Advertisers had only one option for setting budgets in Facebook before Campaign Budget Optimization was introduced (e.g. audience). The process of allocating budgets for different audiences could be long, complex, and time-consuming if you were managing multiple campaigns. CBO simplifies campaign management by controlling how much budget each ad set receives. The tool finds the lowest-cost opportunities across your audiences using your budget and bid strategy.
CBO may not be the right solution for everyone. however, I will show you examples of when to use CBO according to your Facebook campaign strategies in this blog.
Campaign Budget Optimization: What is it?
Each target audience will usually have its budget within an ad set within a campaign. On CBO Facebook, however, each campaign has its budget. After that, the Facebook algorithm distributes the budget amongst the target audiences. CBO automates processes you perform daily. It finds the best results based on your budget within the campaign. Budget allocation by CBO takes into account the following factors:
- CBO distributes budgets and bid strategies under your objectives. Spend ad dollars on the ad sets with the lowest CPA or ROAS across all your campaigns. CBO, for instance, will allocate more budget to an ad set that generated a 15.70 ROAS than the one with a 1.70 ROAS.
- The CBO takes into account the size of your audience when allocating budget, as well as where best results can be found. The CBO distributes budgets based on ad sets with the greatest audience. Take the example of having a daily budget of $370. The audience size of Audience A is 100,000, but Audience B is 500,000, and Audience C is 50,000. The algorithm on Facebook will allocate more budget to Audience B since there are more chances to find the best results.
- CBO includes the budget for both active and scheduled ad sets since it considers the campaign budget and not the individual ad sets. CBO will not account for your ad set when reserving the budget if it is not scheduled but turned off.
When You Should Use Campaign Budget Optimization?
CBO enables advertisers to manage their budgets more efficiently on Facebook. A feature like this is impressive if it aligns with your campaign strategy. Here are three reasons why CBO is beneficial.
1. Make Your Campaigns More Effective
Incorporating CBO into your strategy will achieve more conversions, higher ROAS, or lower CPA. Your campaign will be found to be the lowest-cost option based on your objective, budget, and bid strategy by CBO. The performance of your CBO campaign needs to be reported rather than that of your ad sets.
2. Reducing the Need to Restart the Learning Phase
Facebook’s algorithm requires 50 optimization events (e.g., purchase, sign up, view content) based on the conversion window you set in the ad set to move out of the learning phase.
Upon successfully generating 50 events, your ad set will exit the learning phase. Consequently, the algorithm knows which types of users are most likely to click on your ad at a lower cost. Your campaign will be more stable as soon as you exit the learning phase with your ad set.
Because the CBO feature distributes your budget across your active and scheduled ad sets, you’re less likely to have to restart the learning phase on your campaigns since drastic budget changes will adversely affect the data Facebook is collecting.
3. Managing Campaigns in a Streamlined Manner
Since CBO finds and adjusts your budgets for you and finds the lowest-cost opportunities in real-time, you have less to manage when you use CBO instead of manually setting budgets within an ad set. Consequently, building broad audiences and combining similar audiences is the best way to use CBO. The problem of competing with yourself can arise if your audiences are similar, which can lead to inefficient spending and higher CPAs. When you target your audiences separately, you can view the overlap report to see if your audience overlaps.