Facebook Ads optimization is a very vague term used by many people in the digital marketing industry. The question that hangs in the air with many management teams is, “what exactly does it mean to “optimize” a digital marketing campaign?”

Well, I could be spilling the beans here, but I’m going to pull back the lid on what we mean when we say we are “optimizing” a campaign. Usually, optimization of a Facebook Ads campaign consists of three main areas of interest: optimizing placements and networks, bids and budgets, and ad creatives.

Sections:

• Facebook Ads Optimization: Placements and Networks
• Facebook Ads Optimization: Optimizing Budgets and Bids
• Facebook Ads Optimization: Optimizing Ad Creative

Facebook Ads Optimization: Placements and Networks

The Facebook ecosystem has grown so large in the last five years that its placements have expanded across four platforms, Facebook, Instagram, the Audience Network, and Messenger. These placements include, but are not be limited to, Feeds, Stories, In-Stream, Search, Messages, In-Article and Apps and Sites. Below is a full list of Facebook’s current placements.

There are 15 placements:

• Feed
  – Facebook News Feed
  – Instagram Feeds
  – Facebook Marketplace
  – Facebook Video Feeds
  – Facebook Right Column
  – Instagram Explore
  – Facebook Groups Feed
• Stories
  – Facebook Stories
  – Instagram Stories
  – Messenger Stories
• Facebook In-Stream
• Facebook Search Results
• Facebook Instant Articles
• Audience Network
  – Native, Banner, and Interstitial
  – Rewarded Videos

Choosing where your ads appear is among the most basic optimization methods for managing social media paid social, display advertising, and similar digital marketing initiatives. “Optimizing” in this context means removing low-performing networks and placements.

Facebook automatically opts you into “automatic placements” when you set up your ad campaigns. I recommend sticking with this option when you first create your campaigns. This option will allow Facebook’s algorithms to make the most of your budget by combing their entire ecosystem for people interested in your product or services.

The wider your audience, the more effective Facebook’s algorithms will be. A wider audience also gives you the data you need to make effective decisions about where you want your ads to be placed.

You always want to optimize your campaigns based on your goals and objectives. For example, if your goal is to drive leads at a specific cost per acquisition (CPA), then you’ll want to stop serving ads in areas that generate fewer leads and higher CPAs than other areas. The same philosophy works with sales, revenue, and return on ad spend goals. When I pull reports, I usually look at placements, device placements, impression devices, age, gender, and location. You can optimize a few more aspects of your ad’s reach as well. These aspects include device, age, and gender.

Facebook Ads Optimization: Ads Budgets and Bids

The second, more mathematical way to optimize your ads is to adjust your bidding and budget. Managing a budget is straightforward in theory. Spend more where performance is best. However, managing a budget can include making more nuanced decisions about when you spend your budget, where your budget is set (campaign or ad set level), and how you spend the budget.

Where you spend your budget:

• Campaign Budget Optimization (CBO): This choice allows you to set budgets at the campaign level, thereby allowing Facebook’s algorithm to optimize towards the best performing ad set. As a general rule, ad sets define audiences. So by using CBO, you are allowing FB to optimize towards the best audiences.
• Ad Set Budgets: Budgets at the ad set level allow Facebook’s algorithms to optimize your budget towards the best-performing ad within each ad set.

How you spend your budget:

• Daily budgets: The average amount you’re willing to spend on an ad set or campaign every day.
• Lifetime budgets: The amount you’re willing to spend over the entire lifetime of your ad set or campaign.

Ad Scheduling: To use ad scheduling, you want to make sure you are using a lifetime budget. The Ad scheduling feature carries with it huge implications. You can schedule various ad sets to serve ads in a staggered approach, thereby walking users down a clearly defined funnel or removing time slots that do not perform well.

Facebook Ads Bidding

Bidding is fundamental to all, if not most online paid advertising initiatives. However, bidding for Facebook Ads is a little different than bidding for clicks in Google Ads. You can analyze how much you are spending per click on Facebook Ads, but this is not truly representative of how Facebook’s auction system works. On Facebook, you are bidding on a wide variety of actions and ad space instead of search queries.

