Scaling Your Ad’s Budget

Scaling Ads

IT WAS THE BEST OF TIMES, IT WAS THE WORST OF TIMES:

Let’s say you’ve found the perfect product. You’ve identified your core audience and created a market match made in Heaven. You start increasing ad spend daily and reinvesting the profits in growth. You are doing everything by the book, and for the first time in forever, it feels like everything is actually working. For one brief, blissful moment, you think to yourself, “life doesn’t get any better than this!”

…Then it happens.

With the ferocity of a runaway train and the heart-stopping acceleration of a downhill roller coaster, the bottom drops out of your sales. Not just a dip, but the bottom literally drops out! You are absolutely blindsided. Everything seemed so perfect, what could have possibly gone wrong?

I’m glad you asked! Let’s take a look.

INTO THE ABYSS:

Scaling is the bottleneck that has broken a million previously successful campaigns. You can ignore it, but then you will be forced to continue struggling to create new campaigns that work. Or you can implement it, and then there are a million other things that can go wrong; ad fatigue, audience burnout, the Roulette Fallacy, scaling too fast (or too slow), overspending, poor tracking, missed conversions… the list is endless!

The good news is, scaling doesn’t have to be complicated, and it definitely doesn’t have to be (nor should it be) a gamble. Properly scaled campaigns are the key to long-term, sustainable business success. However, poorly scaled campaigns can signal the untimely death of an otherwise profitable product.

If you remember nothing else, remember that scaling is ultimately a numbers game. At this point you have already have a batch of active ads and you can tell what’s working by looking at the numbers. That means that unlike in the early stages of creative development, this is a quantifiable, methodical, and replicable process and you can apply scientific methods to it in order to optimize for continual improvement.

WHY SHOULD I CARE?

If you’re thinking that scaling a successful Facebook Ad campaign sounds too complicated to be bothered with, then think of it like this scenario.

Let’s just say you happen to be visiting Las Vegas for the weekend. You make a plan to go to the Wynn Casino to waste some cash on one of the many games of luck they have in house. After looking around a bit, you decide to drop your money on the “one-handed bandits.” There are literally hundreds of slot machines on the floor and the odds are the same on all of them, (slim-to-none), but, from a purely mathematical standpoint there is the possibility (however remote) that putting your dollar in a machine could render an exponential return on your investment. It’s unlikely, but it is in the realm of possibility.

After a long night of feeding your hard-earned dollars into a line of stingy slot machines, you’re bound to be burned-out and frustrated, and considerably lighter in the wallet. Gambling is rarely a profitable venture, and the spray and pray method of “investing” has left many a modern day gold prospector poorer than “Job’s turkey.”

But what if billionaire Steve Wynn himself came up to you and started chatting. You told him about your run of bad luck and how much you really needed to catch a break so things would start going your way. So he gets up and takes you back to a private room with only one slot machine and no other guests. He tells you that this is a special game, only available to his personal friends, and that for every dollar you put in it, you will win you two dollars back. He cautions you to not get greedy, and to play responsibly, but to enjoy yourself and you will have the best night of your life.

…After he leaves the room, you decide to give it a try. So you put in $10 bucks and pull the handle.

And instantly you win $20.

You can’t believe your good fortune, so you put in $10 more and pull the handle… and again, you double your money!

So the question is, if you KNOW you have a winning machine and billionaire Steve Wynn himself has given you the keys to this private room, are you going to leave and go back out on the main floor to keep on feeding your dollars into random machines? Or are you going to stay in that private room all night, playing the winner?

I think we all know the answer to that!

Legendary Las Vegas entertainer Frank Sinatra was allegedly once posed a similar scenario and then asked by the gambler, “So Frank, how many dollars would you dump into a machine that’s giving ya’ two for ones?”

I think we’d all answer exactly the same way Ol’ Blue Eyes did when he said, “I’d dump every last dollar I had in it.”

