Value Optimization with Facebook Ads? Yes or No?

0:00hi guys it's ben heath from lead guru and in this video i'm going to talk about facebook's value optimization feature and whether or not you should be using it with your facebook ads i've had a number of comments about this recently and i want to sort of talk about the pros and cons and say what i think about about this relatively new facebook advertising feature in this video before we get to that just want to very quickly ask you to smash that like button on this video that'd be much appreciated okay so i'm in facebook support document about value optimization i think it's often good to come in here into facebook

0:29business and see what facebook has to say about any features that you have a question about or you should i or shouldn't i use this um the first thing to say and i'm going to cover this more in separate videos in ios specific ls 14 specific videos is that um they're talking about the fact that value optimization has changed the result of apple's ios 14 policy which is unsurprising given what we know about that i'll include a link in the description to more videos about um the ios 14 change and things like that and i'm going to cover this in in a separate video but here i

0:57really want to talk about the value optimization feature aside from uh from ios 14. basically what it does is instead of just optimizing for the lowest cost per conversion which is what facebook will do by default let's say you choose the conversions objective you optimize something like purchases fixer's gonna always try and get you the lowest cost per conversion possible okay that's what the campaign is gonna naturally optimize for if you turn on value optimization facebook might go after people that it thinks are slightly less likely to buy perhaps which means your cost per purchase in this case is going to be higher but maybe they'll spend

1:32more on your site on average so let's say you're used to sp you know paying 20 cost per conversion for a 65 customer okay and then facebook's calculated or estimated that actually these people over here might cost more like 25 or even 30 to acquire a customer but they might be worth 120 each in which case the added cost for that person is going to be worth it because of the extra revenue they generate that's really what value optimization is going in that it's really optimizing for roast return on ad spend as opposed to the lowest cost per conversion and this basically what facebook talk about here

2:09you know um you'll be more likely to have better roast on the conversions you care about okay so the idea behind value optimization is that it's going to help improve roast even if it does mean that your cost per purchase might increase slightly now what facebook recommend here and i'm not going to read this whole thing obviously you can come check this out but they say if you can optimize for value we recommend that you do obviously not everyone can do this right if you're operating a different type of campaign with a different objective or optimizing for conversion events that doesn't really make sense for then this

2:38is going to apply to everyone and and if this does apply to you you will almost certainly see prompts within your facebook ad account if they say we'd recommend turning on on value optimization my recommendation would be yes test it so we've tested this a bunch of times um unfortunately not in you know don't have this available in one of our example ad accounts to show you but we test this a bunch of times and i would say that on the whole it has been positive but it's not exclusively so so i think it's if it is an option for you i definitely think it's worth

3:07testing it on turning it on and testing it but i wouldn't go so far as to say it's certainly going to produce better results it's not like using a lookalike based on previous customers or using the conversions objective over traffic where i can very confidently say that for you that is the best option and you should be using it with this it's most likely the best option but not always so i'd recommend you turn it on i'd recommend that you give it a go but be open-minded to the fact that your results might not be quite as good as you were hoping for they might not be

3:36quite as good as you had previously and you may have to turn it off again that's something that we've done with a number of clients i said oh i don't know how many we've tested this on now you know maybe 20 30 something like that i would say off the top of my head 60 no but more like 70 percent of them um we've seen a slight improvement in performance not much slight improvement um and in the others we've either had nothing or perhaps even a slight decrease in performance now whenever you're testing variables like that it is always diffic difficult to fully isolate that variable

4:07right and so there could be other factors at play but when you're doing enough clients you sort of get an idea for what impact that specific thing is happening i would say on the whole it's positive but um but not exclusively so and i think that's just a good thing to be aware of with all your facebook advertising related stuff by the way guys is that um whether it's you know whether it's a recommendation for me or something you want to test yourself always turn it on with a an eye to this might not be right for my account and i may need to turn it off

4:35or you know testing a new targeting option or whatever be open-minded don't just blindly follow things because no matter what i recommend there will always be exceptions to the rules and you may or may not fall into those for various different things so i would recommend for example that people go with automatic placements most of the time if they're running a conversions based objective um in their campaign but and that's true and that's definitely what i recommend and i've seen that that works best with the vast majority of accounts but um there are scenarios and i've seen these where we've tested doing that and we've tested alternative options and the

5:12alternative options have worked better and it's very surprising and we don't quite understand why and it seems to be isolated to a very small percentage of overall cases the vast majority of the time that advice is going to hold true but there are caveats so it's important to be aware of that the other thing i want to mention about value optimization before uh before moving on is that if you do turn it on um and you know whether it does or doesn't work be aware that this is the sort of thing that we think is going to improve over time ios 14 restrictions and and things aside

5:44we know that facebook's advertising platform is getting more sophisticated they're getting better at working out who is likely to do certain things and what are customers like to be worth what you're basically backing here is you're saying to facebook right i trust your ability to know what a person how much they're basically likely to spend in my store in my online store that's basically what you're saying facebook's pretty good at that they'll know that people with higher incomes for example they'll be able to see data like okay this individual obviously it's anonymized but this individual um on average spends 2.5 times what the average person does when they buy

6:21through online stores right so they get a good idea that if you can get this person to come to your store and they're interested they're likely to buy and likely to spend more or a certain individual spends disproportionately a lot in a specific industry which we probably all do right we have hobbies and things where we spend a lot more money than the average person um that sort of thing okay so what we're doing with these sorts of settings is we're basically saying i trust you facebook to be able to work this out that process is likely to continue to get better and a lot of things that

6:52we now trust facebook with we wouldn't necessarily have been able to do so like a year ago no no no no four or five years ago but now as the platform's gotten better and better we can really say you know what happy to run automatic placements i'm happy to to do these things and i i trust that facebook's going to try and get me the best results and that their systems are sophisticated enough to get that so i'd recommend you turn it on give it a go if you do as well one thing to make sure and the facebook note it down here and i want to

7:17highlight it is that you customize your columns to make sure that you can see purchase value in terms of return on ad spend um because if you're just tracking tracking cost per result you may see that this makes your data look worse because it's increased your cost per purchase slightly for example but actually if you're tracking roast return on ad spend you might go from a 3.5 to a 3.8 or yeah it can be that sort of change with this sort of thing not not massive i don't think but that you want at least want to be able to track that and know the impact that it's having and what it

7:46is and isn't doing okay hopefully that makes sense right if that's useful please let me know in the comments below before we go one free thing i quickly want to mention is my facebook ads mastermind groups we have 73 000 members in there right now one of the biggest communities of facebook advertisers in the world it's free to join facebook group free to join links in the description go ahead and join we'd love to have you part of that community i do free live trainings in there um so i think it'd be well worth doing if you haven't joined already i said if this video has been useful comment below

8:11to let me know subscribe to my youtube channel for more facebook advertising related content um and of course click that like button that thumbs up button that helps me out a lot thanks a lot guys best of luck with everything i'll talk to you soon