Cost Caps Are Too Volatile - Real Ad Account Breakdown transcript

I've got an actual ad account breakdown for you showing you some cost caps that have gone wrong for somebody so somebody reached out to me and said hey my cost caps are not working correctly why are they not working correctly can you do a breakdown of it and would that be okay I said that shouldn't be a problem and as long as I can share it so I'm going to share with you this actual ad account and there's a lot of information here but first I want to show you the problem that Jessica the woman who sent this to me has highlighted and I'm going to show you that by looking at this data table here so this is this is a a sheet that I use for a lot of clients of mine normally I actually include a whole bunch of information in it including Google ads and Shopify data and a bunch of stuff like that but right now I just have the metadata and one of the things you'll notice if you look in the actual ad account is that there's a mix here of 7-Day click and one day view for all of these campaigns so one of things I'll tell you right away is that any Advertiser ought to change that to 7day click or one day click and get rid of the view conversions maybe include engaged view conversions that's reasonable to me but definitely get rid of all other view conversions because one of the fundamental problems in an ad account like this with cost caps especially is that if your Target if your cost cap is set to include view conversions you're going to get a lot of stuff that doesn't actually lad to Performance what you really want to do is see what happens on a click basis and then see what happens beyond the one or 7day window that meta gives you but actually with your attribution set at setting at at 1 day or 7day what you want to pull in is in fact 28 day click data if you don't know how to do that you just go to compare attribution settings right here and we can add in this and we'll go ahead and just add in all three of those so that you can see it here and what you're going to see this is back in September okay is that the reporting that is native to meta is showing a 1.1 here that's because it's 7-Day click with one day view so with view conversions it's there but if you just go to a click basis there's a 1.85 a 0.95 and a 1.01 on longer time Windows okay now that records data records purchases on the day of purchase not the day of Click you have to factor that in but what I end up doing when I'm trying to get my head the first thing I do when I'm trying to get my head around what's going on in an at account I try to get all the data in front of me and I try to get all the data to be the same reporting okay so I want to know how all of these performance over time are comparing to each other and I want to compare apples to apples right so I take this I export all of the data on a 28-day click window and I include some some secondary metrics in here as well just just in case there's anything weird that's coming up all of these columns here but mostly I this is what I care about spending Revenue okay and you'll see why Jessica reach out to me pretty fast like look at January so all of this is 28 day click Revenue okay so that's the first thing but you'll see why she reached out to me like these these four months are tricky and what you can clearly see here is a growing brand that's spending more than it ever had before with cost caps and when that happened one of the things that happened of course was that they stocked out because they started performing better than they expected to okay so they have a couple of moments where something like that seems to have happened performance is really steady and then they scale up to a 0.9 and this is where you're starting to feel really good about things right you've gone from in a few months you know 11.8 at the peak of 20203 all the way you know not too far from there to 37 that's a really good feeling after getting 20 in December presumably backlogged in the month in this case it's doesn't it's not a holiday brand so presumably the back end of the month starts performing well as they launch cost caps January goes up even more there's a health element to this brand so that's not super surprising cpms are also lower in here also not surprising because of the seasonality February kicks back down again probably a stock out there March goes back up as you get things going again and you're now you're ripping 51,000 0.9 on 28 day click this is obviously lower than what you have here but crucially this is reported on the day of purchase not the day of click and so what happened s most times in an ad account when you see a bunch of spend go forward in one month if the revenue is being reported on the day of purchase there's going to be a delay to realizing all that Revenue people are going to click today and buy in 3 weeks when that happens okay um if you spend a lot more money out of nowhere then a bunch of that um data is going to actually acrew into the next month and that's exactly what you see here March goes 51k out of 0.9 the next month the spend completely goes away again probably because of a stock out you get 3700 at a 2.36 that's not because this 3700 suddenly produced at a 2. 36 it's because this $872 is reflecting that Revenue that was driven off spend back here and so you put that together and let's see you've got 54 711 against 55 in spend and now you're closer to like a 1: one on click across the two months combined okay which is lower than here now I don't know where the cost caps were set out this whole time but it explains at least why this performance is within the range of this performance as well but then what Jessica said is that there's all kinds of volatility after that and that's the thing that she was really frustrated about now what I would say when I look at this data is it's actually not very volatile when you look at this your your actual CAC here is very close to one another you get a little lower in September which is good and then into October if you want to learn how to think about your ad account the way that I am thinking about this one like really understand and master how to leverage manual bids and all of their money-making money-saving power in your meta ads account and there is no better way to do that than using admission from Common Thread Collective like if you've heard me or others talk about bidc caps cost caps TRS campaigns you should join admission and get all the info you need to use them in your account with expertise like really really Master them