Manage Budgets Automatically to Maximize ROAS

Markus Ojala

PhD, Chief Data Scientist at Smartly.io

Marketing

Get more out of your budget without manual work with Smartly’s Predictive Budget Allocation. You can now optimize towards revenue in addition to different conversion events. The revenue optimization uses revenue data from your Facebook pixel or SDK.

 


If you’re not familiar with it, Predictive Budget Allocation is an automation feature that continuously moves budget between ad sets based on their performance in order to maximize the number of future conversions and minimize CPA levels.

Previously Predictive Budget Allocation maximized only the number of conversions. Now, you if you send revenue associated with conversions from your Facebook pixel or SDK, the budget will be optimized to maximize the total revenue expected. In the future, we'll add other revenue metrics too. 

 

When to use it?

If you have a lot of conversions and revenue data, and significant differences between ad sets in the revenue they bring. Then optimizing towards revenue should bring better results. If all your ad sets have about the same revenue per conversions, then there shouldn't be a difference compared to just maximizing the conversion count.

As revenue can be quite volatile, we use a lot of modelling power to get stable revenue estimates for the ad sets. Note that while you get more revenue, the amount of conversions can decrease. So you get better ROAS (return on ad spend) but possibly worse CPA (cost-per-action).

Predictive Budget Allocation can be used with any campaign type be it prospecting, retargeting, Dynamic Ads or Automated Ads and used for mobile apps, website conversions, lead generation... any campaigns you're running on Facebook or Instagram.

 

More time & better performance without manual work

It’s been nearly two years since we first rolled out Predictive Budget Allocation. We’ve continued to develop Predictive Budget Allocation’s budget modelling, updating the feature to react faster to changes in CPA. We’ve also added new tools to our budget management tool kit, including budget pools that allow you to allocate budget across different campaigns based on performance and stop-loss triggers that pause poorly performing campaigns automatically.

Predictive Budget Allocation has been a been huge time saver for many advertisers who had previously been tracking campaign performance and then moving budgets between ad sets and campaigns manually. Combining Predictive Budget Allocation with triggers that automatically make changes to campaign based on rules you set, has meant that customers like Lost My Name have been able to scale their social advertising without adding headcount to their team.

For advertisers with multiple people managing campaigns, another benefit of automating budget management - in addition to the time savings and improved performance - is that you can you make changes consistently. Rather than having different people use possibly slightly different criteria and timing for managing campaigns, you can set targets and turn on automation. Leaving you for more time for strategic and creative work.

 

Read more about optimizing conversions with Predictive Budget Allocation here.

Markus Ojala Markus Ojala

PhD, Chief Data Scientist at Smartly.io