A well-known paradigm of Facebook marketing is that campaign targeting thrives on large audiences. Ever since the introduction of oCPM bidding in July 2012, it was well understood that a broad net helps Facebook’s algorithms pick the users you want to engage.
This concept was great in theory. When applied to real-life conditions, on the other hand, there was a major problem: deciding between broad targeting and the pool of the most valuable prospects. Not all audiences are created equal, after all – some have higher LTV than others. Splitting the budget between your top audiences and the ones who are less likely to convert meant reducing the effectiveness of the algorithms, and efficiency of the budget split.
Look at it like this: even less-than-perfect users from audience A can be more valuable than top users from audience B, but when the audience pools are split, the algorithm won’t know this.
What is Bid Multiplier?
The Bid Multiplier feature, which was recently launched for some Facebook Marketing Partners – Bidalgo among them – addresses this issue by enabling marketers to set value for specific audiences within the same ad set.
If you know that 45-60 y/o men have x2 LTV when compared with young women, you can now target both audiences with the same ad-set but different bid. All you need to do is set a 1x bid for the more lucrative audience and 0.5x bid for the less lucrative one. This way you’re not splitting the pool of users FB can work with, and get the best of both worlds. Essentially, this is your way to tap into Facebook’s algorithm: by pointing out the most valuable users within your audience, you are rebalancing the algorithm towards a better LTV.
It’s All About The Right Data
But how do you decide who’s your most valuable audience? More importantly, how do you assign bid multiplier numbers for multiple audiences in the most efficient manner? Even if you don’t use Bidalgo, where this kind of analysis can be performed after aggregating all of your channel and MMP data, there’s a relatively straightforward way to find your best audiences using Facebook App Analytics.
If you haven’t used App Analytics before, you really should give it a try. This free suite provides numerous metrics related to your apps, which have Facebook’s SDK inside them. For the Bid Multiplier purposes, 90-day LTV is a good indicator of audience value, broken by Age/Gender/Device and other metrics which can pinpoint your most valuable audiences.
But while this can seem trivial, the next step is far less so. Within the bid multiplier feature, there’s a unique targeting option, available only when you use it: “recency.” Basically, you can assign value to an audience based on the last time they have opened your app. To do it intelligently, you can use the “Percentiles” breakdown within the “Activity” section, which can show you the correlation between the number of app launches and purchases.
The Age of Value Is Here
Bid Multiplier is yet another new Facebook feature aimed at simplifying marketers’ job by creating a very straightforward way to tell FB algorithms what’s the end-goal of a campaign. While it’s still not exactly a natural language interface, the concept of Bid Multiplier is easy to grasp and easy to implement.
Its launch is, obviously, a welcome development. That said, it highlights the ever-increasing importance of value-oriented actionable insights. These are beginning to replace configuration toggles and rigid “best practice” adages – a process which is only going to accelerate in the coming years.