admission is an educational platform that is closed and gated that has a bunch of really cool stuff in it including structured well- packaged upto-date courses with new content coming out all the time for exactly how to do this with meta ads and and really a lot of everything else that makes profit driven e-commerce D Toc practical for you and actionable for you in your ad account there is no tool like it and here's the best part if you would like someone like me to do this exact exercise for your ad account admission comes with coaching access there is very affordable coaching from experienced manual bid based media buyers from Common Thread Collective people who are buying lots and lots of manual bid based meta ads for large accounts small accounts everything in between those media buyers can will will look at your account with you coach you at $150 an hour which is an insanely good deal and even better you actually get the first of those calls for free or you can get four of those calls for free if you sign up for a year of admission it really is the best place over and over again I say this to people it's it's the best place for you to get this kind of information in your ad account go check it out right now by following the link in my show notes so you can get that offer free coaching calls exactly this kind of help with your ad account that you're seeing in the ad account I'm looking at right now for your ad account do it you will save yourself money and you will make yourself more money in the process what I'm going to do is I'm going to go try and look at those big movements in the ad account so let's go see what was working in January okay now uh let's go see January campaigns okay again I would move everything to a click basis in the ad account that's going to be one way you're going to make your cost caps work better for you because if you put it all on a click basis you're going to be able to put your exact number that you want on a on a cost cap recognizing that you're not going to realize the full value of your spend on the one or 7-Day window you choose by the way in this case if I was trying to drive subscriptions I'd put it on one day click if I was trying to do broader website purchases I'd put it on 7day click but you would do all of that okay and as you do you're going to have an easier time guiding your cost caps because the the number you put into your cap is going to be a true reflection of the actual output you get now what I don't have access to is Shopify here I don't know how the actual CA changes relative to all we're going to take meta numbers basically as gospel here so let's look in January what happens in January is you get a bunch of different adsets here all with cost caps I love to see this build this is actually great I think the campaigns here are set up by different products she's hidden what those products are but the campaigns are set up by different products here she got a quiz funnel separately that's not spending and basically two products two campaigns cost cap set at these levels this is a really good setup I think and it's not surprising to me that that worked now again this is January there's a health orientation to this product and when you do that it's not super surprising that you see extra good performance I my immediate response to that is that it's probably seasonality so um it's probably why that's pushing that forward really strong setup and you've got things really working so let's go into March and see what happened there so in March you've got let's see oh it looks like the second product started to take off so basically the same setup oh no we'll go sort by amount spent there's a little more here now we've started to add a few more other things in here including some Advantage Plus you know a few little things trying to get fancy looks like it works okay but still the vast majority of the spend here is in these two campaigns I'm not sure exactly if this is a different products or not but you've got maybe this is a Tas campaign let me check Advantage Plus uh let's see no that's still maximiz number of conversions so yeah still still a cost cap but you've got basically some additional campaign in there for whatever reason and probably this is something I wouldn't do here I would probably push this back into these two unless it's actually a different product and run these things the same way cuz still what's driving the majority of the spend increase is these two campaigns this campaign actually didn't perform particularly well anyway so I'm not sure what's going on there but I wouldn't have done that I really like that January setup a lot and I would keep that going forward now most likely what happens after that is that you just are out of seasonality and so you know when your CPM goes from 27 to 40 over that time uh it may be a good thing in one respect because normally a better CPM means that you get better performing ads like that's that wouldn't be super surprising but yeah here's now you got in May this campaign's taking over I probably would kill that and just keep these two campaigns going with cost caps these to CBO campaigns but realistically the the one time where cpms um actually do tell us something is when it's reflective of seasonality in your category okay so I don't care in a vacuum what the average CPM of a brand is it doesn't matter to me at all because ultimately meta is really good at putting your products in front of the right customers this is a health oriented product cpg and so yeah it's going to be a little more of an expensive CPM maybe targeting women specifically I don't know but it's probably lower in here because January is a low CPM time of year across the board and so um relative here I wouldn't go try and chase this I would just assume that at some point that comes back it looks like it didn't quite come back all the way last year but it is still lower than what it was in here and so that's probably some movement like that maybe some ads hitting maybe some delivery to different customers but it's not something I would go manually try to mess with on the other hand you've got the ultim the reverse here October is not a great time and this kind of category did the spend is okay here relatively speaking November December you're going to get slaughtered in a category like this until you get to the last week of December I'm guessing that's what happened here let's go check let's go see was was a lot of that spent in the last week of December Q5 so to speak let's see yep 10 grand there you go of