¶ Budget Models
¶ Introduction
The Budget Model utilizes your located budget for AI Group, set up in Optimize, to help you attain your campaign objectives within the specified budget. It does this by analyzing your historical campaign data and desired targets to suggest changes to your budget. This analysis consists of various factors to decide the optimal daily or periodic spend the Budget Model should allocate toward the AI Group efficiently.
You have the following option to allocate the budget:
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Spending a fixed amount everyday
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Scaling up/down the budget based on performance and seasonality (Optimize V1.2 - not yet released)
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Spending a fixed amount for a specific period
¶ Parameters
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Inputs |
Target Result/Revenue Metric Name Target Result/Revenue value Target Cost/RoAS Value |
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Lookback period |
Depends on the data available and is not fixed |
|
Performance Metrics |
Actual Result Value Actual Cost/RoAS |
¶ Budget Pacing
The budget model starts by determining daily spend for the AI group. This is provided by the user for daily pacing, but for other methods, the model calculates the daily spend. You can see different budget allocation types below:
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User-Defined Daily Pacing: This is the most straightforward approach, where you directly specify the daily spend amount for your AI Group.
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Scaling Up/Down Pacing: Here, the AI takes a more active role. You define a spending range, and the AI dynamically determines the optimal daily spend within that range. This determination is based on two key factors:
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Performance Analysis: The AI analyzes the real-time performance of your AI Group, identifying trends and opportunities. This data is used to adjust spending up or down to maximize your campaign goals.
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Seasonality Awareness: The AI considers historical data to account for seasonal fluctuations in performance. By factoring in seasonality, the model can allocate more budget during peak periods and adjust accordingly during slower times.
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Periodic Pacing: This method focuses on strategically spending the remaining budget within the allocated timeframe. The AI analyzes the remaining campaign budget and historical seasonality trends to determine the optimal daily spend required to exhaust the budget efficiently by the end of the period.
¶ Budget Redistribution
Once the budget is determined for the day at AI group level, AI will redistribute the calculated budget for the assets provided. To redistribute the budget, AI calculates two scores,
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Performance Cost Score
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Performance scale score
By analyzing these scores, the AI determines the direction and magnitude of budget adjustments (increase/decrease) for each asset within the AI Group.
Note: In case of Facebook when the budgets are optimised using CBO (Campaign Budget Optimisation), the budget model will provide campaign-level recommendations and execute budget actions at Campaign level. While adset budgets will be redistributed automatically by Facebook.
When the budget are optimised using ABO (Adset Budget Optimisation), the budget model will provide recommendations for each tagged adset and campaign budgets will be set automatically by Facebook as the sum of adset budgets.
¶ Action Basis Example
Action basis is a column under Action Recommendations that explanis the AI Actions. You can find it by clicking View Recommendations button, on the Action Impact analysis page. The following is an example of the action basis for a budget model:
To Maintain AI Group Level Target Daily Budget Initial Budget Scaled Up USD 600.0 -> USD 1226.17
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CPR Score: LOW; Result Score: LOW
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Performance Index: 0.0 (Rank 3/3)
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Final Budget: USD 1226.17 -> USD 980.94
¶ Analysing the above statement
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Since the budget for the AI group was increased by 2x manually by the user, the Model scaled the budget of each asset by 2x (USD 600 -> USD 1226.17)
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Then for redistributing the budget, it assessed the performance of the asset using CPR score and Result score. LOW signifies Bad performing, HIGH as good performing asset
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It calculated a final metric called performance Index in which the asset ranks in 3rd position in the AI group (3)
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The above rank signifies that asset is performing poorly
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Based on the performance, it decreased the budget from USD 1226.17 -> USD 980.94