Today I’m going to talk about how to set ad set level budgets – and how to distribute your overall budgets across all your ad sets. 

This is a common conundrum when you are setting up campaigns & ad sets -> do you set up a lot of ad sets with very low budgets? This ostensibly lets you test more creatives & audiences.

Or do you set up a very few ad sets with high budgets? This lets you get more data – and more statistically significant data. 

Where indeed is the sweet spot? This episode shows you how to think about this. We also look at:
-> The relationship between target CPA and ad set budgets.
-> How to think about campaign budgets for a CBO.

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KEY HIGHLIGHTS

🤔Do you set up lots of ad sets with a low budget or very few ad sets with a high budget?

🙌🏽Facebook recommends setting up as many ads in a way that every ad set gets at least 50 conversions a week

👥You do want to have as many diverse audiences as possible.

☄️How do you structure your ad sets if your target CPA is very high?

🔄How does your budgeting change in a CBO context?

KEY QUOTES

There is a baseline for the algorithm

Facebook’s guideline is to ensure that the algorithm receives at least 50 conversions per week so that it can learn and give the results it needs to give.

How to make the most of Facebook’s algorithm

Even if Facebook’s algorithm changes, what you want to do is ensure Facebook gets enough data points and signals that it’s able to optimize and improve performance to the maximal possible extent.

FULL TRANSCRIPT BELOW:

Today I’m going to talk about how to set ad set level budgets – and how to distribute your overall budgets across all your ad sets. 

This is a common conundrum when you are setting up campaigns & ad sets -> do you set up a lot of ad sets with very low budgets? This ostensibly lets you test more creatives & audiences.

Or do you set up a very few ad sets with high budgets? This lets you get more data – and more statistically significant data. 

Where indeed is the sweet spot?

How we think about ad sets is this -> we set up as many ad sets as possible such that each ad set gets to at least 50 conversions per week.

Let’s unpack that.

In order for Facebook’s algorithm to operate efficiently, we need to feed it enough conversions.

Facebook’s guideline is to ensure that the algorithm receives at least 50 conversions per week so that it can learn and give the results it needs to give.

Let’s walk through this via an example.

Let’s assume your maximum daily budget is $500.

Let’s assume your target cost per action(perhaps cost per purchase or subscriber) is $10.

If you need to get to 50 purchases or subscribers a week, you need to hit at least $500 in spend per week – or about $71 per day per ad set. 

Of course if you have more than $71 a day, you can optimize faster and get learnings sooner – so it’s always recommended and better to set higher budgets. 

Our typical recommendation is to start with about 7 ad sets with $71 a day – so that you get to test 7 different audiences – and get as much early learning as possible.

Once you see which audiences & creatives are starting to resonate and perform, you increase or decrease budgets to them accordingly.

Now what happens if you have a higher CPA? Let’s say your target CPA is $20. 

You need to spend twice as much as before to get to 50 conversions per week – about $142. In this case you can only do half as many ad sets – or about 3 ad sets with the budget and constraints you have.

How does this change in a CBO context when you dont have ad set budgets – and just have campaign level budgets?

While Facebook still doesnt have very precise guidance on this, you still make sure each ad set gets to 50 conversions per week – or and that target reflects at the campaign level budget. 

In here, it’s much the same thing. You set the budget at the campaign level – but you do it so that each ad set gets as close to 50 conversions – or ideally more than that if possible.

Even if Facebook’s algorithm changes, what you want to do is ensure Facebook gets enough data points and signals that it’s able to optimize and improve performance to the maximal possible extent.

I’ll link to this spreadsheet in the notes – make a copy and play around with it. Always remember the guideline -> get to 50 conversions per week per ad set(or more than that) if possible.

A REQUEST BEFORE YOU GO

I have a very important favor to ask, which as those of you who know me know I don’t do often. If you get any pleasure or inspiration from this episode, could you PLEASE leave a review on your favorite podcasting platform – be it iTunes, Overcast, Spotify or wherever you get your podcast fix. This podcast is very much a labor of love – and each episode takes many many hours to put together. When you write a review, it will not only be a great deal of encouragement to us, but it will also support getting the word out about the Mobile User Acquisition Show.

Constructive criticism and suggestions for improvement are welcome, whether on podcasting platforms – or by email to shamanth at rocketshiphq.com. We read all reviews & I want to make this podcast better.

Thank you – and I look forward to seeing you with the next episode!