I've generated over $150 million with paid advertising over the past 7 years and so over that time having spent so much money and generated so many in return I have a strategy that I'd like to share with you it's pretty complex when you view it from this vantage point but I'll go through each of the different layers and show you with logic data and experience why I've chosen to do things a certain way and we're going to dive right into it let's take a look at understanding how meta and Tik Tok work at a fundamental level so the first thing we need to understand is the business objective of these platforms it's to keep users happy and engaged why because the more users that are active on Facebook on Tik Tok on Instagram the more inventory that these companies can sell to advertisers a user represents a piece of inventory that can be sold to the more users the more ads that can show up in feed right and so if there are more advertisers and more users the company makes more money which means that if there's more demand more users add inventory is a lot cheaper supply and demand simple economics right which means your business can grow and so the simple formula that I've created based on the business objective of these platforms is to create better user experiences which lower the cost for advertisers like you and I to run ads which means that the company makes more money and the cycle continues over and over again and it's exactly how social media platforms have hooked all of us either from a retention point of view as a consumer viewing stuff on our phone or as an Advertiser spending millions of dollars right and this formula has massively influenced my decision-making process when it comes to creative testing so we should test ads and set up our ad account in a way that is conducive to the business objectives of these platforms if we do this our cpms or Blended cost per 1,000 Impressions will lower over time giving us an edge against our competition which means we can outbid our competition why because meta treats our business as a benefit to their business objective conversely if we ignore this and we don't operate our account and creative testing in a way that is conducive to their business objective our cpms go up our costs go up and our competition gets an edge over us we need a systematic process to make sure that things get done the right way all the time so that's how the algorithms work so let's talk about the actual creative testing strategy and we'll start over on the right hand side there are three budget optimization decisions that we need to make when we're about to set up a new creative test in campaign we can choose adset budget optimization which is where we localize the budget at the adset level this is traditionally how things are done we can choose campaign or Advantage Plus budget optimization also known as CBO where we set the budget at the campaign level and then the algorithm disperses among all of the active adets and chooses how much budget gets pushed to each ad set each day dynamically depending on who the algorithm thinks will convert the best and then of course we have Advantage Plus shopping campaigns which is a mixture of CBO and allinone but rather than having ad sets we have kind of a ASC CBO hybrid where we have different ads within the ASC and then it functions like a CBO where the ASC campaign will choose the ads that get the most spend rather than the ad sets with CBO now my personal preference is to use or adset budget optimization for Creative testing why because we get to set up our creative tests in a controlled environment where it's really really good and optimizing for Creative learnings CBO and ASC are excellent tools for extracting scale on a winning asset but they're not very good for extracting creative learnings and so the controlled environment that provides allows us to set a set daily budget for every creative test choosing one audience which means we limit the variables that we're testing at the same time time we have congruent ad settings we leave tests online for an average amount of time and we deliver the scheduling at the same time every single day when we have all of these variables as a constant as a control we streamline the whole process leaving the ads or the creatives as the only dependent variable the only variable that we can realistically judge success on it's either the ads didn't work or they did work because all of these other settings are the same now on the adset level there's a couple of important things to cover number one is the daily budget and the truth is that there's no set daily budget recommendation that can universally apply across every single ad account because it depends on a lot of different factors your average order value your desired customer acquisition cost how much or how many creatives you're testing and how much you can afford to invest in Creative testing while not generating a profit right and so there is a Formula that I like to use for conversions or sales campaigns and that's you take your average order value divided by your Target customer acquisition cost times 100 and if it lands on on a really weird number you just round it to the nearest Fifth right now if you take this formula and you do this formula and you're like oh my gosh this is too much money for me to be spending on each adet or each creative test okay well at a minimum choose $50 per day anything less than that and you're not going to be spending enough money each day to build a proper optimization process in other words you're not spending enough money you're not letting the ads learn for long enough to be conclusive in whether or not you're actually seeing success or a failure from that adet now when it comes to scheduling typically what happens is you upload an adset it goes through a review process and your daily budget gets dispersed linearly throughout the day meaning each hour of the 24-hour day you have some ad spend getting pushed to each hour even if it's not directly proportional right 1:00 a. m. in the eastern coast if you're in the United States is not going to get as much daily budget as 5:00 p.
m right basically for the most part now sometimes there's a glitch unfortunately which means that if you upload an ad and it gets out of approval at like let's say 900 p. m. eastern time well occasionally what happens unfortunately is that the entire daily budget that you set let's say it's 500 bucks a day the adet spends $500 a day in 3 hours there's no way your performance is going to be as good if you spend all of your daily budget in 3 hours as opposed to linearly throughout a 24-hour cycle and so the best thing that we can do in order to fix this is take action and take preventative measures right I recommend that we schedule every single creative test every single ad set at 1201 a.
m. the following day and so if you set up an ad at 8: in the morning you schedule the ads to go live the following day at 12:01 a. m.
