Presented by Consumer Acquisition
It’s the rise of the machines… minus Arnold.
Google and Facebook’s advertising platforms are rapidly implementing features that allow almost any advertiser to use algorithmic campaign management to optimize their campaigns.
If you’ve been buying advertising from Google and Facebook over the last few years and trying to beat their algorithms, you probably knew that already. Both platforms are actively pushing advertisers toward algorithmic campaign management. New, machine learning-driven features have been rolling out every quarter or so for a while.
What’s changed is how efficient the algorithms have become at buying media. Just in the last month or so, Google has rolled out Value Bidding, Similar Audiences, Ad Groups, Media Library, and Asset Reporting. Two of those new features (Value Bidding, similar to Facebook’s value bidding, aka “target return on ad spend”) take significant advertising management tasks out of the hands of humans and give them over to the algorithm — aka “the machines.”
Facebook didn’t take the summer off, either. It launched the “Power5” — five tactics it recommends advertisers employ to simplify and improve their advertising results. Each tactic is driven by machine learning. Facebook is advising advertisers to relinquish control of advertising to an algorithm that doesn’t have a personal bias, doesn’t sleep, doesn’t drink coffee, and never gets tired of re-testing ideas.
The Power5 tactics are:
- Auto Advanced Matching
- Account Simplification
- Campaign Budget Optimization
- Automatic Placements
- Dynamic Ads
If you’ve been doing user acquisition advertising for a while, this required adoption of CBO may sound a bit like when Google launched Universal App Campaigns (now known as “App Campaigns”) and forced advertisers to use automated media buying that had been controlled by humans. Google is now offering more human-driven controls, but it advises user acquisition managers to step back from granular campaign management and let its algorithm do most of the work:
“All you need to do is provide some text, a starting bid and budget, and let us know the languages and locations for your ads. Our systems will test different combinations and show ads that are performing the best more often, with no extra work needed from you.”
Facebook’s media-buying CBO automation may not seem quite as big or as sudden a shift as Google made back in 2017, but it’s just another aspect of how Facebook is pushing advertisers to make use of their machine-managed strategies. Facebook is also setting up its advertising platform so advertisers who embrace machine management will have a distinct disadvantage over advertisers who try to stick to old-school, human management requiring a pool of expensive, highly trained UA managers.
This is a crucial shift. Not only can “the machines” efficiently run advertising campaigns now, but if you want optimal performance, you should constantly be testing how to hand over control of your media buying to their algorithms.
That may make UA teams nervous. Usually for one of two reasons:
Reason #1: Can machine-managed campaigns really perform as well as human-managed campaigns?
Yes. Machine-managed campaigns can perform within 10% (+/-) the performance of human-managed campaigns, and this performance is certain to get better quarter-over-quarter.
Want proof? Check out the 30 case studies Facebook has on its Power5 page.
Ecommerce company Kortni Jeane is just one example. Kortni Jeane, a swimsuit retailer, used Facebook’s Campaign Budget Optimization and consolidated some of their audiences to get a 22x return on ad spend.
That is not a typo. They got 22 times their ad spend back in revenue. And they got 57% higher revenue in February 2019 than they did in February 2018.
Here’s the deal: The algorithms work. They can crunch the numbers way faster than a human can. They’re built to review billions of data points, to calculate and recalculate that data to achieve the haloed goal: Serve the right ad to the right customer at the right time.
Reason #2: Is an algorithm going to take my job?
Yes — part of it. We’ve reached the tipping point where humans have to let go of the intra-day ad management tasks they used to control as part of the value they provided to a company. Machines are quickly becoming better at granular campaign management. The good news is that when the machines’ campaign management capabilities are partnered with a human for idea expansion, the combination is very powerful.
If the bulk of your time at your job is spent running reports and poring over spreadsheets to find small pockets of opportunity, you should be expanding your skills. The machines can simply do this faster and better than people can, and by several orders of magnitude.
Does this mean you’re about to be out of a job? Absolutely not!
You have an opportunity to expand your skills into new areas of focus:
1. Learn how the machines do their optimization work, so you can manage them appropriately
Some experts have compared this to a pilot flying a plane. The pilot has this huge dashboard of data inputs they monitor, even though the plane automates a lot of its own systems. But there’s still a keen need for a human to be there, making sure the machine takes appropriate actions.
The human is there to overcome the primary weakness of the machines: The algorithms only do what they’ve been coded to do based on patterns they’ve seen in the past. They cannot conceive of new creative concepts.
2. Prove your value to your employers or your clients in new ways
You aren’t going to be making bid edits or sifting through dozens of audiences and ad sets/ad groups all day anymore.
Don’t mourn this. You’ve got better things to do. Go develop better creative, for starters. Now that every advertiser has access to algorithmic campaign management, most of the advantage advertisers used to get from adtech is gone. If you want to dominate your market now (or even just survive), creative is key. High-performance creative is the only real competitive advantage left now, and this will become increasingly apparent as Google and Facebook’s advertising algorithms take over more and more of campaign management.
If success hinges on creative, it’s time to get serious about creative development and testing. These resources can get you started:
One last word for UA teams worried about these changes: Given the speed and intensity most of us live at now, and the pressures most UA managers are under, should we really worry about machines taking over granular campaign management? Did you not have enough to do? Were you that one-in-a-thousand person just sitting around, twiddling their thumbs?
UA managers have an opportunity to stay ahead of the algorithms. They can pivot away from quantitative tasks that can now be automated, and pivot toward creative strategy and optimization skills the algorithms haven’t mastered.
So let go of the geeky intra-day campaign management and go have some fun with creative! In this new algorithm-driven environment, creative development and testing is the best way to deliver value to your company and your clients.
Brian Bowman is CEO of ConsumerAcquisition.com
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