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Andy Shwetzer

Verum's Ad Testing & Scaling Strategy (Video Summary)

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Verum's ad strategy is comprised of five phases.

 

Phase 1: Interest Testing

Phase 2: Interest Scaling

Phase 3: LAA Testing

Phase 4: LAA Scaling

Phase 5: End Game

 

Each phase builds upon the last, providing you with information that you need to find your winning creative and audience combination in as little spend as possible.

 

Phase 1: Interest Testing

 

With this phase, I’m going to go over a few details about the mechanics of setting up a Facebook campaign. Don’t skip over this part, as you will need to have this knowledge for future phases!

 

CAMPAIGN OBJECTIVES

 

Next, you will need to set your campaign objective.

 

One important thing to note here is that Facebook is very good at figuring out who is likely to only take a specific action; so, you will likely find that using a post-engagement optimization will only yield post engagement, and very few clicks or purchases.

 

As such, I strongly recommend sticking to the ‘conversions’ optimization when running your campaigns. This will provide you with users that are most likely to make a purchase from your store.

 

CAMPAIGN VS ADSET BUDGETS

 

Lastly, you will need to specify whether you want Facebook to optimize on the campaign or ad set level.

 

A campaign-level budget will instruct Facebook to distribute spend across the adsets within that campaign over the course of the day. This allows Facebook to allocate spend to individual adsets based on which ones it thinks will perform the best.

 

An adset-level budget will instruct Facebook to spend a specific amount for every adset within a campaign over the course of the day.

 

Though this might seem a little bit complicated, all you really have to know is this:

 

  • Campaign budget optimization is better for higher-priced products where more data is needed to optimize

  • Adset budget optimization is better for lower-priced products where less data is needed to optimize

 

A general rule of thumb is to use campaign budget optimization if your product cost is greater than $15, and adset budget level optimization for products that cost less than $15.

 

Bid Strategy

 

We’ve tested out the various different bid strategies, and found that lowest cost has done best for us across a number of different ad accounts & stores.

 

Adset Setup

 

We’re now going to go ahead and set up the adset. The first step is to set the conversion event to purchase. By doing so, you increase the chances of getting high-quality traffic that is more likely to purchase.

 

Schedule: Set the start date & time to midnight of the next day. This will ensure that Facebook optimally spends your budget throughout the day, bringing in the best results possible.

 

Budget: You’ll now want to go ahead and set the budget for your adset, if you’re using adset budget optimization. The daily budget should equate to $2.50 x (# Of Creatives)

 

Age/Gender: You can also specify what age range and gender you would like Facebook to target. Generally speaking, Ileave both set to their default values. Unless your product is specifically for only one gender, Irecommend you do the same.

 

Languages: Assuming that your website and advertisements are geared for English speakers, I recommend setting this option to English (All).

 

Placements: We recommend going with automatic placements, allowing Facebook to decide the best place to show your ads.

 

Optimization & Delivery: We recommend leaving these as their default values.

 

ADS CREATIVE AND COPY SETUP

 

Once that’s set, you will need to upload your creative and create your post. If you’re just getting started, I recommend to using either a single image or a video ad. Both can work very well, though you might find that products with functionality tend to work well with a video ad that clearly shows how they work.

 

Primary Text

 

Generally, you’ll want to keep this relatively short and to the point — a quick description of what the product does, combined with a discount and URL to your website where the customer can purchase your product.

 

Headline

 

This is text that appears next to your CTA button. It is not visible in all placements, but Irecommend filling it with something simple like your product name.

 

Description

 

This is displayed underneath the headline, and will only appear in certain placements. Generally, Ilike to reinforce the scarcity of our offer by including something like “50% OFF – Limited Time Only”.

 

Website URL

 

We recommend leading people directly to your product page; this reduces the number of steps they must go through before they see your product, and ultimately before they purchase.

 

Display Link

 

The display link is the text that will appear in the website URL section. So, if your website URL is mysite.com/products, you could make the display link mysite.com. This will still redirect users to mysite.com/products, but they will see mysite.com on the ad. This is a useful feature if you have a very long product page URL; it makes things a little cleaner.

