Any marketer running Facebook ads has drained some of their budget on non-performing ads. This is OK if you conduct some tests and learn from the data, but very frequently it simply happens because you cannot check all your ads 24/7 and pause them on time.
Pausing underperforming ads can have an especially significant money-saving impact for agencies and brands who have 100s of ads running and a monthly budget of $100k+.
In this post, we’ll discuss how to automatically prevent budget drain with automation rules.
If you’re new to Facebook Automated Rules and want to gain a better understanding of what they are in the first place, come check out our comprehensive guide on How To Use Facebook Automated Rules? (Anatomy + Practical Guide).
Automated Rule 1: Kill Ad Sets When Spend is 2x More Than Your Target Cost per Purchase
Scenario: Your ad sets have been running for more than 3 days, the spend is more than 2x your cost per purchase but there is no sale.
What action should you take? This is a typical scenario which indicates that your ad sets are underperforming and you need to take control of your ad spend. Why? Because 3 days is enough time for an advertiser to make a decision about ad performance while the spend is great enough for Facebook to show the performing ads. Therefore, if you make no sales after these conditions are met, just kill the underperforming adsets.
Let’s suppose your estimated product cost per purchase is $10. Therefore, if the spend exceeds $20 after 3 days, you tell Facebook to shut off the ad set. Here’s how this rule will look in Adscook:
Automated Rule 2: Kill Ad Sets That Fall Below the Acceptable ROAS
Scenario: You are running Facebook ads for a retail store with many product categories but you see that your return on ad spend isn’t breaking even and, worse still, is falling below the acceptable ROAS for 3 days in a row. You may be generating some sales, but what’s the point if you’re not generating revenue and are therefore draining your budget?
What action should you take? Before taking any action, you should first define what the acceptable ROAS is for your product.
The formula for calculating ROAS is quite simple: Revenue / Cost = ROAS. Let’s assume your Facebook advertising spend is $1000/month and you decide that you will hit your acceptable ROAS only if you gain twice as much as you spend. In this case, your revenue should be at least $2000 in order to reach your goal and continue running the ad. This means your acceptable ROAS is 2000/1000 = 2 or 1:2, which means that for every dollar spent, you gain 2 dollars.
Now that you know what your acceptable ROAS is, it’s easier to take control of your ad spend. Before taking extreme measures and shutting off your adset without any further thought, you can still take some steps to improve your ROAS, for example changing the ad copies and creatives, using lookalike audiences or improving your landing page.
However, if you’re still not hitting your acceptable ROAS, simply stop the ad set. You can automate this action by using a ROAS-based Automated Rule. This is how it looks in Ads Manager:
Automated Rule 3: Decrease Budget for Specific Days of the Week and Specific Times of the Day
Scenario: Your data shows that your audience’s purchase behavior changes at weekends and that the ads are not performing as well as other days of the week.
What action should you take? The best action you can take in this situation is to decrease your daily budget by a certain percentage or amount. This action can actually be automated, thus eliminating the manual work you would otherwise have to do every Friday evening.
To apply this rule, choose the action Adjust Budget > Decrease Daily Budget by and enter the relevant value, for example 20%. Then set the action frequency to Once weekly. Leave Conditions empty, then go ahead and select Custom Schedule. Put a check mark next to Saturday and Sunday. If the start time and end time are the same, the rule will run once daily.
Now the rule will automatically decrease the daily budget of your ad sets by 20% while you can enjoy your weekend without needing to worry about your ad performance. In the same way, you can take control of your ad spend at specific times of day when your ads are underperforming.
Here’s how the rule looks in Ads Manager:
Automated Rule 4: Turn Off Ads When Frequency Increases
Scenario: You are running multiple ads and it’s becoming increasingly time-consuming to manually check the frequency of each ad and take relevant actions if any ads are underperforming.
What action should you take? You know that the more frequently your target audience sees the same ad, the sooner they get bored and ignore your ads altogether and the more thinly your budget is spread.
Therefore, in order for your ads to not blow your budget, you should always be ready to act when frequency increases. You can combat ad fatigue in many ways, for example by changing creatives, expanding to lookalike audiences or varying the wording, or going so far as turning off your ads. And if you do decide to turn them off, you can automate this action, thus saving tons of time.
A study by SocialMediaToday shows that the recommended frequency is 1.8 – 4 for optimum ad performance. A frequency greater than 4 is therefore a warning sign that your ad performance may be decreasing.
To apply the rule in Ads Manager, select the action Turn off the ad, set the condition Frequency to be greater than 4 and then Facebook will automatically kill the ads that meet the condition.
But with frequency metric alone, you can’t say for sure that your ads are underperforming as the ideal frequency differs from business to business. That’s why we’ll combine this metric with Cost per Purchase metric. If your target CPP increases along with frequency, this is a clear sign that frequency is leading to underperformance.
See how the rule will look like:
Facebook advertising is not cheap and is not as easy as some people might claim. You should always keep your finger on the pulse to identify areas where your budget is being blown and therefore reduce your costs.
The optimization rules we described above are just a few ways in which you can manage your ad spend. We welcome you to share your own strategies – we’d love to know what actions you take in different scenarios and how you’ve succeeded so far.
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