Smartly's Predictive Budget Allocation (PBA) is an advanced artificial intelligence feature that continuously allocates your budget optimally between ad sets and/or campaigns to drive the overall best results. PBA allocates more budget to ad sets or campaigns that are set to deliver high results with less spend.
Depending on your optimization objective, PBA can
- Maximize the number of conversions and minimize CPA
- Drive highest Return on Ad Spent (ROAS)
You can use PBA with Meta, Snapchat, Pinterest and TikTok campaigns.
Use data you trust
You can choose the data that PBA uses for optimization. Smartly supports multiple integrations including Google Analytics, Mobile Measurement Partners and server-to-server.
You can also apply multipliers to attribution data based on insights from MMM or lift studies.
Get started with Predictive Budget Allocation
To avoid surprises, we recommend reading the background articles in this section before enabling PBA for your campaigns.
But if you've done so, head on over to Enable Predictive Budget Allocation (PBA) to get started right now!
Benefits of using Predictive Budget Allocation
- Save time and drive better results - automatic adjustments mean that you don't have to spend a lot of time analyzing campaign results and making manual budget adjustments. Maximize delivery towards top-performing ad sets automatically, resulting in lower overall CPA and higher ROAS.
- Better decisions - Our artificial intelligence can make better choices than a human ever could.
- Optimize using your source of truth - you can use your 1st or 3rd party data to ptimize budgets with PBA, as well ad customize platform reported data and combine multiple metrics.
- Optimize across multiple campaigns - create budget pools to optimize budgets towards common goal across multiple campaigns. You can also use PBA in combination with native platforms' Campaign Budget optimization (CBO), letting CBO optimize within each individual campaign, while PBA optimizes budgets across selected campaigns.
- Optimize across campaigns from different ad accounts
PBA also has several advantages over Facebook's Campaign Budget Optimization, such as optimization across multiple campaigns and platforms.
How Predictive Budget Allocation works
PBA allocates more budget to ad sets or campaigns with a lower predicted Cost per Action (CPA) (if optimizing for conversions), or higher predicted Return on Ad Spend (ROAS) (if optimizing for revenue). Since CPA increases when the budget increases, the algorithm tries to find the best possible balance between scale and cost. (You can also choose to automatically scale the budget up or down to reach your target.)
The algorithm examines up to 28 days of previous conversion data. The exact range of data used varies on a case by case basis, but most recent data is always prioritized. Pba takes the following factors into account when predicting future performance and deciding on optimal budget allocation:
- how has performance changed in the recent few days
- distinguish signal from noise - what changes in performance are expected to continue and what are only temporary
- how do changes in spend affect performance, and what would be the performance of additional spend (i.e. marginal performance)
- what is the typical delay of a conversion from impression - helps to estimate performance when spend is changing
Based on the data, PBA estimates how budget changes would affect the Cost per Action (CPA) or Return on Ad Spend (ROAS) levels of each budget item. Budgets are decreased or increased to make the marginal performance of each budget item equal. This means that in the estimated optimal allocation, any spend moved from one budget item to another would decrease the overall performance.
If an ad set does not have enough historical data, PBA also considers historical performance from ad sets with similar optimisation settings. Ad sets with less historical data are also guaranteed a small amount of budget, so that they have a chance to show their performance.
PBA only optimizes delivering ad sets and campaigns
Even though all campaigns and ad sets have a budget on Facebook, their behavior is very much dependent on the campaign / ad set / ad statuses. Let's review the relevant budget terminology to understand which budgets PBA will and not not include into optimization.
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Total budget: the sum of all budgets, including paused, ended and scheduled (not started yet) campaigns and ad sets, excluding archived campaigns and ad sets
The logic is, archived items will always remain archived, but paused items can be re-activated and ended campaigns can be extended -
Active daily budget: the budget of active ad sets in active campaigns
Available as a column in Campaigns View: "Active campaign budget"
In Budget Pool settings, if you manually adjust the budget, it is the Active daily budget that is affected. The budget of scheduled campaigns will only be included in Active daily budget once the campaigns have started. -
Delivering budget: the budget of active ad sets that have active ads
For example, an active ad set in an active campaign is not delivering, if none of its ads are active
PBA only touches the Delivering budget when optimizing budget
Optimizing for revenue
If optimizing for revenue, Smartly models the revenue per conversion and the CPA level separately. If there is little revenue data, the results should be close to the CPA optimization. Note that when optimizing towards revenue you are likely to get slightly fewer conversions, but they should be more valuable. In other words, while we increase ROAS, the CPA might also increase because you can't optimize towards two goals at the same time.
However if the difference in CPA across campaigns/ad sets is much more significant than in ROAS, you may see no impact on ROIAS but still greater conversions volume.
Ad set versus campaign level optimization
PBA can optimize either on ad set or campaign level. The level PBA optimizes on depends on the campaign settings:
- If your campaign uses platform-specific Campaign Budget Optimization (CBO), then PBA can only adjust your budget on the campaign level. Platforms themselves allocate the budget on the ad set level.
- If CBO is not activated, PBA optimizes your budget on ad set level.
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