales uh or leads or anything else
but and most likely you're going to want
to optimize for the purchase event if
you're running e-commerce so yeah just
keep that in mind I just have a bit of a
different objective than what most
advertisers do have because I'm running
a marketing agency so as you can see
under here you have cost per ass goal
and you can also see that this one is
optional now if you leave this one open
and you go ahead and publish the whole
campaign as you can see here under bid
strategy right now by default I have the
highest volume bid strategy what this
means is that I'm selecting a daily
budget as you can see right here 160
croners and I want Facebook to spend all
of that money and just get me as many
conversions as possible regardless of
how many that is so I'm not saying
anything about the profitability or the
cost per purchase or per conversion
event that I need I'm just simply saying
hey spend this money just get me as much
conversions as you possibly can now the
problem here is very obvious if you have
profitability goal that you need to hit
you only have a certain cost per
purchase or per coersion event that you
can afford then this bid strategy is
risky because if you don't hit that goal
or you have a few days where it's still
spending all your money but you're not
getting results you can very quickly
lose a lot of money uh which is a big
deal for a lot of advertisers so this is
why I generally don't use highest volume
anymore for any of our clients the only
uh situation where we use highest volume
is generally if we want to force spend
into a new product or a new product
launch or we just want to get some um
you know Impressions and get some
exposure of something new and we don't
immediately expect profitability back we
have more a long-term vision for it but
uh for a lot of advertisers that not
going to be super relevant you need to
be profitable on a almost like a day
to-day or week by week basis so that's
why I also don't recommend going with
highest volume in most uh situations now
since we probably agree that highed
volume bid strategy isn't always the
best one to go with let's go back into
the adset and look at the Alternatives
that we have all right so let's scroll
back down to cost per result goal so if
we look at the information that Facebook
gives regarding the cost per result goal
setting you can see here that if you
don't set a c per result goal meta will
focus on spending your entire budget and
getting you the most results so that is
all good and great but if you're not
being profitable and they're not able to
get you as many results as you need then
why do you still want to spend all your
daily budget you probably shouldn't and
that's why I highly recommend to do put
in the cost per assault call now the
thing that happens when you use this and
this is forly known as a cost cap if I
say put in 100 chroner as my um cost per
assult goal so I my goal is to get 100
croner per meeting schedule with me in
that case what usually will happen is
that over time algorithm is going to try
to average my cost per result down to
100 croner it does not mean that every
day I'm going to get 100 croner per
result but over time it's going to try
to average it out and on the good days
when the algorithm sees a lot of
potential it will try to Max that out
and then get as many conversions for
lower costs uh lower than 100 Corners as
possible and on some days when the
results aren't good it's going to reduce
how much I'm spending and it's not
probably not going to spend all of the
daily budget that I put on the adset
level so as you can see now I put in 100
chroner and the bid strategy is changed
to cost per all gool so now I'm actually
going to show you what you can expect
when you start using the cper ass goal
bid strategy because it's not so
intuitive it takes a bit of patience and
you need to understand how it works in
order to fully maximize the results you
can get from it so I'm going to show you
ad account account here from one of our
clients this is a e-commerce client we
started this campaign with highest
volume but then immediately we switched
it over to CPA goal or cers goal and as
you can see we started off if you look
at the history here you can see that
when we started the campaign in the
middle of January it was first highest
volume but that one just switched over
to cper Sal golf because we agreed on
using that one instead and as you can
see here we started with a 100 croner
but then we immediately switched that to
238 croners per result so that was our
initial goal and as you can see when we
switched it from 100 to 23 8 you can see
that the amount of results are
increasing a lot so January 23rd we
start increasing in volume we're scaling
up we're getting a lot more purchases
some per some days you know 20 20 plus
30 plus purchases but then we realized
around this point that yeah we're
getting volume but we need better
profitability in order to make things
work so we switch the cost per goal to
200 and that was 14th of February switch
it and as you can see the volume is
going down but if you look at the C per
salt it's starting to stabilize more so
it's getting a bit lower some days we're
getting below 200 some days it's
slightly above and some days it's a lot
below so this is how the bid strategy
works it's not going to get you the
desired cper result every day so if you
look at shortterm time periods you're
not going to be super satisfied with it
but you need to look at longer time
periods like one week minimum because
the the algorithm needs time to average
you out and get you to that goal so
that's how the cost per Sal goal Works
another reason why I like it so much is
because when you're starting to scale
the higher daily budget you have the
higher risk you have wasting a lot more
money if you have a day where the
campaign spends all your budget but
you're not getting um almost any results
so that's why I think it's very risky to
go with highest volume when you're
scaling instead what I like to do is
using C per assult goal because as
you're scaling if the compaign doesn't
think and can get you the desired CPA
then it's just not going to spend all of
your daily budget so the only risk is
that you're not spending as much money
as you want instead of spending it and
losing it so I think that's a much
better situation to be in and that's why
I like this bid strategy so much now if
you don't get the campaign to spend what
I would recommend doing is just
increasing your cost per result goal so
increasing your CPA goal so you can do
that in few increments and see how much
High you need to go before the campaign
starts spending your money and then once
you get some momentum and uh the results
start to stabilize you can try to you
know by a few steps take it back down to
where you ideally want it to be but it's
still a better strategy than just going
with highest volume in my opinion so if
you're unsure how to calculate and
figure out where to set your uh cold
goal the amount when you're starting out
I've made this calculator right here
that you can use so if you want to get a
