What are they?
Budget rules are a workflow automation feature that govern Ad Set budgets of individual Ad Sets, based on their Ad Set performance. The basic concept is a horse race, Ad sets that are performing well are given higher budgets, while Ad Sets that are performing poorly are given lower budgets.
Note: Bid and Budget data is downloaded from Facebook every 30 minutes and compared against the rules below to see if an Ad Set should be changed.
How do they work?
Three inputs are used to control budget tiers and each input can be adjusted to minimize CPA or maximize volume.
- Ad Set budgets - this is the budget that each ad set in the tier will use. The first tier (#1) is the budget and Ad Set will recieve when it is launhed into Facebook.
- Min spend - the lowest spend required in each budget tier or to advance to the next tier
- Max CPA - the highest CPA allowed in each budget tier, if an Ad Set's Max CPA is above the limit you define, the Ad Set can not advance to the next budget tier.
Strategy and recommendations
We recommend launching with the smallest budget that delivers impression by Facebook and then gradually increasing budget tiers for ad sets that perform well based on your rules. This will increase volume while minimizing CPA. Some genres like "casual casino" require much higher starting budgets like $250.00 - $500.00 to get volume.
How to reduce CPA using budget tiers
- Decrease ad set budgets:
- Launch your initial Ad Sets with the lowest possible budget to get impression in tier 1
- Lower the spread between incremental budget tiers - but not less than $50 or you may get too many budget changes per day.
- Increase minimum spend hurdles:
- Specify a higher minimum spend (as a % of ad set budget). This will require your Ad Sets to spend more money before advancing to the next budget tier and only the best ads will advance if your rules are properly set.
- Decrease maximum CPA hurdles
- Same as above.
How to increase volume using budget tiers
- Increase ad set budgets:
- Launch your initial Ad Sets with the higher budgets, this will drive impression faster.
- Higher spread inbetween incremental budget tiers will drive more volume before making additional budget changes in Facebook.
- Higher increases in budgets for each tier
- Decrease minimum spend hurdles:
- Lower minimum spend (as a % of ad set budget)
- Increase maximum CPA hurdles
What should I use for a tier 1 budget?
We recommend using the lowest allowable budget for tier one. If there's no spend (or low spend) for ads, we recommend either increasing your starting budget or your bid to force ads to spend.
How many budget tiers should I have?
We recommend starting out with a minimum of two tiers. If ad sets consistently reach the maximum budget tier, and portfolio volume is low, we recommend increasing the amount of budget tiers so the best ads can continue scaling. As you get comfortable with AdRules, you can add more tiers.
How much should budgets change across tiers?
Bigger increases in budgets for each tier will drive more volume than lower budget increases. If your goal is to reduce CPA, we recommend testing smaller increases in budgets for each tier, $50 is a good amount to test. If your goal is to increase volume, we recommend testing larger increases in budgets for each tier, $100 is a good amount to test.
How should I decide the minimum spend threshold for a tier?
We recommend testing the minimum spend of 2x to 3x your CPA / CPI goal.
What's the best process to test new budget tiers?
When testing new budget tier settings, each of the three inputs has the potential to impact performance significantly. The ad set budget is generally the most important lever for controlling performance, with minimum spend hurdles and maximum CPA hurdles showing less influence over performance.
Does AdRules support Facebook Automated Rules?
AdRules does not support Facebook Automated Rules due to potential conflicts with our algorithm. AdRules offers unlimited, advanced features versus Facebook’s current restriction of only 100 rules.
Technically, how does the system work?
- Predicted spend rate over the NEXT 15 minutes by averaging the last 7 days, same time of day
- Current day spend rate over the PAST 15 minutes
- Using the higher rate, AdRules predicts what the spend will be 15 minutes from now, and issues pauses to all the Ad Sets at around 90% of daily budget (90% is used to account for tail spend).
- Additionally, AdRules slows the rate of spend down by pausing the bottom-performing ads when your percent of budget reaches a certain threshold (80% for CPA and 70% for non-CPA types). This is known as "Soft-Cutoff" and can be disabled in your settings if you would like a more aggressive approach (though this may be more prone to overages).
Warning: Even with these checks in place, budgets can be breached because:
- Facebook data sometimes has internal latency and thus can be incorrectly reported to AdRules via the Facebook API, which can cause a perceived surge in spend when that data does finally come in.
- Market conditions can also cause an unprecedented surge in spend (such as a large competitor suddenly dropping out of the market).
- When you have large budgets and automatic bidding or high bids, the above factors will make the surges more extreme.