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The Value of Optimizing Ad Set Budget Allocation

The Value of Optimizing Ad Set Budget Allocation

By   September 12th, 2017

Digital marketers continually pursue optimal performance. This is especially true for ad budgetsthe foundation on which audiences and creatives are built.

The more efficiently marketers can allocate budget towards performing audiences, the more likely they’ll see positive returns on investment. That said, monitoring and managing audience budgets is a manual task that can quickly grow to drain valuable marketing time and resources—especially considering the volume of campaigns that are typically created and active at any given time.

How can digital marketers improve their ability to efficiently identify and scale opportunities for optimizing budgets?

We designed Marin Budget Allocation (MBA) to solve this dilemma.

What is Marin Budget Allocation?

MBA is a proprietary algorithm that automatically adjusts budgets within your campaigns based on top-performing audiences.

How MBA Helps Advertisers

When activated for a campaign, MBA:

  • Saves time
  • Drives efficient performance of your main KPI
  • Maximizes conversions
  • Rewards the lowest CPA

Typically, marketers build ad sets in campaigns around a number of different target audiences. Performance for each target audience can vary depending on demographics, interests, and engagements with a brand, and products or services.

As a common best practice, advertisers will often look to monitor ad sets and their performance, checking them multiple times a day, and manually reallocating budget towards the best-performing main KPI.

This practice can be very time-consuming for advertisers managing a large number of campaigns at scale, and across business objectives that can span both branding and direct response goals.

Marketers have a finite amount of time and attention they can devote to active campaigns, which can potentially lead to missing out on key budget reallocation decisions.

To solve this, MBA improves the performance review and budget allocation practice by continuously monitoring ad set performance, and automatically reallocating the campaign budget towards ad sets driving efficiencies in main KPI performance. Data drives the process.

ads settings

With automatic budget reallocation, a marketer can more comprehensively account for performance of multiple campaigns at the same time. Missed opportunities for optimization? MBA minimizes these moments or eliminates them altogether. Main KPI performance improves, as does return on ad spend.

MBA Best Practices

Use Lifetime Budgets

When used in conjunction with MBA, the Lifetime Budgets option provides for more even pacing of the available campaign and ad set budgets. For example, with the Daily Budget option on Facebook, you can have spend variance, as ad sets can spend up to 125% of the allocation for a particular day in the campaign flight. If you spend more than 100% of the Daily Budget, on the next day you could see a scaling down of the total budget allocated towards serving impressions.

When you use the Lifetime Budget option, a calculation based on the remaining budget and remaining campaign schedule more evenly controls the spending limit and pacing of each day.

We’ve also observed efficiency gains in Lifetime Budgets and recommend pairing them with MBA. If you commonly use Daily Budgets and would like to activate MBA, simply multiply the number of days you expect to run the campaign by your typical Daily Budget, and set that total budget for the campaign with the Lifetime Budget option selected.

A/B Test Studies

We encourage you to set up Ad Studies to help understand performance gains, using a scientific approach to A/B testing.

For example, activate MBA in one campaign, allowing it to make budget allocation decisions for the campaign. In the other campaign, continue budget allocations manually. Be sure to keep only one variable—budget allocation actions—as the differentiator.

Alternatively, you can run a campaign without MBA, comparing performance versus a campaign with MBA active.

We recommend creating at least three rounds of A/B tests. Our account managers can collaborate with you to recommend best practices for modeling Ad Studies, reporting on results, and incorporating effective tactics.

Summary

MBA is designed to help advertisers address common pain points, including:

  1. Yielding the most efficient results from budgets allocated to an audience
  2. Minimizing missed opportunities for optimizing budgets
  3. Supporting enterprise marketing efforts at scale

To get started with MBA today, just ask your account manager. Or, if you’re new to Marin and have additional questions around improving your marketing strategy and identifying opportunities for optimization, get in touch with us.