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Back to Blog

The Power of Portfolio Optimization, Now for Social

Skai™

May  20, 2015

Within paid search, we often refer to portfolio optimization – the act of leveraging technology to take action holistically across campaigns to help you achieve an overarching program goal. Other optimization approaches may make it hard to see the forest for the trees, but portfolio optimization is like getting an aerial view of your campaigns, so you have context of that entire forest – and this point of view can be very powerful when it comes to making marketing decisions.

At Skai, we’ve adapted our industry leading search portfolio optimization for social. With portfolio optimization, social marketers finally have a tool that empowers them to optimize investments on the world’s largest social network. This means you now have the power of machine learning to process more data points and audiences than ever before and dynamically adjust your marketing investments to achieve your goals.

So how exactly does this work? Social Portfolio Optimization drives a group of ad sets working towards a mutual KPI goal and budget. The algorithm automatically calibrates oCPM values and budgets within a portfolio to optimize toward defined ROI and CPA goals. The decisions made for each ad and ad set are relative to all the entities in the portfolio, meaning no decisions are made without the context of the greater picture (remember that forest?).

By taking a proactive approach, the algorithm can calculate the likelihood of future conversions, suppress individual ads that have little chance of hitting the KPI goal, and set budgets as a constraint to increase or decrease spend.

For marketers, this innovation means you can ensure budget goes to your best performing ad sets and that budget gets spent in the timeframe allotted, all while maximizing performance. Meanwhile, you’ll save time by having portfolio optimization automatically analyze your program activity and re-allocate budgets several times a day accordingly.

For the team at Targeted Victory, a digital agency focused on the political sector, automation and time savings were key benefits of portfolio optimization. “Prior to leveraging portfolio optimization, we would have to go through multiple manual steps to aggregate and analyze raw data to determine final acquisition costs and ad performance,” said David Gulugian-Taylor, Director of Ad Operations at Targeted Victory. “Now, we are able to quickly identify best and worst performing ad sets and take action at scale. The efficiencies we gained are now being put toward more strategic initiatives for our clients.”

In a Beta test of Skai’s social portfolio optimization, Targeted Victory saw significant reduction acquisition costs, with the actual CPA coming in at half of the set goal.

Despite the power and sophistication of the algorithms at work here, the portfolios are easy to set up and offer full visibility. Once you can decide which ad sets will participate in the portfolio, you only need to define the budget and the KPI goal and you’re ready.  As the algorithm goes to work, you can see the actions taken and the reasons for those changes.

What you’re left with is a more transparent, intelligent, and holistic social optimization experience – and a forest full of possibilities. To learn more about portfolio optimization for social, contact your account manager today.

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Tags: Facebook, Portfolio Optimization, social advertising
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