The campaign objective determines the Actions you bid on. These actions include, but aren’t limited to: conversions, link clicks, impressions, reach, likes, shares, reactions, leads, landing page views, messages, sales, installs, and video views. Google Ads operates on a second price auction system, while Facebook Ads uses a Vickrey-Clarke-Groves (VCG) auction system.

A Vickrey–Clarke–Groves auction is an auction in which bidders submit bids based on an item’s intrinsic value without knowing competitor bids. The winner of the auction is the highest bidder. However, the winner’s price is equivalent to the value the bidder displaced by entering the auction. From a management perspective, this means that before serving ads on Facebook, you should have an idea of your break-even point, profitable margins, and how valuable specific actions (clicks, shares, likes) are to your bottom line.

Facebook has three main bidding options that are quite confusing at first take but begin to make sense the more you delve into their mechanisms. These bidding techniques are the lowest cost, cost cap, and bid cap. I’ll list them below and explain them slightly better than Facebook has in the past. Think of these bidding strategies as a funnel that starts with the bidding option that allows you the least control up down to the bidding option that gives you the most control over your bidding.

Lowest Cost: Lowest cost bidding is the default setting for bidding on Facebook. With low-cost bidding, you are giving Facebook the go-ahead to spend your allocated budget while seeking to pay the lowest amount for each desired action. If you are new to Facebook Advertising, I recommend using this setting to get you started quickly. It will also (along with using automatic placements) allow Facebook to use its full inventory, thereby allowing its algorithms to learn soon.

Cost Cap: The cost cap bid strategy is Facebook’s equivalent of CPA (cost-per-acquisition) bidding. The goal of CPA bidding is to acquire conversions at or below a specific price. Cost cap bidding works most effectively when Facebook’s algorithms have had enough conversions to understand what users are more likely to convert. Therefore, it is usually not good to start off using this bidding strategy since there isn’t enough data for Facebook algorithms to inform their decisions.

With cost cap bidding, Facebook is explicitly looking for users who fall into a specific price range. Therefore Facebook will not always spend your allocated budget. If Facebook doesn’t have enough data to inform these decisions, it may not spend anything at all. Remember, the goal is to target specific bids that fall within a certain price range.

With low-cost bidding, the goal is to find the lowest priced bids, while the purpose of cost cap bidding is to bid ONLY when the user is more likely to convert AND the price to serve them an ad falls within a specific price range. This is a standard knapsack scenario.

Bid Cap: With a bid cap strategy, you are placing a cap on the actual bids. This type of bidding offers the most control over how you bid but, in turn, is the least flexible. I dont recommend using this bidding method unless you know the exact value of each action you are bidding for.

Setting a bid cap is dissimilar to setting a cost cap in that a bid cap caps individual bids while cost cap bids cap your CPA. A bid cap can be beneficial if you’re on a tight budget or know what number you don’t want to go over.

Value Optimization Bidding (ROAS): Value optimization bidding or bidding to target a specific “return on ad spend” is not readily available within your account. Your return on ad spend is a ratio of how much money you have spent running ads vs. the revenue you received running ads.

To use value optimization bidding, you will need to have your Facebook Ads pixel set up to track purchases and revenue and have generated over 100 purchases with ten distinct values from ads over the last seven days. The advantage of using value optimization bidding is that Facebook differentiates between higher-value conversions and lower-value conversions and proceeds to prioritize conversions of higher value, thereby leading to a better return on ad spend.

Facebook Ads Optimization: Ads Creative

Optimizing Facebook Ad creative may be your least favorite Facebook Ads management task, or it may be your absolute favorite. There are few in-betweens as optimizing creative can get quite technical since Facebook offers a wide variety of options for your ad visuals.

Before we discuss optimizing Facebook ads, let’s get a grasp of the ads ecosystem. There are four basic ad types, newsfeed ads, right column ads, carousel ads, collection ads, and video ads to keep things simple. While these are the types of ads available, there are only three basic formats, single image or video, carousel, and collection. These formats work with ad placements to produce a variety of creative types tailored towards your audiences.