And that is exactly WHY scaling is so incredibly powerful. Billionaire Mark Zuckerberg has built a machine (Facebook Ads), and when used correctly, it can double your return on ad spend (ROAS). How? Because you are taking a creative property that is already a proven winner and growing it.

That almost sounds like a license to print money!

THE SCALING SECRET:

Now that you understand the power of scaling profitable ads and have zero doubts as to whether or not you should be implementing it in your business, how would you like to know the big, scary secret about scaling that no guru wants you to find out?

…The secret is that there is no secret!

Seriously, the only “secret” to effectively scaling your campaigns is that it is hard work, and most people are too lazy to invest the time necessary to stay on top of the analytics required to run ad campaigns at scale.

That being said, there are definitely some guidelines, rules, and best practices you’ll need to follow to avoid nuking yet another successful campaign during a scaling attempt.

STRATEGIES AND TACTICS:

There are really only two basic types of campaign scaling, vertical or horizontal. Vertical scaling involves investing increasing amounts of ad spend into a singular ad. This is the most common method, and why so many campaigns “break” when an attempt is made to scale them. You are just increasing your frequency in the exact same audience with the exact same creative. It will work up to a point, but once it hits a certain load (saturation point) it breaks.

The other style of scaling is called horizontal scaling. This method is more complex and involves creating multiple variations of your working “control” set and testing these variations against the control to find the control-beating performers.

For example, you can leverage the collective intelligence of the entire Facebook AI to help you find entirely new audiences of buyers for your product. Or you can test an infinite level of variations of working creative to continually find tweaks to improve your ROAS. There are endless ways to implement a horizontal scaling strategy, but let’s talk about a few of the basics.

Increase your audience size:

One of the biggest mistakes made in early scaling efforts will often be a tiny, hyper-targeted audience size that dramatically limits the effectiveness of the algorithm. The AI needs data to optimize effectively, so instead of handicapping it with a restricted audience size, unleash it on a large audience and watch it work its magic!

Increase the size of your Lookalike Audience:

Ad fatigue is inevitable in a small audience for even the best of ads. Many people have found out about the effectiveness of the 1% lookalike audience, but forget that you can burnout an audience that size quickly. You can avoid ad fatigue and burnout in your lookalike audience by increasing it to a 3% or even a 5% to allow the valuable data stored in the Pixel to go to work scoring new conversions in a much bigger playing field.

Location, location, location:

Facebook advertisers sometimes forget what Realtors have known for decades. That location is the key to conversions. So consider adding new geographic availability to a working ad set to allow it to reach a new area or potentially a global audience.

Split test your creative:

Give your proven audience a change of pace by switching up multiple variations of a known converting creative. For example, a good friend of mine that spends an average of $1 million USD per month on Facebook’s Ad platform told me last month that during split testing on one campaign he found that an ad variation using an image with exaggerated contrast absolutely crushed his control set. He has no clue why, but repeated the process across multiple test points and found that this variation of the ad image consistently converts 50%-to-65% better in split tests. Go figure! But that is why you test, test and test some more. So you can uncover these secret scaling gems!

Increase your budget:

This one can cause a gut-check reaction on the more risk averse among you, however, there comes a time when everything is optimized and it’s time to take your foot off the brake and invest in scaling.

That does NOT mean to put your foot on the gas and the pedal to the metal! Resist the temptation to burn up the campaign with a massive increase in ad spend. That could, in theory, trigger the ad to revert to the learning phase and signal a significant regression in the ROAS for the ad.

One safe rule of thumb is a 20% overall campaign budget increase every other day, while monitoring your ROAS to ensure profitability controls. This provides a safe structure for growth and allows you a gradual increase that is much easier to monitor and optimize.

WRAPPING UP:

Best practice is generally to focus your efforts on slow, steady increases (hence the name, “scaling”). It’s not a race to the top of a roller coaster hill… while waiting for an inevitable drop.

Remember, scaling is really just about creating more opportunities for your product to provide value to the perfect audience. As long as you keep that in mind, while scaling conservatively and responsibly, your scaling efforts will have the potential to reap an exponential ROAS.