On today's episode, Steve talks about his time at the Digiday Media Buying Conference. He also dives into some new updates coming to Facebook, including Campaign Budget Optimization, and how it will have an impact across brands who are advertising on Facebook.
Episode Transcript — How to use Campaign Budget Optimization (CBO) to Grow Your Brand on Facebook
Narrator: You're listening to The Spend $10K a Day podcast brought to you by the performance marketing experts at Mutesix. This is your source for cutting-edge insight into the world of online advertising from the team with more Facebook case studies than any other agency on the planet. Here is your host, Steve Weiss.
Steve Weiss: Welcome back to another episode of The Spend $10K a Day podcast. Coming to live from Los Angeles, California. I'm excited to be back. Spent the last three weeks traveling all over the greater United States. I was in Miami, Florida to Norfolk, Virginia to Nashville, Tennessee, all the way up to New York City and finally, back to the paradise, as we call Los Angeles. I was fortunate enough to get invited to a great event in Nashville, the Digiday Media Buying Summit. Facebook actually invited us and a couple of other agencies and I think it was really interesting that's why I'm really excited to share some of the, I guess pain points that advertisers I met they're experiencing. This specific podcast is going to delve into both some of the new updates to Facebook as well as the giant monkey on everyone's back, which is campaign budget optimization and how this will have an impact across both advertising on Facebook as well as running ads as a service provider for other E-commerce brands.
Steve Weiss: I think that this campaign budget optimization is Facebook's way of simplifying a lot of what's going on on Facebook. Actually, being a long-term advertiser in the platform since I was ... In 2009, I remember it used to be able to adjust budgets on the campaign level, and you never used to be able to adjust budgets in the ad set level. It was ludicrous until Facebook made that change. But you're overriding arch is that Google and Facebook are becoming more programmatic in a lot of ways. They're trying to automate some of the harder legwork and to really be successful on these platforms, as I said earlier, content, content, content. You really have to nail down your marketing message and be really good on the creative side that really speaks to specific audiences.
Steve Weiss: So I'm just going to jump right into it on this episode. The Digiday Media Buying conference. What I'm going to walk away with from that conference, it was mostly all agencies, all service providers, and rarely do I go meet other people in the media buying space per se. But one thing that really resonated with me when I left that conference is this need if you're a brand, or you're an agency, whoever you are in the media buying or digital marketing ecosystem the desire to be agile. If you're not agile, and you don't change up the way you're thinking about life, and you're scared of the impacts of what's happening, you're not going to survive. I just think that's something that I kind of just keeps resonating in my mind. Is this need to be agile with the way you think about life when it comes to media buying.
Steve Weiss: They talked a lot about what is the impact that this campaign budget optimization has on the platform? I know we spoke to Facebook, and the people in charge of the CBO team were at the event and from what they've told us, I guess the greater insight is that CBO is going to be rolled out across all of Facebook by the end of the year, but it's really, it's not very clear as to are they going to force everyone to use it? They're being very coy in the way they're communicating about specifically how they're rolling it out. But it's specifically meant as a tool to allow advertisers greater ability to use the algorithm to make choices on the fly.
Steve Weiss: Another thing to know that even though you're running campaign budget optimization, you still go through learning mode and literally you still need 50 conversions before you actually are able to make any budgetary decisions based on CBO. And also, another thing they really pointed out is that CBO actually optimizes campaigns around kind of what the algorithm thinks as the ad set that has the most potential long-term. So when you've run CBO, and we're seeing this right away, is that you might see that some ad sets are getting a lower CPA or lower costs per action or activation wherever you're optimizing for. But long-term, the CBO algorithm or the algorithm that Facebook uses to justify where to spend your budget it's still based around what Facebook thinks is the best long-term ad set for a performance.
Steve Weiss: So literally, they're looking at size of audience, social signals in that audience, et cetera, et cetera. So I think that's something I walked away learning of because I was always curious as to look into some of my campaigns and how they're being run. Why is Facebook allocating certain budgets even though this is not the most profitable CPA driven campaigns? I think the biggest learning experience from this is that CBO is not a finished product. I know there're a lot of advertisers and agencies really worried about the automation, but I still feel there's so much work beyond just CBO that has to go into these campaigns that it's going to create a lot of other, I want to say other problems, but other areas where you could really start testing. Now, you used to only be able to test a certain amount of audiences because you had to put x dollars each audience and start testing it out.
