In the evolving world of digital advertising, what made advertisers successful a year ago, won’t necessarily guarantee success today. Advertisers need to continue re-shaping their optimization strategies and keep on top of what’s going on in the industry. We’ve seen a focus shift from website traffic to conversion optimization, and more recently to Return on Ad Spend (ROAS). Right now, Incrementality and Lifetime Value (LTV) are taking center stage, and the performance trends that we’ve highlighted in this blog post, help to optimize performance in these two areas.
Bid Multipliers allow advertisers to define bids separately by audience segments without splitting them into different ad sets. Advertisers can then consolidate learnings under a smaller number of ad sets, but also account for additional information of their user segments, ie. bid higher for user groups with higher incrementality or LTV. This allows them to focus budget on more valuable segments. We partnered with one of the most well-known global travel companies to improve their total LTV by 8% through applying Bid Multipliers.
Facebook Retention Optimization lets Mobile App advertisers better optimize their ads to users whose Lifetime Value is higher. It’s proven that a large number of any mobile app users quit using the app very soon after installing, and Retention Optimization allows advertisers to optimize for users that are more likely to open the app after two or seven days after installing it.
Data-Driven Attribution is a new attribution model on Facebook that captures the incremental effect of advertising. The model is trained with past lift tests, which makes it more accurate than many alternative methodologies. Allocating budget based on this data allows you to invest in audiences whose true ROI is the highest.
Value Optimization and Minimum ROAS Bidding
Value Optimization allows advertisers to target people with the highest expected revenue as opposed to the lowest CPA. We have seen great success with this feature in 2017 and 2018 for our customers. Yet, we see the feature under-utilized in the industry overall – even with advertisers whose primary goal is ROAS. Optimizing for ROAS, in most cases, also optimizes spend for users that have the highest Lifetime Value. We partnered with a US-based eComm advertiser increase their ROAS by 130% through adopting Value Optimization.
However, Value Optimization cannot take into account repeat purchase patterns after a seven-day time window, or if (in the case of an eComm advertiser) different user segments return products more often than others. In these cases, we recommend advertisers opt in for Bid Multipliers. Minimum ROAS Bidding is for Value Optimization what bid caps are for Lowest Cost Bidding, so both approaches are viable.
A/B Testing with Multi-Cell Lift Tests
Multi-Cell Lift Testing is not a new Facebook feature, but one that we recommend advertisers continue to use in 2019. In most A/B tests, selecting the alternative that gives better attributed results should also be a better option in terms of incrementality. E.g., when comparing two static creatives against one another, the one that garners a better attributed CPA will most likely drive better incrementality.
Attributed CPA doesn’t necessarily always result in better incrementality in the case of budget allocation between funnel steps. This is also the case when testing between static versus video content, different audiences and varying bid goals. The only way to know is to run a Multi-Cell Lift Test and measure the incrementality between the two alternatives. We partnered with one of the world’s most well-known travel advertisers to help them make their budget allocation decisions between Upper and Mid-Funnel campaigns based on Multi-Cell Lift Tests. As a result, the share of spend in Upper Funnel campaigns increased significantly as this yielded better overall incrementality for them.
We hope these tips can help set you up for success in 2019. Interested in learning more on any of the above? Contact us at any time at firstname.lastname@example.org.