hold of this just click the link in the
description of this video and put in
your email and I'll send it to you so
this one is fairly simply set up so you
can just put in your numbers and on the
right side here you will have CPA
targets which is cost per acquisition
this is the same Target that you use to
put into your campaign for the Coster
sold goal now if you're using uh
optimizing for highest value instead of
highest volume instead of a CPA goal or
a cper ass goal you will see that you
can select a row as goal so the same
thing applies there uh so then you will
just use one of these numbers depending
on how aggressively or conservatively
you want to scale so you put in your
cost of sols as a percentage of your
average uh price across all your skes uh
put in your credit card fees or Merchant
fees shipping cost fulal cost um and
then you will have an average margin or
average cross profit uh which will be
used to calculate what your target
should be so let's say you want to scale
fairly aggressively you want the
campaign to spend but you still don't
want to use highest volume then I would
go with the aggressive targets so in
this case this example right here uh you
would use 7 USD as your goal now if you
want to be a bit radical but you don't
want to be too aggressive you go 66 and
if you want to be very conservative and
be very profit focused then you want to
go 44 so this one is optimized mostly
for e-commerce that's why I have the
average order value and the customer
lifetime value uh section to put in here
if you have a different business model
and you don't know these numbers then
you can make some estimates of how much
the the customers worth to you but yeah
so make sure you click the link in the
description of this video If you want to
get a hold of this so now I'm going to
show you how to put this into the
campaign so as an example let's say we
want to go aggressively so I'll just
copy this number and go back into the
campaign then you go to the adset and
you just paste it in here so after you
put publish now make sure you monitor
the campaign see how it's working and if
it's not spending you might need to
increase it a bit uh if you're not
profitable it's spending a lot but
you're not profitable you might need to
put it down a little bit further so you
just need to play around with this and
figure out the the exact target to start
out with and um but over time you will
definitely get a better feel for it and
you will know how to use it more now a
few things you need to be mindful of
when you're using this speed strategy is
that if not all of your sales or
conversions are being tracked or at
least not credited back to the campaign
in other words if you see that you're
getting more sales than what is
appearing in your Facebook ads manager
report then what you might need to do is
to increase it to make up for that so
that the campaign is still spending so
in other words if you're seeing that the
results are pretty good but because of
the bit strategy you have the campaign
is now willing to spend more what you
need to do then is just look at your
backend data try to figure out an
average of how many percent of your
sales are not generally being tracked
and then increase your cost per assult
goal by the same percentage and that's
how you can make it continue to spend
without switching to highest volume and
by doing it that way you can still
bypass that issue and you can continue
to scale uh profitably uh without the
campaign stopping up and not spending
money because not all sales have been
tracked now another big reason why I
like like to use this bit strategy is
because it allows you to experience what
I call the Evergreen effect and the
Evergreen effect is something that I've
been referring to in the past in some of
my older videos and that generally
happens when you run a campaign for a
very long time period and you keep
running with some of the same variables
over a longer time period you start to
collect data on those variables the
campaign becomes smarter and smarter and
you stacking social engagement on the ad
level you get all the comments and all
the likes it all starting to stack and
all of a sudden you might have hundred
of comments and uh likes on your ads
that's going to help the clicker rate
and all the data that the ad set and the
campaign has been getting over time is
going to help you get better targeting
as well now if you start a campaign
scale the budget and then turn it off
because the profitability drops and then
turn it back on later because you want
to try again and you do all of these
drastic changes all the time you'll
never experience the Evergreen effect
you need a month a few months before you
start to experience this dependent on
your budget level of course and by using
this bid strategy in instead of turning
it off you can just decrease the cost
per ass goal or increase the roas goal
to make the campaign spend less but it's
still active you still allow it to go
out there and try to get your
conversions at the profitability that
you want now if we go back to the
example campaign that we started setting
up earlier and you go to the adset level
and you scroll back down to bid strategy
you can click edit and under here you
can see something called the bid capap
now the main difference between these
two is that with the cper so goal the
algorithm tries to to average your
results out to hit your goal on a longer
time Horizon but with the bid cap it's
trying to hit that amount that you put
into it as the cap every day on a
short-time basis now the bit capap can
work amazingly for some businesses but
another thing you need to be mindful of
is that it generally works better if you
have a really high daily budget because
it's very effective at finding the good
days and spending a lot of money on
those days where you can get a lot of
conversions at your desired cper salt
and on the bad days what is really
amazing about bidc cap is that it's
probably not going to spend nearly as
much money it's probably going to scale
down a lot so so by using bid cap the
budget is spread much more effectively
across the different days depending on
the potential that the algorithm sees on
these different days so hopefully by now
you have a better understanding of how
you can use these different bid
strategies it's not a lot of advertisers
that are aware about these so if you
watch the video all the way to the end
you probably have a nice competitive
advantage in terms of understanding
these and hopefully applying them to
your business and scaling profitably as
I already mentioned in the video If if
you want to get access to the Ros and
CPA calculator you can click the link in
the description of this video and I'll
send you that to your inbox and if you
like the video and want to see more
content like this make sure you
subscribe and like and also if you have
any questions leave them in the comments
below and I'll answer each and every one
of them in as much detail as possible
thank you so much for watching and I'll
see you in the next video
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