CBO, or campaign budget optimization, is quickly overtaking the digital advertising world. This feature isn’t new, as we’ve had access to it since 2017. But, with Facebook recently making CBO mandatory for certain advertisers, its important that you know everything about it so you can be prepared when it comes to an ad manager near you!
You came here to learn about Facebook’s CBO feature, and how the new campaign budget optimization is going to affect you. Don’t worry, I’ll divulge that info soon enough. But, for our newcomers, we need to quickly cover how facebook campaigns are structured, so you can understand the implications of this huge update.
How Facebook campaigns are structured
Facebook campaigns have three levels – the campaign, the adset, and the ad. There can be multiple ad sets and multiple ads, but there is only one campaign.
The campaign is the broadest element of your advertising efforts. It represents ad sets and ads. You can have a campaign for Black Friday, for example, and a separate one for Cyber monday. Your campaign determines the overall goal of the adsets and ads – whether it be sales, leads, etc.
Directly underneath the campaign in the Facebook advertising hierarchy is the Ad set. The adset is where you would normally set your budget. This is where you set your audiences, and you would have different targeting among your adsets. Your adsets contain the final layer of FB ads – the ad itself
The ad is what your audience actually sees. Your ads will share the same targeting, bidding, and scheduling, but different creatives and copy.
Now that you know what a Facebook campaign looks like, we can actually talk about CBO.
What is CBO
Facebook is an optimization machine. It has the ability to show your ads to the best possible audience, and in most cases it makes sense to trust this money printing machine with the optimization of your campaigns.
But, CBO takes this a step further. Now, they will be optimization your budget at the campaign level, instead of the ad level you were previously used to.
This means that when using Facebook’s CBO feature, you set the budget at the campaign level, and Facebook will allocate your budget to the best possible ads.
Here is the definition from Facebook on their new campaign budget optimization feature:
“Campaign budget optimization is a way of optimizing the distribution of a campaign budget across your campaign’s ad sets. This means Facebook automatically and continuously finds the best available opportunities for results across your ad sets and distributes your campaign budget in real time to get those results”
How Facebook’s CBO feature works
Let’s look at a practical example of what used to happen vs what happens with CBO:
You used to have a campaign with 3 ad sets, with 5 ads. You set the budget on the adsets at $20 each, for a total campaign budget of $60. The $20/adset would be split among the 5 ads.
Now, you still have the same 3 ad sets with a campaign budget of $60. But, you don’t get to determine how that $60 is split among your adsets. One adset may eat up $35, while one gets $15, and the other gets $10. In theory, Facebook puts the money towards the adset that will deliver the best results. This sounds great, but a lot of you are freaking out over a loss of control. Is this frustration justified? Sure, but it isn’t necessary. We already know facebook is an optimization machine, why wouldn’t you trust it with your campaign budget optimization?
Why I like CBO, and you should too
If you haven’t started already, you need to experiment with CBO. It will become mandatory across all ad accounts eventually, and you can get ahead of the curve by creating some campaigns with it. And, it will likely deliver better consistency and potential for scale.
When using CBO, you’re trusting Facebook to allocate your budget to the adsets and ads with the highest probability of converting. You want conversions, right? And, Facebook is constantly monitoring conversions and performance.
This means that if an ad starts to drop off, budget will be allocated to a higher performing ad. In my experience with CBO, I’ve had less poor days, and my results have been far more consistent. Because of this, I’ve seen a much higher potential for scaling campaigns. Now, to be clear CBOs are not perfect. I’ll get into that later and talk about some of the issues when it comes to consistency.
Using CBO to scale is way easier than the traditional adset budget method. You are able to increase your budget faster, and experience far less volatility. When scaling a campaign, there is no room for volatility! At this point, the idea of going back to the old way of scaling ads is unfathomable. Simply put, CBO’s perform better.
In fact, I even use CBO’s in retargeting and prospection. There are a few things you need to know about using CBO the first time:
Getting the most out of CBO
Just like any aspect of FB advertising, there are nuances that will make or break your success. You can’t just set and forget your ads, and do the bare minimum hoping for high ROAS.
Give Facebook time to optimize
Just like Facebook ads in general, you need to give CBO time. Set everything up and let it run for at least a few days before thinking about killing or scaling. You need a certain number of conversions before the optimization stables. Going into your ads manager and tweaking things every few hours will reset the optimization process. Don’t mess with anything for a while.
In the short term a campaign using CBO can be very volatile. But in my experience once the dust settles CBO works it’s self out. However, there are sometimes where you’ll need to jump in and turn off an ad set or ad that’s getting way too much of the spend with terrible performance. It will be pretty obvious when this occurs.
Set minimum and maximum budgets for each adset
The biggest argument against automatic campaign budget optimization is a loss of control. I think this is silly because we trust Facebook to optimize the delivery of our ads, why wouldn’t we trust it with our budget too? Anyway, you can regain some of your control by setting minimums and maximums at the adset level.
Struggling with CBO, or any other aspect of Facebook ads?
Don’t get me wrong, there is going to be a learning curve with CBO. You might lose some money, and you might experience frustration. But, this is a better way of running campaigns.
And, you can cut out a lot of the expensive lessons with my course, which goes in depth on getting the most value out of Facebook’s CBO feature. If you don’t know how to get started with Facebook ads, or you’re tired of funneling money into losing campaigns, you can learn from my costly mistakes with the Facebook Ads Crash Course.