Basic Facebook Ad Setup and Optimization

Most advertisers default to the basic setup when creating Facebook ads. This setup includes a campaign with 2 or 3 ad sets, with each ad set containing 2 to 3 ads, but no more than 5 ads. You don’t want more than 5 ads within an ad set because Facebook will quickly start to emphasize a couple of ads before the other ads within the same ad set have a chance to get a significant number of impressions.

If you would like to run tests, you want a straightforward and organized setup that features ads with the same creative headline, text, CTA, and media save one feature you would like to test. Make sure you use reporting that features each level of the funnel to have a good idea of the percentage of people who dropped out of each level of your marketing funnel.

If you are driving online sales and revenue, then you will want to look at these metrics: view content, add to cart, initiate checking and purchases. Your test metrics will be landing page views (if used), view content, and conversions if you drive leads.

Dynamic Ads

Facebook makes testing easy with Dynamic ads. With Dynamic Ads, you to upload up to 10 images or videos and five primary texts, headlines, descriptions, and calls to action each. Facebook will automatically generate combinations optimized for your audience. Variations may include different formats or templates based on one or more elements.

Using dynamic ads is an easy way to find the right combination of ad text, descriptions, and images that resonate with your audience. Some settings, such as Send to Messenger, are not yet available for ads using dynamic creative.

Remember, Facebook’s Dynamic Formats and Creative is different from Facebook Dynamic ads.

After running your ads for a couple of weeks, you can pull a dynamic ad report to see which areas performed well.

Optimize Creative For Each Person

Facebook allows you to optimize your format, ad creative, and destination specifically for each person. Some of these options include minor image enhancements to thumbnails or images, cropping of images and videos, optimizing ad destination, and swapping text and headline fields. This option is available as the “Dynamic Formats and Creative” option when creating a standard ad. If you set your ad group to “Dynamic Ads,” this option will appear as “Optimize Creative For Each Person.”

Offers

Offers are discounts you can share with your customers on Facebook. If you’re an admin or editor of a Facebook Page, you can create an offer ad to encourage people to shop on your website and at your physical store. The user can choose to use the offer right away or save the offer for later.

Fullscreen Mobile Experience

Instant Experience is a fullscreen experience that opens after someone clicks your ad on a mobile device.

Facebook Experiments

Facebook Experiments allows you to run various ad tests using Facebook’s Facebook’s scientific experimentation technology. Testing creative requires testing multiple ads using Facebook’s built-in split testing feature testing creative. You can also test your target audience, delivery optimization, and placements.

This test work with Facebook by dividing the audience you’re targeting into non-overlapping groups. It duplicates your ads and tests the ad sets against each other by only changing that one variable.

Below are the types of tests you can run, with the standard A/B test being the most used of these tests.

• A/B Test: this test lets you compare two or more ad campaigns to see which one is performing best on a cost per result or cost per conversion lift basis. Exposure is split evenly and randomized between each version of your test to determine a winner. If you choose to measure cost per conversion lift, we’ll also include a holdout to compare each test version’s incremental conversion lift.
  
  
• Holdout Test: this test measures the incremental conversion lift of a specific ad campaign or all of your active advertising. Your audience will be randomized and divided into groups that will or will not have the opportunity to see your Facebook advertising to determine the difference your advertising makes on conversion activity, such as purchases, leads or app installs.
  
  
• Brand Survey Test: this test lets you use a brand survey to measure your advertising’s cumulative effect on brand awareness, perception, or recall. Your audience will be randomized and divided into groups that will or will not have the opportunity to see your Facebook advertising. Then your audience is surveyed with poll questions you can choose based on your business goals. Certain budget minimums apply depending on where you’re trying to run your brand survey to yield reliable results.
  
  
• Campaign Budget Optimization Test: this test lets you use an existing ad campaign as a template to see how campaign budget optimization affects your cost per result performance. The test will copy your ad campaign and automatically create an A/B test. One with campaign budget optimization turned on, and one with optimization turned off, so you can easily compare performance between each strategy.