that of that 25 Grand what is it yeah for the month 10 grand of it as in the last week and that's uh just because obviously of the seasonality and of the timing um for a non-holiday brand anyway when I look at all of this my big takeaway actually is that this spend is less volatile than it looks I would basically stay the cour year I'd go back to trying to spend my money at my cost caps at a click-based Target that makes sense I'd run those again and my guess is the reason somebody thought there was a lot of volatility mean you look at this and like costs seem to do the thing that somebody would have expected here once you get out of the stock out it's like this is remarkably consistent performance youve got more spend happening when you're actually hitting and beating Target in this month um you know same thing here in October you're kind of um pretty close to this I would just consider that the normal range of volatility but you've got a relatively consistent CPA here I would just basically be running those things as is if it was me and I was in a cpg based category like this I would push everything to one day click push everything to Landers if there's a health component of it Landers that are pushing subscriptions specifically and then um I would probably also layer on this is one thing I think this account is missing tros campaigns tros campaigns often you have to set the target higher than the actual Ros that you want sometimes to the tune of 2x what you actually want but I would be doing that as well because a lot of times you'll get additional spend by doing that but mostly I would look at this and say this is actually an account where the where the um cost caps seem to be performing pretty well now more recently they've actually moved to an auto bid account or to an auto bid setup now you can see it's at a87 so they're getting more spend out now or something like their old spend but that spend is at a number that really isn't that great compared to the historicals 0.9 on the last seven days at the time of recording this um you know that 087 is somewhere closer to these numbers but you know not not really any better or anything than here it looks to me like it's producing about the same thing I would go get my cost caps switch everything to one day or 7-Day click do some math to try to understand exactly what number I need on one day click or 7-Day click to get a 28 day click number that ladders out to here the way I would do that by the the way is I would just go back here and I would say like okay if I look at some campaign that's turned off let's just go to here okay and I would say go into conversions Product 2 some campaign that was turned off um let's see yeah a bunch of these are turned off here let's just take this one we'll just do this this is an easy quick way to do it let's take the maximum spend Perfect 14 Grand what I would do is say this is a sort of completed time window all done there's no more attribution left to be had in this and I would take 93 over 839 3 over 83 so it's a 12% lift from day 1 to day 28 and basically assume that lift goes from there uh and then basically carry that forward for others i' probably do that for a few other adsets check that for other adsets that are turned off and assume that so if I wanted a one: one let's say on 28 day click then what I would need to do is figure out okay if if 12% is my assumption of one day click then let's see um 0.12 let's see it would be 1 / .12 that means I would need 12% let's see 1 divid 112% that would get me there that would be 89 so if I want a 28 day click Rass of of one I need a one-day click rows of 089 and that's probably going to louder there I would do that same exercise for a few other adsets that are turned off take an average and assume going forward that's the number that I can go for on one day click and then build my targets that way I may if I really wanted to make sure I got spend Out start a little above that and keep my budget a little bit lower just to make sure I'm getting spend to those adsets I'd also turn off basically every ad that has been turned off in this account put them all in there one CBO at the product level have all those adsets there set that cost cap with the same number for every single one of them and then see what kind of outcome I get so go back to a much more Consolidated simple setup like we had in this account back in January okay that's the way that I would think about I would want these two campaigns assuming two different products running basically side by side CBO adet set with the cost cap that was going to lead to the number that I wanted on 28 day click on a click basis with that assumption and then um again if I wanted to start them a little high to guarantee some spend I could do that same thing there to make sure that I actually get some spend out the other thing I would do here is I would commit to it I would make sure that I was running this without having any other campaigns in there doing any other stuff to try to layer on top commit to it if the numbers you're getting if the performance you're getting is not in line with your targets that means the cost caps are telling you that you have not gotten there creatively or landing page wise and that's frustrating but nothing's broken I mean that's just just the reality of things um youve you've shown that you can get there at some point find what angles were working before and go do them again so hopefully had some help to My overall take here is there's just less volatility than it looks like it's this this is all within the range of sort of normal performance at lower spends on a day-to-day level it will look like for a couple days at a time here and there that things are bad but that's just because you don't have that many purchases lining up at any given time and so there's going to be small samples when you're analyzing things dayto day when your business at this stage and you're hovering over the ad account you're going to be really tempted all the time to go like oh gosh like oh it's so bad today or something like that but you have to trust larger samples to build you're constantly in small sample land and you got to make sure you you get out of that and don't do too much tinkering all the time let the spend happen at the cost caps that make sense for your business commit to the cost caps add T Ros bids push everything to click basis and then build the rest of your funnel around it build your creative build your Landers build your subscription plan all those things all around that [Music]