How to use campaign budget optimization

Managing multiple campaign budgets is usually a long and complicated process. Allocating budgets between each audience may take a lot of time and you can never be sure that all decisions are 100% correct. That is why there are a lot of tools that can help you to do it right: AdEspresso, Qwaya, AdStage, Adynamite, and others. 

To help solve this problem, Facebook created a special Campaign Budget Optimization (CBO).

CBO is based on the machine learning algorithm and aims to simplify the budget managing process and make it more effective for advertisers. The main idea is that the use of CBO helps to control how much budget should be allocated to each ad set. Consequently, the campaign management process becomes simpler and quicker. Instead of having to allocate the budget manually, CBO does it for you. So, let’s take a look at how to use this option!

How it works

Campaign budget optimization can help you to find the best opportunities with the lowest cost across your audiences, while using your specific budget and bid strategy. 

CBO is a Facebook option that manages your budget and reallocates it between ad sets to get the best results within the campaign. This means that you set only one budget on the campaign level that is automatically distributed between ad sets in real-time. Take a look at the comparison of campaigns with and without the CBO option in Figure 1. 

Difference between campaigns with and without CBO.

Figure 1 – Difference between campaigns with and without CBO.

So, how does Facebook allocate your budget between ad sets? The CBO algorithm may not spend all your budget equally for each ad set. The amount spent directly depends on the performance of the ad set: Facebook spends more on ad sets that perform better and less on underperforming ad sets. 

You can see this in our example (see Figure 2): Facebook spent more on the ad sets that delivered better results. This is the essence of how you can get the overall best results using CBO. 

Example of the budget allocation between ad sets. 

Figure 2 – Example of the budget allocation between ad sets. 

Consequently, when you use campaign budget optimization, it is important to check the results at the campaign level, instead of the results of each ad set.

Setting up campaign budget optimization (CBO)

The main step to receiving the best results when using CBO is a well executed set up process. To help you with this, we have prepared a short check-list for CBO set up:

  1. Check pixel: make sure that conversions tracking works correctly
  2. Create the campaign: 
    • Press the “Create” button 
    • Choose a campaign objective
    • Enter a name for the campaign
    • Turn on the campaign budget optimization toggle 
    • Set up the campaign budget and bid strategy
    • Press the “Next” button

Create the campaign

3. Create your ad sets and ads

4. Run your campaign. 

Note: the amount of the budget you define can be chosen as either a daily budget or a lifetime budget. You can schedule the launching of your ads if you need to. CBO works even if your active ad sets have different start and end times. Also, you can set up the ad set spend limit in accordance with your goals. 

set up the ad set spend limit

 

Best practices for CBO

By testing many different hypotheses, we built a list of best practices for CBO implementation, and we want to share it with you:

  • Segment campaigns by audience type or size. This is the best way to set up separate campaigns with the CBO for broad and narrow audiences. The Facebook algorithm spends more on bigger audiences. So, if you mix ad sets for broad and remarketing audiences, Facebook will spend more on the broad ad set and the remarketing ad set will not get enough reach.   
  • Set up an ad set spend limit.  We recommend setting up an ad set spend limit to help the Facebook algorithm achieve better results. Moreover, when you start testing hypotheses with the CBO option, minimum spend limits will guarantee that all ad sets will reach the audience.
  • Check overlapping. Make sure that you don’t waste the ad set budget for an audience you have already reached in another ad set. For example, if you launch several types of lookalike ad sets in the campaign with CBO, make sure that you have implemented the correct exclusions. Also, make sure that you exclude those who have already made a conversion (see the example below). 

Set up your audience

  • Check the results at the campaign level, not at the ad sets level. Facebook analyzes ad set performance and allocates the budget in real-time. 
  • Don’t make quick decisions. The Facebook algorithm needs 48-72 hours to finish the learning phase. Test your hypothesis with the CBO option at least one week before making any conclusions. The biggest mistake is to turn off the CBO option too soon. 
  • Start with the Lowest cost bid strategy (formerly: Automatic bidding). After you see some performance benchmarks, you can start experimenting with other bid types.
  • Use Automatic Placements. As soon as you start receiving relevant data, you will see where Facebook spends more of your budget and can then optimize accordingly.

 

Case study

We achieved very good results within the campaign using the CBO option. The main idea was to scale our clients’ results by reaching a colder audience. So, we launched the CBO campaign with five different broad ad sets, including lookalike, interests, and others. 

The total campaign budget was 1000 NOK and each ad set had a 100 NOK daily spend limit. For this test, half of the ad set budget was set up manually, and the other half of the budget was set up by the Facebook algorithm. As a result, we significantly scaled the clients’ results with the highest ROAS at the lowest cost. 

 

Summary

The CBO option is recommended if you want to remove the heavy burden of managing the budget for advertisers and requires less manual work. However, sometimes, the automation of certain features on the Facebook platform might not be effective for everyone. When you are first starting with CBO, make sure that you do not use more than 15% of your total budget and try not to jump to conclusions. Maybe, this feature might become mandatory for your business, which can completely change how you create and scale your Facebook ads campaigns.

Now you understand the main points for using the CBO option. Have a go and try the CBO option in your campaign and build your own experience of best practice!