 

Call To Action

 

The call to action is a button that is shown at the bottom of your advertisement. You’ll want to set this to “Shop Now” so that people know they’re going to a page where they can potentially purchase the product in your advertisement.

 

ANALYZE ADS – FIND WINNING CREATIVE

 

Once two days have passed, you will want to go ahead and take a look at your results to see if any of your creatives outperformed the others. Though certain ads may do better with some audiences than others, you might find that one ad did better than another across all audiences.

 

The easiest way to see which creative is doing the best is by using one of the tools within ads manager called ‘Creatives’. To access this tool, simply hover over the lefthand-side of ads manager until the column expands and reveals a list of options you can pick. Next, click ‘Show More Tools’, and click on ‘Creatives’.

 

You should now see a breakdown of your creatives by whatever metrics you have selected on the dropdown.

 

Ideally, to determine which creative is superior, you would look at the cost per purchase. However, if you have a lower budget in the $50 – $100 range, it’s more than likely that the creatives are neck-to-neck in terms of performance; there simply isn’t enough data in order to make a justifiable decision to eliminate one or the other.

 

So, what you must do is look at the entire range of metrics from your preset, and see if for any of the ads, the various metrics are better than all of the other ads.

 

So, let’s assume that you have two creatives:

 

With a low number of purchases, and only one purchase difference between the two creatives, you can't make a decision based off of the purchases metric.

 

So, you need to look at other metrics like cost per click, cost per add to cart, cost per initiate checkout and use those to make a decision.

 

If one of the ads outperforms the other by all of the metrics (except cost per result) you can more comfortably make a decision, and go with the winner, moving on to Phase 2.

 

However, if you find that both creatives have similar performance across all the metrics, continue to use both of the creatives in Phase 2.

 

Phase 2: Interest Scaling

 

The main goal of this phase is to scale your winning creative and audience from Phase 1. At this point in time, Istrongly recommend only using CBO’s at this point in time — this is because once you have a good audience and creative, you will find more consistency in performance with CBO’s as opposed to ABO’s.

 

CBO SETUP

 

In this step, we’re going to go ahead and create a new CBO with a daily budget of $100.

 

The adsets in this CBO will be duplicates of profitable adsets from Phase 1. In short, I Want anywhere between 5-10 adsets total, depending on the number of different winning interests you had in Phase 1.

 

A good rule of thumb for the number of duplicates based on the # of winning adsets is as follows:

 

  • 1 winning adset: Dupe this adset five times (5 total adsets)

  • 2 winning ad sets: Dupe each adset four times (8 total adsets)

  • 3 winning ad sets: Dupe each adset three times (9 total adsets)

 

The reason you want to keep 5-10 adsets total is due to the budget of the CBO; too many ad sets within the CBO can result in a small amount of spend in each, which can prevent the CBO from optimizing correctly.

 

So, to duplicate your adsets, go back to your original campaign, and select all profitable adsets. Duplicate them as per the breakdown above.

 

Now, if you found that there was no clear winning creative in the first phase, you can leave the ad setup as is. We will continue running both creatives for the time being. Alternatively, if you have a higher budget, you could create separate CBO’s for each creative — but Igenerally recommend just sticking to one CBO.

 

If you found that one adset was performing better than the other, you’ll want to go ahead and make sure that all of the ads within this CBO are the winning creative.

 

ANALYZE PERFORMANCE

 

Before analyzing performance, you’ll want to let your CBO run for two days as in Phase 1. Once the data comes in, determine which of the following apply:

If you find that your CBO was not profitable over the past two days, you should go back to Phase 1 and test new creatives.

 

If you find that your CBO was profitable over the past two days, go ahead and try scaling the campaign with the scale rule below.

 

SCALE RULE

 

If a CBO performs well for 2 days, and the winning audience exceeds 20m, duplicate the winning audience into a new CBO with twice the original budget.

If the CBO continues to do well, you can continue scaling by duplicating the CBO, and doubling the budget again.

