I help companies to build a more cost-effective, accurate and transparent Ad Tech.

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A simple algorithm for cross-channel ad spend optimization (7/15/2019)
Reading Time: 1 min.

How do you decide how much to spend on Google or Facebook? It depends if today is the launch date, end date, or somewhere in between of your campaign.

First, you need to set duration and global budget for your cross-channel campaign. Let’s say you want to spend $300k in 30 days. In other words, you are targeting to spend $10k per day, for 30 days.

The second step is to decide which channels you are going to advertising on. Let’s go with duopoly Facebook and Google.

If today is the launch date, allocate half of the daily budget to each channel: $5k to Facebook and $5k to Google. Let the campaigns run for a day.

At the beginning of day 2, compare how much you’ve spent and how many conversions you’ve got from each channel.

Facebook: $4.5k spent, 225 conversions, $20 CPA.
Google: $4k spent, 400 conversions, $10 CPA.

In either channel, you haven’t spent your total daily budget, but that’s fine. What is important is in Google you’ve got more and cheaper conversions.

Cut Facebook’s daily budget by half, and for Day 2 use:

Facebook: $2.5k / day
Google: $7.5 / day

Repeat the process every day. It is important that you don’t change the target audience or creatives; otherwise, numbers will fluctuate, not because of the channel or because of the day in the year, but because different people saw different messages.

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