What is Budget Optimization?

What is Budget Optimization?

Budget optimization is the process of advertisers setting a budget on an ad campaign that will be optimized to distribute across ad sets to favor the highest performers.

By distributing more of a budget to the highest-performing ad sets, advertisers can maximize the total value of their campaign. Budget optimization works in real time to determine the most effective use of a business’ ad dollars to help lower cost per result and increase return on ad spend.

Campaign budget optimization also saves advertisers time by eliminating the need to manually shift budgets between ad sets.

ToneDen’s Optimization Engine

ToneDen’s Optimization Engine automatically analyzes the performance of past campaigns and signals of live campaigns using conversion tracking with A/B testing. The end result maximizes the performance of ad campaigns by learning from data and delivering more desired actions to the advertiser.

Learning from Past Performance

Past ad campaigns indicate the quality of each conversion events. The more you advertise, the more data the Optimization Engine can leverage to learn the optimal signals for your future ad campaigns.

The engine begins by analyzing the performance of all past campaigns. After filtering campaigns by objective and reviewing conversion data, the engine divides the summation of each conversion type by the advertiser’s desire action. This will result in a weight for each conversion event.

Analyzing and Applying Each Data Point

While the campaign is live, the engine multiplies each conversion event by its weight to get the conversion score. For each audience in the campaign, the summation of the conversion score is divided by the amount spent on the audience. This results in the total advertiser value per dollar spent on the audience. This information is used to calculate the remaining budget portion for each audience in the campaign.

By considering the length of your campaign, initial signals indicate the potential of your audiences to convert sales in the future. High quality signals determine spending ratios that are continuously updated and applied to the campaign’s budget.

Conclusion

By using ToneDen’s Optimization Engine, advertisers can take advantage of more data and automatically apply complex Facebook ad management strategies to their campaigns. With spend increasing every month on Facebook ads, this solution provides a more robust option for advertisers to protect against wasted spend.