Meta expands AI-powered advertising tools to boost advertiser ROAS and business outcomes

To help businesses achieve better overall advertising performance, Meta is expanding our suite of products – such as Value Optimization, Incremental Attribution, and Value Rules – that allow advertisers to share information about the types of outcomes they value and how they are measuring success. 

Some conversions are more valuable than others, and marketers want to focus on conversions that generate the specific business results they care about, whether that is maximizing profit, to driving subscriptions that won’t churn, to reaching a certain demographic. In a recent test, we saw that advertisers who used the “maximize value of conversions” performance goal instead of optimizing for the total number of conversions achieved on average a 12% higher return on ad spend (ROAS). 

In an era of AI-enabled advertising where the best performing campaigns are those that have flexibility to find the most relevant customers, our goal is to help advertisers guide our ads system to optimize for the outcomes that are most important to their business. To do this, we want advertisers to answer two questions: 1) What is the key performance indicator (KPI)? 2) How do they measure success or attribute results (across media channels)? 

Defining the business KPI an advertiser wants to achieve

One way we are allowing advertisers to optimize for the outcomes they care about most is through Value Optimization. Advertisers can use this to help hit multiple KPIs. 

If an advertiser cares about ROAS based on purchases [globally available]: We have made updates to our existing value optimization solution, which has helped contribute to the product delivering an average of 12% higher ROAS for advertisers compared to when they solely maximize the volume of conversions. For an example of how this works, a business using value optimization with a $200 campaign budget would prefer $500 in revenue from 3 sales for a ROAS of 2.5 over $400 in revenue from 4 sales for a ROAS of 1.25.

If an advertiser cares about ROAS based on profit margin [now testing]: Certain products are more profitable to sell than others, and for some advertisers, selling a $20 product may be better for the bottom line than a similar $30 product. To solve for this, we are now testing the ability for advertisers to send information through our Conversions API that highlights the profit driven from a sale. We can then use this to help specifically focus on driving ROAS where the return is based on profit, instead of the size of a purchase.  

If an advertiser cares about ROAS based on the value of events outside of a purchase [expanding globally]: Not every advertiser looks at return on ad spend strictly through purchase size or profit. Some calculate ROAS based on value associated with a custom event or a non-purchase standard event, such as getting someone to make their first purchase, or having someone sign up for a subscription. With this in mind, we have introduced ways to optimize for ROAS with non-purchase event values and are expanding it globally. Advertisers can now use the “maximize value of conversions” performance goal across any event they wish, helping them achieve the highest possible ROAS.

Beauty brand Laura Geller aimed to improve their ROAS in campaigns focused on acquiring new customers. They used Value Optimization paired with a custom event of ‘first-time purchaser’ to effectively instruct our ads system to prioritize acquiring new customers who would generate high ROAS, rather than solely focusing on new customer acquisition. Compared to their business as usual campaigns focused on new purchasers, they were able to increase ROAS by 46%.

Determining how to measure campaign success across channels

Advertisers often have unique ways to attribute the ROI of a specific channel or ad platform. To guide our ads system to deliver on what they value most, we need to understand how they measure and provide options to share this with Meta. 

If an advertiser measures the performance of a channel by incremental conversions or incremental ROAS: We recently completed the global rollout of Incremental Attribution, which is the only product in the market that optimizes for and reports on incremental conversions in real time. Advertisers who tested incremental attribution saw an average 46% increase in incremental conversions compared to their business-as-usual campaigns. Even if an advertiser has never run a Lift test themselves, they can simply toggle the setting on in Ads Manager, and we’ll automatically optimize their campaign to drive more incremental conversions. 

If an advertiser measures the performance of a channel with a multitouch attribution tool (MTA): We are now offering the ability for advertisers to share more granular click-level attribution information with Meta (e.g., was an individual click ultimately credited with a conversion) via Analytics integrations with partners like Adobe Advertising, Northbeam, Rockerbox and Triple Whale. This will enable advertisers access to test a new Custom Attribution feature over the next year, where advertisers can incorporate insights from external measurement sources into our optimization and drive more outcomes as measured in their analytics tools.

Bringing Value Rules to more advertisers 

We are also now expanding the availability of Value Rules, a product that gives advertisers the option to set up rules in Ads Manager that assign higher value to certain types of customers, ultimately giving them another way to steer our AI-powered ads system towards higher ROAS outcomes. 

An advertiser who knows that a certain age group is typically more likely to be a repeat purchaser could create a rule that would have them bid more for these customers, since they know that they likely will have higher lifetime value and ultimately help their bottom line. In this situation, advertisers are directly communicating additional business information with Meta to specify how different dimensions drive value for their business.

Ben Schreiber, CMO of Latico Leathers, used Value Rules and said: “Value rules have been a game changer for us. We zoned in on the 45-54 female demographic, increasing bids to this demographic by 75%. This allowed us to put more focus on an audience that we know typically has higher purchase value, while also maintaining broad targeting that would unlock additional sales and help us discover new potential audiences.”

To recap, our aim is that this collection of products, from Value Optimization to Value Rules, will give advertisers new ways to tell us what they want to achieve, so ultimately we can help drive their business strategy on Meta.