To illustrate the process clearly, let’s consider a basic type of campaign focused on generating leads, specifically optimized for lead conversions.
Here’s an overview of the campaign settings:
The campaign employs broad targeting with no specific restrictions on placement, audience, or budget at the Ad set level, making it a complete Advantage+ campaign.
The campaign’s primary optimization goal is the ‘submit form’ event.
Currently, there is no limit set on bids; therefore, the campaign operates under a ‘Maximize conversion’ optimization strategy.
The daily budget is substantial, aiming to cover 20% of the potential audience within a month.
The campaign progresses through three distinct phases once initiated.
Phase One – Learning: Initially, the algorithm assesses your website and begins by displaying ads to a small, targeted group likely to be interested in what you offer.
Additional details on your landing page enhance this process. Consider the following outcomes from this initial phase:
- Ads are displayed to 1000 individuals.
- 25 people click on the ad.
- 10 visitors check out the landing page.
- 3 visitors convert into leads.
Following this, the system analyzes these four converters and seeks to target similar profiles, effectively creating a smaller, refined lookalike audience to show the ads.
Phase Two – Expansion: This phase involves iterative steps:
- Exploit the refined lookalike audience as long as the lead conversion rate remains favorable.
- Continuously regenerate lookalikes based on new converters.
- Repeat the cycle.
For instance, in a subsequent iteration, if ads are shown again to 100 individuals, the click-through rate and conversion rate are likely to improve, given that the ads target users similar to those who previously converted.
It’s important to note that intense competition within the category can impact results. If numerous brands target similar potential users, the pool of users ‘Close to Purchase’ increases. These users are known as in-market audiences in Google Ads terminology.
Active competition can be both a challenge and an opportunity, influencing brand recall and the effectiveness of scaling the campaign.
Phase Three – Exhaustion: This final phase begins when most of the in-market audience has been reached. The system then broadens its focus:
- Targeting top-of-the-funnel users within the same category.
- Reaching out to users who have made purchases in other categories.
These steps maintain spending levels but may diminish campaign performance, increasing the cost per acquisition (CPA). Without a set cost cap, performance decline could be steep. If a cost per lead cap is in place, the system will limit spending.
A common strategy among digital marketers at this stage is to restart the campaign, which involves pausing the current campaign and launching a new one with identical settings to reset to phase one.
Concluding Thoughts Keep in mind three key insights and a disclaimer:
- Implementing a bid cap can prolong the campaign’s lifespan but might slow initial growth.
- The campaign’s results depend on its optimization goals—optimizing for clicks, landing page visits, etc., will influence the type of users targeted.
- Changes between phases can occur rapidly, which often leads to fluctuations in campaign performance as frequently discussed in Facebook Ads forums.
Disclaimer
This explanation simplifies complex aspects of Facebook ad targeting to enhance comprehension, without any formal documentation from Facebook. These insights are based on my experience managing over $100M in ad spend across various brands and regions, and while there are exceptions, this description typically applies to most performance-focused campaigns.
