Looming Elimination of Facebook Ad Set Budgets
In early February, Facebook announced that, beginning in September, all existing campaigns as well as all new ones will be migrated over to that platform’s automated campaign budget allocation system. Facebook’s budget allocation system optimizes all campaign budgets across the ad sets provided by a specific advertiser.
The impact which this will have is that all Facebook advertisers will lose the ability to define budgets at the level of an ad set, and will now be forced to establish goals at the level of the general campaign. This is not an optional undertaking, and all businesses currently advertising with Facebook will be obliged to have their advertising campaigns managed under this new system. In effect, all advertising campaigns in Facebook as of September will be conducted via campaign budget optimization.
Why this matters to businesses
Currently, anyone advertising in Facebook has the capability of setting budgets per ad set within a given campaign. However, when September rolls around and all ad campaigns are migrated over to campaign budget optimization, this will no longer be the case, and at that time advertisers will only be allowed to establish budgets at the level of a campaign. This change will also impact existing campaigns, and since that’s the case, any businesses which have long-term campaigns being conducted, or evergreen campaigns which are in process, may require some re-thinking.
This is especially true if those campaigns have been set with specific budgets and performance expectations which are tied to the level of the ad set, because this will have no meaning under campaign budget optimization. Obviously, all campaigns set to be launched during September and beyond should similarly be reconsidered, if they have been set up with performance expectations at the level of the ad set.
What exactly is campaign budget optimization?
In simplest terms, campaign budget optimization is a Facebook algorithm which disperses a campaign level budget into ad sets within a campaign, which is completely based on the goals of the campaign level itself. So for example, if your campaign were to have four embedded ad sets, you would provide an overall budget for the campaign, with a definite goal which you expected to achieve.
Facebook would handle the distribution of that budget, ensuring that the best-performing ad set received the most resources, so that it would achieve the greatest level of success possible. The reason why Facebook is making use of this new algorithm is to continue along on their stated mission of making it simpler and easier for everyone, both beginning advertisers and veteran advertisers, to execute their own advertising campaigns.
With machine learning built into the algorithm that allows for theoretically fewer mistakes and faster reallocation of resources, the system should improve advertising and budgeting processes for all businesses. There are expected to be legitimate financial improvements earned by using this approach, which is why Facebook feels that all advertisers will benefit from the new algorithm.
The objective of campaign budget optimization
The reason for the whole switch according to Facebook, is that the platform wants to provide advertisers with better results, while allowing them to invest less in their advertising campaigns, in other words to achieve a better ROI. By distributing campaign budgets which are based on those ads performing the best, it is expected that return on investment numbers will increase for virtually all advertisers. There is a slight downside of course, in that some level of control would be removed from advertisers.
According to Facebook executives, this new initiative will provide advertisers with the ability to set a single campaign budget for the purpose of optimizing all ad sets. The platform itself will handle automatic and continuous distribution of campaign budgets, so that the best-performing ad sets receive the most resources, and are thus positively reinforced. It also requires a certain amount of faith in Facebook, since it means that advertisers will have to trust that those automated budget allocations implemented by the platform will deliver the very best results.
Facebook executives claim that the campaign optimization system has been exhaustively tested by BuzzFeed and other companies on their content ads, and that the companies are well satisfied with the results. BuzzFeed claims that they achieve greater cost efficiencies and much better management of their budgets, while also experiencing an increase in video ad views, as well as an increased number of clicks. BuzzFeed was also able to achieve a 10% decrease for each viewing on their cost per video set up.
For CuriosityStream, an increase in their subscription rate, as well as a 40% decrease in the cost for a subscription was achieved when they began using campaign budget optimization. Pixelberry was able to achieve a 25% decrease in CPI, while simultaneously enjoying a 50% increase in ROAS, which supposedly had company executives drooling over their success. Univision experienced a 33% decrease in CPI, while also saving 10 hours each month on budget management.
Whether or not these kinds of results will be achievable by all advertisers might be great food for thought, but since acceptance of the new system is not optional, it is to be hoped that all advertisers will experience positive results. Unfortunately, advertisers will not have access to metrics which might measure the success of the new program, at least in the immediate weeks or months after its rollout.
It would be useful to measure the total number of opportunities available for each ad set, or to calculate how much a given result costs under campaign budget optimization, but these metrics will not be available at the outset of the program launching. Facebook has posted an explanation on its help page regarding campaign budget optimization, which urges advertisers to gauge the success of the program based on the total number of results for each campaign conducted. Another criterion Facebook executives feel is important to measuring the success of campaign budget optimization is the average cost per optimization event, which occurs at the level of the campaign itself, rather than at the level of ad sets.