How Do I Set (Ad Group) Budget Cap and Pacing?

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XPO provides you with the option to control budget cap at the campaign level as well as at the ad group level. Additionally, you can also control the pace (as granular as per minute level) at which the budget should be spent i.e. pacing. The budget can be (i) evenly spent; or (ii) spent as soon and as fast as possible; or (iii) dynamic paced to flexibly adjust  adjusted to achieve smoother and optimal performance goals

 

Instructions

1. From the campaign dashboard, click +Ad Group to set up an ad group.

Screenshot_2020-03-17_at_4.03.58_PM.jpg

2. Under Budget, indicate your budget and KPIs, and select your desired pacing option and settings. See below for detailed configurations.

Screenshot_2020-03-17_at_4.59.44_PM.jpg

A. Pacing Options

  1. DAILY: Budget is divided to be spent according to the daily budget cap, where the cap is reset daily.

  2. FLIGHT: Budget is divided to be spent over the lifetime of the ad group. Ad group is stopped once budget is exhausted or it reaches the ad group end date, whichever occurs earlier. 

 

B. Pacing Settings

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Screenshot_2020-03-17_at_4.59.56_PM.jpg

 

Fixed Schedule Pacing

NOTE: if AUTO BUDGET ALLOCATION is used, this pacing option will not be applicable.

As an illustration, assume that you have 2 ad groups:

  • AG1 with ad group budget of $4,000 to be spent over 20 days, with daily budget cap of $200
  • AG2 with ad group budget of $3,000 to be spent over 10 days, with daily budget cap of $250 (i.e. with $500 unused)

 

  • EVEN:
    • DAILY-EVEN (RECOMMENDED): Spend is evenly paced every minute during the day (24 hours), capped by the daily budget. 
      • AG1 Pacing = $200 / (24*60) mins =  $0.14 per minute
      • AG2 Pacing = $250 / (24*60) mins =  $0.17 per minute
    • FLIGHT-EVEN: Spend is evenly paced every minute over the entire flight duration, capped by the sum of all ad groups budget.
      • AG1 Pacing = $4,000 / (20*24*60) mins =  $0.14 per minute
      • AG2 Pacing = $3,000 / (20*24*60) mins =  $0.10 per minute (NOTE: on daily basis, the maximum spent is $250 due to the daily budget cap that's being set)
  • ASAP: Budget is spent as soon as possible. Bidding will accelerate at 10x the pace of EVEN pacing.
    • DAILY-ASAP:
      • XPO will attempt to spend the entire daily budget of that ad group as much and as fast as possible, e.g. within first few hours of that day, if there is sufficient bidding opportunity.
    • FLIGHT-ASAP: 
      • XPO will attempt to spend the entire ad group budget as much and as fast as possible, e.g. within first few days or first few hours, if there is sufficient bidding opportunity.

 

Smart Pacing

SMART FOR A REASON!

Fixed-schedule pacing relies on predefined rules to divide budget evenly over time or in the shortest time.

Smart pacing tries to be more dynamic to adapt to the changing environment. No single pacing setting is the best, hence, depending on the situation, choosing one pacing setting over the other may work better.

Smart Pacing works by optimizing strategies at ad group level:

  • For a fixed priced ad group strategy: the goal is to spend according to schedule, with a secondary aim to improve engagement/clicks as we bid for high-quality inventory
  • For an auto-optimization ad group strategy towards a pre-defined KPI: It works to ensure pacing is adaptive to the market and tailored towards KPI at the ad group level, while not violating budget constraints
  • FLIGHT-SMART: Budget fluctuates during ad group lifetime, while keeping track of total budget spend not exceeding the total budget cap.

  • DAILY-SMART: Budget fluctuates during the day. The total budget spend on that day must not exceed the daily budget cap of the day (must specify the Daily Budget).


C. Pacing Status

From XPO, you can visually analyze the status of your budget pacing. This is based on your daily budget spend to help identify whether your campaign/ ad group is performing (a) On Target - within the budget, (b) Under pacing - under the budget, or (c) Over pacing - over the budget.

Pacing Status Colour Indication On Spend Bar  Reason 


(a) On Target

Daily spend is considered to be at normal pacing and within your target

Green
  • On target = actual total spend > 90% of expected spend AND/OR actual total spend < 110% of expected spend
  • Lies between 91% - 110%

  Screenshot_2021-03-31_at_11.24.41_AM.jpg

 


(b) Under Pacing

Daily spend is underperforming and budget pacing is lagging. 

under pacing = actual total spend < 90% of expected spend

Yellow
  • When campaign/ad group is under pacing but pacing % is greater than 20%
  • Lies between 21% - 90%

  Screenshot_2021-03-31_at_11.31.18_AM.jpg

 

Red
  • When campaign/ad group is under pacing but pacing % is less than 20%
  • Lies between 20% and below

    Screenshot_2021-03-31_at_11.37.19_AM.jpg

 


(c) Over Pacing

Daily spend on the budget is moving faster than the required target.

over pacing = actual total spend > 110% of expected spend

 

Yellow
  • When campaign/ad group is over pacing but pacing % is less than 120%
  • Lies between 111% - 120%

     Screenshot_2021-03-31_at_11.40.14_AM.jpg

 

Red
  • When campaign/ad group is over pacing but pacing % is greater than 120%
  • Lies between 121% and above

Screenshot_2021-03-31_at_11.32.24_AM.jpg

 

 

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