 

If a campaign spends 5x your breakeven cost per purchase while scaling, kill the campaign.

Before moving on to Phase 3, continue running your ads until there is a total of $500 spent for the ad account, or approximately 2,000 75% video viewers.

 

Phase 3 – LAA + Retarget

 

The main goal of this phase is to create and test lookalike audiences, as well as set up a retargeting campaign.

 

  

CREATING CUSTOM AUDIENCES

 

To make your lookalike audiences, you first need to create custom audiences. Custom audiences are essentially customized groups of people that are somehow connected to your store or Facebook/Instagram pages based on a particular action they have taken.

 

Examples include people who viewed your page, people who watched your video, and people who engaged with your post.

 

You’re going to have to go ahead and create the following:

 

For your retargeting sequence, you need to make the following custom audiences:

 

  • Pageview

  • Add To Cart

  • Initiate Checkout

  • Time Spent On Website, Top 25%

  • 75% Video Views

  • The timeframe for each of these custom audiences will be set to 7 days.

  • Next, you’ll need to create your custom audiences for the lookalikes. The timeframe for these will be set to 180 days, and includes the following:

  • Pageview

  • Facebook Engagement

  • 75% Video Views

 

It will take some time for the custom audiences to populate — you will know they’re ready once the status next to the corresponding custom audience is set to ‘Ready’ on the ‘Audiences’ page.

 

CREATING LOOKALIKE AUDIENCES

 

Once the custom audiences are populated, you can go ahead and create your lookalikes. You will be creating the following segments: 0-1%, 0-2%, 0-3%, 0-4%, and 0-5% for each of the 180-day custom audiences you made in the previous step.

 

When creating these lookalikes, be sure to set the location to ‘WorldWide’; this will prevent you from having to create individual lookalikes for every country you intend to run advertisements for.

 

So, in total, you should have (3 custom audiences * 5 segments) = 15 different lookalike audiences

Just like the custom audiences, the lookalikes audiences will take some time to populate, so wait until the status is set to ‘Ready’.

 

CREATING YOUR RETARGETING CAMPAIGN

 

The retargeting campaign will be a $50 CBO, with 7 adsets inside it (one adset per custom audience created earlier).

 

You will also want to create a new piece of creative for your warm traffic; generally, Ilike to use photo ads with a strong call to action.

 

The copy should also reflect the fact that they are familiar with your product and brand; you don’t need to reintroduce them, but rather remind them that your store exists.

 

ADJUSTING YOUR RETARGETING BUDGET

 

If you find yourself consistently scaling up your cold-audience campaigns, you will want to go ahead and adjust your retargeting budget accordingly.

 

Try and keep your retargeting budget to 5-10% of your total daily budget for your other campaigns. If you find that raising your total daily budget for your retargeting campaigns causes a noticeable decrease in performance, you can always modify the CBO and lower the daily budget as needed.

 

Note: Usually, lower-cost products will require smaller retargeting budgets than higher-cost products.

 

CREATING YOUR LOOKALIKE CAMPAIGN

 

For your lookalike campaign, the daily budget should be $100, and contain 5 adsets targeting one lookalike. Each adset will have 2 of your winning ad within it.

 

Start with the lookalike for which you have the most data, and then move on to others every day or two.

If you find a profitable lookalike campaign that delivers consistent results for two days, go ahead and move on to phase 4. Otherwise, stay in this phase and keep collecting data.

 

Phase 4: Scale LAA

 

The goal of this phase is to scale your lookalike audiences as per the scale rule:

 

If a lookalike CBO performs well for 2 days, and the winning audience exceeds 20m, duplicate the winning lookalike into a new CBO with twice the original budget.

If the lookalike CBO continues to do well, you can continue scaling by duplicating the CBO and doubling the budget again.

 

If a campaign spends 5x your breakeven cost per purchase while scaling, kill the campaign.

Continue to scale your lookalikes with the rules above until you have spent at least $5,000 total on your ad account. At that point, you can move on. to Phase 5.

