Should You Use Value Optimization with Facebook Ads?

TL;DR

You should test Facebook Ads value optimization if it is available, but be ready to turn it off if performance declines. Ben Heath says roughly 70 percent of 20 to 30 tested client accounts saw a slight improvement, while the others saw no improvement or a slight decrease. Read on to understand how it affects acquisition costs, customer value, and return on ad spend.

Transcript

hi 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 adve... Read More

Key Insights

• Facebook's value optimization aims to improve return on ad spend by targeting users likely to spend more, even if conversion costs increase.
• The feature is particularly relevant after Apple's iOS 14 changes, which impacted ad tracking and targeting capabilities on Facebook.
• Testing value optimization is recommended, but results can vary; some campaigns see slight performance improvements, while others may not.
• Facebook's AI is improving, making features like value optimization more reliable over time as it learns user spending behaviors.
• Customizing ad columns to track purchase value and return on ad spend is crucial for accurately assessing the impact of value optimization.
• Despite potential benefits, value optimization isn't universally effective; testing is critical to determine its suitability for specific campaigns.
• Facebook's advertising platform continues to evolve, enhancing its ability to predict user behaviors and optimize ad delivery effectively.
• Joining Facebook ad communities, like the Facebook Ads Mastermind Group, provides access to additional resources and peer insights.
• "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" (1:58)
• "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" (2:14)
• "i would say that on the whole it has been positive but it's not exclusively so" (2:57)
• "be open-minded don't just blindly follow things because no matter what i recommend there will always be exceptions to the rules" (4:37)

Questions & Answers

Q: What is Facebook Ads value optimization?

Facebook Ads value optimization prioritizes return on ad spend instead of simply pursuing the lowest cost per conversion. It may target people who cost more to acquire when Facebook estimates that they will spend more.

Q: Should you use value optimization with Facebook Ads?

Ben Heath recommends testing it when the option is available in your Facebook ad account. He says it is most likely a good option, but it does not always produce better results.

Q: How does value optimization affect cost per purchase?

Cost per purchase may increase because Facebook can pursue people it considers less likely to buy but more valuable when they do. The goal is for their additional revenue to justify the higher acquisition cost.

Q: What example explains the potential benefit of value optimization?

The transcript compares paying 20 to acquire a customer worth 65 with paying 25 or 30 to acquire one worth 120. In that example, the higher acquisition cost can be worthwhile because the customer generates more revenue.

Q: What results did Ben Heath see from testing value optimization?

He estimates that value optimization was tested across roughly 20 to 30 clients. About 70 percent saw a slight performance improvement, while the remaining accounts saw either no improvement or a slight decrease.

Q: Can value optimization guarantee better Facebook Ads results?

No. Ben Heath says the results were positive overall but not exclusively positive, and he does not present the feature as certain to improve performance.

Q: What should you do if value optimization reduces performance?

Approach the test with an open mind and compare the resulting performance with what the account achieved previously. If results are worse than expected, turn value optimization off again.

Q: How confidently can test results be attributed to value optimization?

It is difficult to isolate value optimization completely when testing advertising variables. Other factors may affect results, although testing across enough clients can provide an indication of the feature's impact.

Summary & Key Takeaways

• Facebook's value optimization feature targets users likely to spend more, potentially increasing return on ad spend despite higher conversion costs. Testing is advised to determine its effectiveness for specific campaigns.

• Post-iOS 14, value optimization's relevance has increased due to changes in ad tracking. Facebook's AI improvements make it a worthwhile consideration for advertisers aiming to enhance ad performance.

• Customizing ad tracking to include purchase value and return on ad spend is essential for evaluating value optimization's impact. Results can vary, making continuous testing and adaptation necessary.