Originally posted on https://mechanised.co.uk/social-media/facebook-campaign-budget-optimisation-cbo/
Campaign budget optimisation, it’s what everyone is talking about at the moment.
If you’re a social media advertiser, Facebook campaigns are usually straightforward to set up and the structure is similar each time. But that’s about the change. From September 2019 Facebook is going to make Campaign Budget Optimisation (CBO) mandatory.
Here’s what you need to know about the new changes to Facebook’s campaign budgets.
How Facebook Campaigns Are Structured
First, let’s go over the basic structure of a Facebook ad campaign.
All Facebook ad campaigns have three main levels
- Campaign level
- Ad set level
- Ad level
The campaign level is your top-level and contains all your ad sets and ads. The whole campaign is focused on reaching your goal.
For example, your campaign can be focused on selling gym trainers.
Ad Set Level
The ad set level contains your creative ads and it’s at this level where you choose which audience to target. In addition to your audience, you can define the delivery schedule and placement of your ads. Pre-CBO, this is where you set your ad budget.
For example, Audience 1 – men aged 18-44 interested in Nike trainers. Audience 2 – women aged 21-34 interested in Adidas trainers.
The Ad level is where all your creatives live that are associated with your chosen audience. Creatives are made up of images, product carousels, video and text.
What is Campaign Budget Optimisation?
Campaign Budget Optimisation or CBO means that campaign optimisation will be made at the campaign level. Instead of setting an individual budget for ad sets and dictating how much you want to spend for each audience, you’ll set your budget at the top campaign level. Users will no longer be able to set the budget, pacing or bid strategy at the ad set level.
Campaigns will automatically in real-time optimise towards the best performing ad sets so all you need to do is tell Facebook how much you want to spend on the whole campaign and Facebook’s algorithm will do all the work.
After the initial learning period, the algorithm will determine where the most opportunity lies for your campaign objective. Based on the best performing ad set and optimising for the lowest cost audiences, most conversions, video views, landing page views etc, Facebook will deliver the most spend to that ad set as it sees fit.
CBO isn’t new, it’s been around since November 2017 but not many advertisers have adopted it. Now that’s is going to become mandatory it’s time to figure out how it’s going to impact your ads and campaign structure.
What Does Campaign Budget Optimisation Look Like?
Here is a comparison of a campaign without CBO and a campaign with CBO.
The current way (old way) of creating a campaign is to set your budget at the ad set level. You can see in the image above that without CBO each ad set is given an equal daily budget of $10 (total budget $30). Each day Facebook will spend $10 per ad set regardless of the results. In this example the three ad sets generated ten conversions in total, each spending $10 per day.
Now let’s compare it to a CBO campaign.
Using the same campaign structure this time the daily budget is set at the campaign level. The total budget is the same $30 ($10×3) however it is spent differently. Instead of each ad set spending $10 regardless of results, Facebook determines which ad set is performing the best and redistributes the budget.
In the example above ad set 2 is the best performing ad set and because of this Facebook diverted $18 of the budget to it. With CBO ad set 2 generated ten conversions compared to five conversions without CBO. The campaign with CBO generated fifteen conversions in total, five more than the campaign without CBO.
The main difference in using CBO is that you don’t have to go through your ad sets manually adjusting budgets. Over time, Facebook will learn and adjust the budgets for you.
In theory, this looks good but how does Facebook decide where to place your budget?
Here’s what Facebook said,
“We optimise your campaign budget in real-time on an opportunity-by-opportunity basis. Our goal is to get you the most results possible, and for the cost of those results to align with your bid strategy.”
Why is Facebook Switching to CBO?
So the question is, why is Facebook making this change?
Last year, Facebook strategists noticed that advertisers were hitting a wall and couldn’t increase profits whilst using their platform. At the same time, they also realised that machine learning could outpace manual inputs from advertisers and improve on their return on investment.
Using CBO should increase you return on investments and save you time by not having to identify the best performing ad sets and manually adjust budgets.
What Are The Benefits of CBO?
There is some data out there that suggests that CBO increases CPM and CPC, but Facebook has recommended that you look at the results of the entire campaign and not just the ad set results. Listed below are some of the benefits that we can gain from using CBO.
Obtain More Value From Campaigns
By distributing more of the budget to the highest performing ad sets, advertisers can maximise the total value of their campaign. Budget optimisation works continuously and in real-time to capture the most results for your budget, effectively lowering your total cost per result.
Spend Less Time Managing Campaigns
As an automated process, campaign budget optimisation eliminates the need to manually shift budgets between ad sets, which can save you a significant amount of time whether you find it necessary to change ad set level budgets one time per campaign or multiple times per day.
Simplified Campaign Management
Fewer budgets to track and reallocate during optimisation. Eliminate the need to re-calculate budget mid-campaign.
If one ad set has a high audience overlap with another, that budget can still be spent in another ad set.
Avoid Restarting The Learning Phase
Campaign budget optimisation does not trigger the learning phase when distributing budget across ad sets, in comparison to manually shifting budgets between ad sets which does restart it.
Efficiently Spend Across Audiences
Campaign budget optimisation can find the lowest cost opportunities across all ad sets and the markets they target.
Setting a Minimum and Maximum Budget For Ad Sets
Not sure that CBO will distribute your budget efficiently? There is an option to set minimum and maximum budgets for ad sets to gain some control back.
It isn’t as good as the “old way” of setting the budget at the ad set level and Facebook can’t guarantee they will spend the minimum and stay under the maximum but it’s some level of control if you don’t want to hand everything over to machine learning.
How to Create a CBO Campaign?
Creating a CBO campaign is similar to creating a regular campaign. The only extra step is that you need to turn on “campaign budget optimisation”.
You can still set a daily or lifetime budget and you have a choice of bidding strategies.
- Lowest cost – Get the most results for your budget
- Cost cap – Control your costs while getting the highest volume of results for your budget
- Bid cap – Control your bid in each auction
- Target cost – Get a consistent cost per result
At this stage you will also decide to run your ads on a schedule, which is enabled here but set at the ad set level, and whether you want standard or accelerated pacing.
You can change your non-CBO campaigns into a CBO campaign by editing the campaign settings. For a campaign to be eligible for this all ad sets in the campaign need to use the same “optimisation for ad delivery”. E.g. landing page views, link clicks, impressions, daily unique reach.
When Will Facebook CBO Become Mandatory?
Beginning in September 2019 Campaign Budget Optimisation will become a fixed default that can’t be turned off. This is a big change to the structure of Facebook campaigns so you need to start adjusting now to avoid any advert downtime in September.
Do You Use Facebook Ads?
CBO is a huge change to the Facebook campaign structure and it might catch a few companies sleeping. Not every company’s Facebook ads structure is the same and some campaigns will have to be restructured to group similar audiences. The best thing to do now is to start testing with CBO if you already haven’t done.
If you need any help with your Facebook advertising drop us an email at [email protected], call 0161 791 0100 or click on the chat box in the corner and we can have a chat about your Facebook campaign.