Week XIII Pt II: Mama Sai's Advertising Options

For a new business, it is important to find the right balance between long-term and short-term growth.

For Mama Sai's Cookies, that means investing mostly into conversions, with a small focus on awareness. Fortunately, FaceBook offers both of these features, arguably better than any other online advertising platform.

Ads should be posted on a weekly, if not daily basis. Like SEO, ads focusing on awareness should frequent users' feeds gradually over time to establish the authority of a company. Meanwhile, ads focused on targeting potential buyers should be used much more aggressively. A company so dependent on online sales relies on the income of advertisements to keep profits coming in. This model worked incredibly well for Warby Parker, a glasses company that build a storefront from success it earned on digital platforms.

The budget of these ads depends heavily on the strategy taking play. While traditionally, interest-based advertising worked best, the new implementation of campaign-budget-optimization (CBO) adds a new twist to FaceBook ads. Before, it would a standard practiced to invest in $20 increments, testing out different ad copy on different audiences through individual ads. Now, as FaceBook begins to mandate CBO and oust the old advertising tactics, much of the power of the advertiser is relinquished to machine learning. Budgets are set at the campaign level, while the platform's AI determines how best to allocate the budget among ad sets based on performance. This shift requires more capital than before considering so many ads have to be tested at once.

Given these factors, a budget should be set around 40% of the company's expected profit, considering its dependence on the medium. Within that allocation, 80% should focus on conversion-based ads, while 20% should focus on awareness-based outreach, so as to maximize the potential of the ad spend in the short- and long-run.



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