Steve Weiss: Now, you could throw in 20, 30, 40 different audiences. And now, what we're seeing is that there're different ways to group audiences inside of campaigns that are more efficient than grouping everything inside of one campaign. So you're going to start seeing what I think the long-term with CBO we're already seeing is that now the way advertisers group campaigns is going to evolve and change. We're already starting to create multiple campaigns targeting specific types of users. We're being very broad in these campaigns, but we're starting to see that the more your campaign spends, the more opportunity you have to generate efficiencies. And if you have one campaign that's just spending all your money, and you're not really reaching as many users as you should, and that's just something that I'm learning. And I know it's hard to kind of verbalize, but I think that the evolution of Facebook Ad Optimization is going to be around a multi-campaign format just from the new changes coming out.
Steve Weiss: Another thing that I kind of learned from talking to the Facebook team at the conference was specifically the impact that budget is going to have, our daily budget is going to have across all your campaigns. I think that over the years we started to see that the higher the daily budget had the more Facebook has the opportunity to optimize your budget and find those efficiencies. Well, with CBO coming out it's now it's more and more important because you're just not going to get impression share, or the ability to really let the CBO algorithm optimize campaigns without having a high enough daily active budget. So I feel what you're going to start seeing is that year, and a half to put a higher budget to really get higher daily budgets I say to get the positive impacts of CBO.
Steve Weiss: But I think CBO is for the better. I think that you'll see over the next year or so that CBO is going to bring a lot more efficiencies to Facebook and allow your team or yourself, whoever's managing ads for you, you're going to see that it's going to allow you to find the efficiencies a lot easier. What CBO doesn't account for is creative. I think that having a long-term creative kind of calendar per se of very data-driven production calendar is something that we always recommend. So what else you’re going to start seeing is that creative is going to have such a more impactful picture with CBO coming out. And I think those are the two main learnings. It's evolving at the conference really evolving your campaign structure over the next six months to a year around CBO.
Steve Weiss: CBO isn't this automation for set it and forget it. I actually disagree. I think the narrative is that campaign structure, and the way we buy media is going to change specifically with CBO. It's not going to create less work. It's going to create a more iterative process around getting the most out of these campaigns. And then number two, with the integration of CBO having this in-house studio or in-house creative team is going to become more and more important because you've got to keep feeding the system more and more quality creative to find people most likely to do the action. Whatever you set at the top of your campaigns, those are the two main takeaways.
Steve Weiss: I know CBO is the main topic in the E-commerce Facebook ad ecosystem and I just want to keep reiterating that it's going to take a long time to really understand the impacts of this, but I deeply believe that CBO is going to be the best. It's going to be a great tool that everyone's going to have in their toolbox to really leverage the Facebook algorithm to its most powerful abilities. That's pretty much my main thoughts on CBO. I thought it was really important to really share insight. I think CBO is one of the hottest topics right now and I'm getting a lot of questions and I'm always happy to answer any questions. If anyone emails me a firstname.lastname@example.org. That's all we have today, but we're going to be coming out with more topics around CBO, around automation.
Steve Weiss: I think automation is one of the hottest topics and so that I'm really passionate about. I think that automation there's never going to be a full-scale solution for automation. I think human with automation is the recipe for success. But automation by itself, whether you're an automated bot or whether you're an AI ad serving platform, I don't think, I just personally don't believe that that can ever fully replace the humanistic feel for campaigns. And I'm not just saying that because we are an agency or we're collectum, I'm saying that because we've tried out almost every single AI-driven tool out there under the sun and you still can't replace the feeling of running campaigns and because campaigns are talking to consumers, it's a way of talking to consumers.
Steve Weiss: Well, anyway, it's been great having you. We've we some more exciting topics coming up on the next podcast, so stay tuned. We're going to do a podcast specifically around Google and some of the optimizations coming out to the Google Platform, specifically around automation. I think automation is coming to both Google and Facebook. We're also going to have a CEO podcast where we're going to talk about the defined role of CEOs in this new kind of cut a new ecosystem of E-commerce digital architects. Excited to share, and I'll talk to you soon.