With all that love … where do CBOs go wrong.
If you’re new to Facebook advertising, please skip this section and video.
For anyone else, let’s dive into the deep end with an overview of how Common Thread Collective scales Facebook Ads for our clients and in-house DTC brands.
Here’s the key …
Campaign budget optimization (CBO) paired with a cost cap bid strategy allows you to control the flow of spend and protect target CPA.
Imagine your campaigns as pipes automatically blocking cost per actions (CPAs) that are too high while unleashing optimal CPAs to flow through:
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CBO Mistake 1: Too Many Ad Sets
Think about the process of analyzing data or running a test.
The more variables you introduce, the more time and money it costs to reach statistical significance. Translation? You won’t have any actionable data to keep optimizing and scaling your spend.
Say you have a daily campaign budget of $250 governing five ad sets each with six ads within them. That’s 30 individual ads that need to be tested in order to determine a winner: 30 variables.
At a minimum, every ad needs 1x AOV to meaningfully evaluate performance: statistical significance. If you’ve got a product with a $200 AOV, the math on that is pretty straightforward:
30 (total number of variables) x $200 (AOV) = $6,000 (total spend)
If you take your total spend and divide that by the daily budget of $250, that’s 24 days until you have any actionable information from your campaign.