How to use Facebook Ads Dynamic Creative to optimize your ads

If you have some experience in Facebook Advertising, there is a strategy you can use to accelerate the testing phase, using the Dynamic Creative feature.

For those who don't know about it, Dynamic Creative allows advertisers to automatically create multiple combinations of an ad's creative elements, such as images, videos, titles, descriptions, and call-to-actions (CTAs). Instead of manually creating each ad variant, advertisers provide a set of creative assets, and Facebook's AI machine learning algorithm automatically generates various ad combinations, inside that individual ad, and tests them to determine which combination performs best.

This is particularly useful because you can run this for some time and then create a separate ad with all the winning elements to have the best combination in that one ad. Then, you can run another test using the best previous combination elements and test them against different headlines, creatives, titles, CTAs, etc., making a feedback loop to improve performance continuously.

Very importantly, you would want a transition where a new winning combination ad would run for 3–4 days (depending on budget) before pausing the previous ad to prevent a drop-off in results.

This is a balanced strategy between leveraging data-driven insights to capitalize on successful ad combinations and continuous testing to discover even more effective creatives and other elements. In addition to the cautious strategy in the rollout of new ads to prevent any dip in results, allowing a period of overlap with the previous successful ads to maintain performance stability.

Google Ads eliminates the ECPC and offers more advanced solutions for Shopping campaigns

If you were using Enhanced cost-per-click (ECPC) for your Shopping campaigns in Google Ads, you should know that Google said that this option will be discontinued in October 2023. ECPC was a way to optimize your bids for conversions, but it is no longer the best option available.

Google Ads now offers more advanced solutions. One example is Target ROAS experiments, and you also have available Performance Max campaigns, which are fully automated bidding strategies that use machine learning to adjust your bids in real time. These solutions can help you maximize your return on ad spend (ROAS) and reach more customers across Google's network.

And of course, if you want to calculate the appropriate ROAS goal for your Google Ads campaigns, you should know these business metrics:

Average order value: average amount that customers spend with you when they buy from you

Customer lifetime value: this metric focuses on repeat purchases

Cost of goods sold: How much does the (average order value) product or service cost us directly to deliver that product and service

Transaction fees: If you are charging people in foreign countries or you are charging in different currencies and have to be converted

Shipping costs: Depends on whether you are selling internationally, domestically, or if you are a service-based business

Sales tax, import duties, export duties: Depends again if you sell internationally or not

Average refund rates: % of refund rate during the average order value period, converted into the number

Break-even amount: The profit that's left after counting for all the costs is the amount that we can pay on advertising costs in order to acquire a customer for break-even

Once you have your profit margin number, you need to determine how many times that number must be multiplied to hit 100% profit. That is your ROAS percentage goal.

For example, if your profit margin is 20%, then you need to multiply it by 5 to get 100%. That would mean your ROAS goal is 500% or €5 in revenue for every €1 spent on ads.

YouTube tests a pop-up window that forces you to watch ads or subscribe to Premium

YouTube is testing a way to prevent users from watching videos without ads. This is a pop-up window that interrupts the video and displays a timer indicating when the next ad will play. Users would have to accept ads on YouTube or subscribe to YouTube Premium in order to remove the pop-up.

YouTube seems to have 2 main reasons for doing this. One is to convince these users to switch to the Premium service, which offers more benefits in addition to removing the ads. The other is to ensure that content creators are compensated for their work and that advertisers have greater reach.

Advertisers will have to be more careful not to over-saturate users, as they may be annoyed by the constant ads, and it may affect their user experience, and end up affecting the performance of campaigns.

Some users might look for other ways to watch YouTube videos without ads, such as extensions to download them, but YouTube says it is also combating these practices. On the other hand, I don't think this practice would be a big concern for advertisers and creators, since downloading the videos seems to be more tedious than simply watching the video with ads.