Ad optimizations shift based on campaign objectives, market conditions, and target markets, to name just a few reasons. For example, a hotelier may choose to optimize toward conversions to drive overall bookings for a retargeting campaign, but decide to optimize toward link clicks for an upper funnel campaign. What is the best method if a hotelier would like to optimize towards a certain type of traveler? This is where Value Optimization comes into play.

What is Value Optimization?

Facebook’s Value Optimization is an ad delivery option that provides a unique approach for clients seeking an alternative optimization method. While conversion events continue to be the suggested option, by implementing Value Optimization, campaigns can optimize towards total purchase value, rather than simply purchase quantity. This method differentiates a user who may spend a considerable amount on a luxurious travel experience from a user who is looking for an efficient and quick stay. While both users may have the same travel and destination intent, Facebook determines which user is most likely to drive the highest value based on the algorithm.

How Does Value Optimization Work?

Value Optimization optimizes for a stronger ROAS by determining which travelers are likely to have the highest revenue per booking. When this feature is enabled, Facebook will serve your ad to the travelers that will drive the highest revenue. A side effect of this optimization is that the advertising cost increases, but the revenue per booking also increases, giving each booking “more bang for the buck.” The ultimate goal of this optimization is to maximize the total purchase value generated and to get the highest return on ad spend (ROAS).

Best Practices for Value Optimization

When evaluating performance, it is recommended to use the “Purchase Value (ROAS)” metric in Ads Manager to determine impact. If considering this type of shift in optimization, it is important to keep in mind that Facebook is not trying to find every user that may convert or the cheapest purchase conversions. It is working to place your ad in front of users who are most likely to create higher value for you.

Our early findings point out that Revenue per Bookings increased at a similar spend level (actually a lower spend level). Great candidates for this optimization include luxury brands, boutique properties, or hoteliers who are looking to generate higher value customers.

To learn more about Value Optimization on Facebook, click here. You can also learn more about the benefits of using Koddi Social, by visiting our product page.