Digital Marketing Campaign Optimization


At a high level, Campaign optimization is relatively simple.

  1. If it works, keep it, and spend more money there. 
  2. If it doesn’t work, stop, and learn from your mistakes.
  3. Try something new, see if it works better than what you’re currently doing. 
  4. If it works, keep it up, and spend more money there. 

It’s a four-step process with three unique steps. However, it often sounds much more complicated than it needs to be. Some people even try to make it sound more complicated than it needs to be by design. My goal is to better prepare you for those conversations. Let’s walk through this using some very light math. I know not everyone is great at math, but we’re not going past the same shopping skills that let you realize 40% off is a better deal than 20% off. Or, the same rationale that tells you it's only a deal if you were planning on buying it in the first place. 

Before we start optimizing, we need to plan our campaign. When I teach at General Assembly, we focus on the Objective First Framework. 

Objective First Framework.png

Objective: Goal of your campaign, such as lead generation or sales. 
Define Key Performance Indicators (KPIs): The metrics that will help you understand how efficiently you’re achieving the goal. For example, Conversion Rate. 
Design Tactics: Methods for presenting your business value in a way that focuses on customer/prospect need. 
Execute Campaign: Push go. It’s time to get some data coming in. 
Measure Outcomes: Make sure you have the right tracking in place such as the Facebook Pixel, and Google Analytics.
Optimize Results: Identify opportunities for improvement based on our goal and KPIs.

For this example, I’m going to focus on paid Facebook Marketing, but the process can be applied to paid and non-paid campaigns on various channels. 

My goal this quarter is to sell 1000 units of shirts for the fictional company, "Ironic Message T-Shirts". I have a total budget of $5,000.

pobodys nerfect.png

Now, let’s say I initially target four different audiences for this campaign, and the results were as follows: 

Campaign Data 1.png

The Cost Per Acquisition (CPA) is the Amount Spent/Acquisitions. An acquisition is someone buying one of my Ironic Message T-Shirts. In this example, we’re assuming each person only bought one shirt. 

We have a budget of $5,000, and a goal of selling 1000 T-shirts, so our target CPA is $5 ($5000/1000). As you can see, our current CPA is $5.46, and we only sold 916 units. 

Time to start optimizing. I’ll want to focus on CPA as my main KPI. To get the most out of my budget, I need to pay as little as possible for an acquisition. Therefore, Audience C is the best performing audience, since it has the lowest CPA. It would be great if I could just spend all my budget in Audience C. However, this often isn’t the case since for a few reasons.

  • Believe it or not, there is a finite number of people in Audience C who want these T-Shirts. You’ll mostly likely hit a point of diminishing returns, and your CPA will start to increase as your Conversion Rate decreases.
  • The audience isn’t big enough to generate sufficient sales volume.  "Hipsters who watch Kristen Bell movies" may be the perfect audience, but that’s a pretty tight niche.

We’ll have to spend money in additional audiences, even though they aren’t as efficient. In the following example, I’m also capping the amount we can spend in any one audience at $1,750, which reflects the constraints in audience size.

There ya go, we’ve optimized our campaigns. We were able to obtain 1,121 conversions as opposed to 916 conversions with the same budget. This reflects a 22% increase in conversions. We should also start identifying Audience E so we can continue testing. In an ideal situation, you’ll be able to increase overall budget as your efficiency increases. 

Here’s where this knowledge becomes crucial, especially if you don’t plan on running your own campaigns. Some of you may have been approached by a consultant or agency saying they can increase your conversions by X%. 

They can’t say that with any certainty without seeing your data first.  

However, they can say they’ve been able to help their clients optimize their campaigns by 20%, at which point you should start asking for references. 

This information can also help you determine how much budget you need to hit a specific volume goal. You'll first start with a budget, then determine how many acquisitions you can afford.

Want more volume? Increase your budget.

This is optimization at a high level, but it does get a bit more complicated. What happens if someone sees my Facebook ad and my Google ad? Which channel gets the credit? That’s where platforms like Adobe and Google Analytics 360 come in handy, they can help you better optimize your campaigns across various channels. We start leveraging machine learning and proprietary algorithms at that point, but the process is still the same. Spend your budget in the most efficient way possible, continue looking for more efficient approaches. Since these platforms come with an increased cost, they should pay for themselves through increased transparency and efficiency.

Need help setting this up for your own campaigns? You can download a template here. You can also use some of the following resources for industry specific KPI benchmarks.

Facebook Advertising Benchmarks

Google AdWords Benchmarks

This will be helpful when you’re first getting started, but your own data is always the benchmark for optimization purposes. 

Interested in bespoke campaign optimization? Send me a note and we can chat about it.