The Scaling Method I Wish I Knew Sooner (Meta Ads Tutorial)

Summary

In 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

00:00

📈 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.

05:00

🎯 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.

10:01

🌱 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.

Keywords

💡Facebook Ads

Facebook Ads is a platform that allows businesses to create advertisements that appear on Facebook or its affiliated platforms. In the video, the speaker discusses strategies for using Facebook Ads to maintain profitability while scaling campaigns, highlighting the importance of understanding the platform for effective advertising.

💡Profitability

Profitability refers to the ability of a business or campaign to generate more income than its costs, thus making a profit. In the context of the video, the speaker emphasizes the importance of ensuring that Facebook ad campaigns remain profitable as budgets are increased, and provides strategies to achieve this.

💡Campaign Budget

A campaign budget in the context of Facebook Ads is the total amount of money allocated for an advertising campaign. The script discusses how adjusting the campaign budget can affect profitability and the importance of managing this budget to maintain cost-effective advertising.

💡Bid Strategy

Bid strategy in Facebook Ads determines how the platform uses the budget to get the most results based on the advertiser's goals. The video explains different bid strategies, such as 'Highest Volume' and 'Cost per Result Goal', and their impact on campaign performance and profitability.

💡Cost per Acquisition (CPA)

Cost per Acquisition (CPA) is the amount of money spent to acquire one customer or conversion. The video script uses CPA as a key metric for setting bid strategies, aiming to average out costs over time to meet specific profitability goals.

💡Scaling

Scaling in the context of advertising refers to the process of increasing the size or scope of an advertising campaign, often by increasing the budget. The speaker discusses the common issue of losing profitability when scaling and offers a strategy to maintain profitability during this process.

💡Conversion Objective

A conversion objective in Facebook Ads is a specific action or event that the advertiser wants the ad to trigger from the audience, such as scheduling a meeting or making a purchase. The video explains how to set a conversion objective to optimize ad performance.

💡E-commerce

E-commerce refers to the buying and selling of goods or services using the internet, and in the video, it is used as an example of a business model where the speaker discusses optimizing Facebook ad campaigns for sales or leads.

💡ROI (Return on Investment)

Return on Investment (ROI) is a measure used to evaluate the efficiency of an investment. Although not explicitly mentioned in the transcript, the concept of ROI is central to the video's theme, as the speaker discusses strategies to ensure that ad spend yields a profitable return.

💡Ad Set

An ad set in Facebook Ads is a group of ads that share the same targeting, budget, and scheduling. The script describes how to configure ad sets with specific targeting and bidding strategies to optimize campaign performance.

💡Evergreen Effect

The Evergreen Effect, as mentioned in the video, refers to the phenomenon where a long-running campaign becomes more efficient over time as it collects data and social engagement, leading to better targeting and performance. The speaker suggests that using certain bid strategies can help achieve this 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