How to use Facebook Campaign Budget Optimization

Posted on 2023-11-13

Introduction

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You read it here first: Facebook can optimize your ads. Curious about how this smart tool works? We will break down everything you need to know about Facebook 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). Campaign budget optimization does all the work for you if you set up targeting and ad set appropriately.

What is Facebook CBO?

Campaign Budget Optimization is a feature that you can find in Facebook Ads Manager. Facebook CBO helps you accelerate and enhance your Facebook campaigns by automating certain processes.

CBO is based on the AI 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. Consequentially, 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!

Facebook ads hierarchy

Facebook campaign budget optimization is one of the Facebook power initiatives. Facebook collects available data from your account and optimizes every budget-based campaign.

If you are wondering whether to invest in Campaign Budget Optimization, the answer is YES. The advertising goals for most businesses are to maximize their reach, and CBO helps with that.

Since Campaign Budget Optimization is an integral part of Facebook Ads, it's necessary to understand its three levels:

  1. Campaign level.
  2. Ad set level.
  3. Ad level.

Campaign level

At this level, you can assign your campaign budget, campaign objective, and multiple ad sets. In this case, video views, clicks, impressions, and conversions are considered campaign objectives.

Ad set level

At this level, focus on your particular audience, placements, conversion windows, and ad set budgets. This step is essential in case you do not have a mandatory Facebook CBO.

Ad level

This level is the ad creative. Many available options guarantee that your ad delivery can be creative and organic. Try images, carousels, videos, and much more.

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When creating a new campaign, there is no such thing as too many ad sets. You can work out a structure that works for your business needs.

How Facebook CBO works

Campaign budget optimization can help you find the best opportunities with the lowest cost across custom 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.

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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 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.

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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.

The Facebook CBO Learning Phase

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The learning phase is highly important. It gives you vital insights about your audience and ad set level.

To put it simply, the learning phase is the period when the system learns about an ad set. This phase is the most important part of Facebook's campaign budget optimization.

How does the Facebook CBO Learning Phase work?

Facebook will optimize your campaign from the campaign objective as soon as you set up the ad. In simple words, Facebook will start delivering ads to the particular audience that is likely to be interested in your service or product.

How long does the Learning Phase last?

The phase ends when you have generated at least 50 conversion events. But everything can vary depending on your objective. When optimized events marked the number 50, everything will automatically reset and you can make any type of changes to your ad sets.

Note: during the learning phase you may see inconsistent results. Do not rush the process and change the strategy entirely. Try simple tweaks and minor adjustments to understand the core of the problem. Wait until the phase has finished for any drastic changes.

Another point to consider is that Facebook continues gathering data and optimizing ad sets when the learning phase is over. So, as long as your ad sets are running, Facebook keeps optimizing your campaigns. The main point of it is stable results.

When does the learning phase restart?

When you make some tweaks to an ad set, trust us, you will not disrupt the learning phase. Say, if you feel that you need to reconsider something in your overall campaign budget or a particular campaign level budget - the phase will not restart. On the flip side, if you are making too many grand adjustments, the chances are that they can restart the learning phase. These considerable changes are prone to restart the learning phase:

  • Targeting;
  • Ad creative;
  • 7-day or longer ad set pauses;
  • Optimization event changes;
  • New ads in an ad set level.

However, do not feel like the learning phase is restricting you from grand changes. If they can end up being more beneficial to your business, take a leap of faith and make them to your ad sets. Take one big change at a time to make the change more organic. Plus, it's better for performance assessment.

Setting up Campaign Budget Optimization (CBO)

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

1. Check pixel: make sure that conversion 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.
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3. Create your ad sets and ads

4. Run your campaign.

Note: the amount of budget you define can be set 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.

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CBO vs ABO

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Facebook campaign budget optimization manages your campaign budget so that you receive the best results. ABO, Ad Set Budget Optimization, allows you to have full control over ad set budgets. It means you can change the audience in every ad set to see which is performing better.

When should you use CBO vs ABO

CBO

Do you have some extra budget? Do you have more experience with advertising? Have you got more developed ad accounts? Have you collected enough data about your particular audience? The answer is straightforward - choose CBO campaigns.

Facebook CBO campaign is a great choice for business owners. It is the biggest time saver for them. Also, CBO campaigns are great for those who are new to Facebook advertising.

CBO campaigns are filled with creatives, hooks, and audiences.

Note: Meta is currently doing some rebranding. CBO campaign can be referred to as Advantage Campaign Budget.

ABO

Do you trust yourself more when setting up an ad? Algorithms are not for you? Go with ABO.

ABO is for Facebook media buyers, ad specialists, and professionals who need more control over their campaigns. ABO is necessary when working with different audiences and audience sizes over multiple campaigns.

Another case when using ABO is a good idea is a lack of data. Little information on pixels and algorithms and not enough information on what direction to go with your ads and campaigns can be solved by using ABO.

Truth be told, CBO and ABO are not comparable. Choose an option that resonates with your business targets, campaign goals, timeframes, and budget.

Best practices for CBO

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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 audience overlap. 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).
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  • Check the results at the campaign level, not at the ad sets level. Facebook analyzes ad set performance and allocates 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 prior to 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). Transitioning to CBO can take some time until performances stabilize. 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.
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Case study

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

The total campaign ad 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 Facebook's algorithm. As a result, we significantly scaled the clients’ results with the highest ROAS at the lowest cost.

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Is Facebook CBO mandatory?

Facebook campaign budget optimization has been available since September 2019. Back then, Facebook announced that all accounts should switch to Campaign Budget Optimization.

After updates, CBO is no longer mandatory. Regardless, we feel that you definitely need to give Facebook CBO a try if you want to see tremendous results in your campaigns.

Summary

The CBO 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 scaling strategy, 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 imperative for your business, which can completely change how you create and scale your Facebook ads campaigns.

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

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