 

Phase 5: End Game

 

If you’ve made it this far, you’re just about scale sky high! At this stage, Facebook has collected a significant amount of data and no longer requires any guidance with regards to targeting; all you have to specify is budget, location, and creative. Everything else is left on autopilot!

 

WHY BROAD TARGETING IS THE BEST FOR SCALING

 

Broad targeting is hands down the superior way to scale for a few reasons:

 

  • Leverages all the data you’ve collected

  • Requires Little work to maintain

  • Lasts a long time

  • Scaling isn’t limited by audience size

  • Optimizes much more quickly

  • Results are consistent

  • THE SETUP

 

To get started, you should create a CBO with a $500 budget. Within this CBO, you’ll want to place three adsets, with the following locations set:

  • (1) USA

  • (1) Canada + UK + Australia + NZ

  • (1) Worldwide

 

ANALYSIS & SCALING FURTHER

 

After two days, evaluate the campaign in accordance to the scale rule used before in previous phases.

If you find that your CBO is not performing well, return to Phase 4 and periodically come back to Phase 5 after larger amounts of spend (perhaps in intervals of $2,000 – $5,000).

 

Final Thoughts

 

That’s about it! This is the system that we’ve started using late Q4/early Q1 and seen some fantastic results across a number of different stores. 

Edited by Andy Shwetzer
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When talking about budgeting, is there any way to differentiate Campaign total budget and daily budget. Also how would we determine our total budget for phase 1? I understand that it depends on our product cost price x 20 but does that still apply to when we set daily budgets? ( $2.50 x # of creatives). Also under phase 2 of interest scaling, setting a CBO daily budget of $100 for each  adsets you are duplicating. Or was is it meant to be $100 of *total CBO budget?*

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Very Great post! 

I followed Verum's youtube video on testing with a budget and I have had success with finding 4 interests that were working pretty consistently. I put them in a CBO (Did not duplicate them 3 times though so I will try this). But after 1 day I had no sales but all other metrics were very similar to the interest scaling metrics. Was this just a bad day? Or could something have happened that I messed up where the adsets won't perform better in a CBO? I am guessing because I only had 4 adsets in the CBO could be the issue.

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Yo guys, I'm currently in scaling phase 2. I've made a CBO with 2 winning adsets from phase 1 and the CBO is profitable since I started it 4 days ago. I wanted to scale the CBO but I'm not sure how to do it ? Do I have to picke the best adset from my CBO phase 2 ? Should I just duplicate the CBO and increase the budget ? Or should I make a new CBO with 5 times the winning adset from phase 2 ?

Thanks guys

 

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3 hours ago, Cameron Hale-Sanders said:

honestly CBO's are very inconsistent at the start. In my experience they need 3-5 days to fully optimize. First day you can get a bunch of sales the next you can get 0. 

Ive had the same thing happen to me today. I am wondering if killing adsets inside a CBO will ruin the CBO's preformance

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On 3/9/2020 at 5:42 AM, Andy Shwetzer said:

Before moving on to Phase 3, continue running your ads until there is a total of $500 spent for the ad account, or approximately 2,000 75% video viewers.

 

Hi everyone,

 

1. If we are testing with image-only creatives, what specific indicators and metrics should we be looking to replace video viewers? Would it be ViewContent? And what amount of ViewContent is considered a good indication to moving onto Phase 3?

2. Are there any additional funnel metrics you would consider as a whole that we should focus on besides running ads until there is a total of $500 spent for the ad account, or that is good enough?

 

I think mainly what I'm asking is: what are the most important metrics/indicators for testing image-only creatives at each phase of the Verum FB ads video strategy? ROAS, BEROAS, CPP, TCPP?

 

Thank you for your help!

 

ps - Hope this is okay to post here but if not, please remove my post. I will post in the FAQ section as well.

Edited by R.Fury
Corrected misspelling of BEROAS

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I have problem with Phase 2. 

I duplicate winning ad set to new campaign, and when I want to copy Ad ID to new one, I getting this:

 

Screen Shot 2020-03-11 at 18.27.54.png

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