Are you aware that one of the biggest fundamental changes to Facebook advertising in years is about to happen?
Have you ever heard of campaign budget optimisation (CBO)?
In this article, we’ll go over how to use the new CBO setting to create advertising campaigns for your business.
Facebook Ad Campaign Structure
Before covering exactly what CBO is, let’s first look at the campaign structure of Facebook ads.
Understanding campaign structure is essential to being able to have a firm grasp on not only what campaign budget optimisation actually is, but also the real-life implications of this change on how you as a marketer create and analyse your ad campaigns.
A Facebook ad campaign is comprised of three parts; the top level is the Campaign stage, where you set your objective (the goal of your campaign). Below is the mid-tier, which is the Ad Set level where currently you’re able to set your ad budget, targeting, placements and bidding and optimisation settings.
Finally, at the bottom of the campaign structure, you’ll find the Ad level. Here, you can create your ads, which will be shown to the target audience you set in your Ad Set.
Now you’re up to speed with the structuring of Facebook ad campaigns, let’s move onto what campaign budget optimisation is and how setting budgets is moving from the Ad Set level to the Campaign level.
What is Campaign budget optimisation?
Campaign budget optimisation is a new feature where Facebook optimises the distribution of your campaign’s budget across the ad sets within that campaign.
This allows Facebook to automatically and continuously optimise your ad spend by finding the best active opportunities for results (based on your objective) across your ad sets and distributes your budget in real-time to get those results.
It’s worth noting that campaign budget optimisation is not the same as conversion optimisation. The latter is when you use the Conversion objective and Facebook optimises the ads within your ad set in order to achieve a conversion. The former sets budgets at the Campaign level and then optimises at the Ad Set level to find the most effective ad sets.
In the above example provided by Facebook itself, we’re able to see a visual representation of how this CBO feature works. Without using it, budget is evenly distributed amongst the three ad sets, even to the under-performing ones, thus effectively lowering your potential ROI.
Whereas, with CBO implemented, Facebook will set a larger ad budget percentage to the ad set that is getting the most conversions so it can grow and continue to produce positive results. This leads to a higher number of conversions at a lower cost per conversion, which increases your ROAS.
Why and when is Facebook making this change?
Campaign budget optimisation moves where you set your budget, from the Ad Set level to the Campaign level.
This has a huge knock-on effect on how you create, test and analyse your campaigns. Now, you will set a total daily budget to be distributed and spent across the ad sets within your campaign. Using the Ad Set budget allocation feature, you are able to prevent Facebook from optimising to the extreme if you want to test certain demographics and audiences. Results should now be analysed based on averages from across the campaign and not in the individual ad sets.
This feature was an optional setting, which most advertisers have ignored until now. Recently, Facebook announced that campaign budget optimisation will be rolled out in September 2019 for advertisers with a 100% campaign budget optimisation adoption.
In summary, this means that if all of your campaigns in the 56 days prior to the change have been set up using the feature, you will be unable to turn it off and return to Ad set level budgeting.
In February 2020, the change will then be rolled out and implemented across the advertisers who have not fully adopted campaign budget optimisation yet.
Pro tip: Right now, do not use CBO on all your campaigns, otherwise you will have your account locked into using the feature. Continue experimenting with campaign budget optimisation but keep using ad set budgets until the full release in February 2020, more on why later in the article.
How to create a campaign using campaign budget optimisation
Now, let’s cover how to use this new feature by walking through how to create a campaign. Firstly, navigate to your Facebook Ads Manager and in the main dashboard click on Create. This will open one of the two creation windows.
The creation window that opens will depend on how you’ve previously created campaigns. In this example, we are going to use the Quick Creation workflow, so if you see the Guided Creation workflow open, then switch to Quick Creation.
Within the Quick Creation window, you need to first name your campaign and then select your campaign objective from the drop-down list that appears. In this example, we are using the Conversions objective.
Next, make sure to toggle on the campaign budget optimisation and set your campaign budget. Here you’re able to set a daily or lifetime budget, just like you would when setting a budget at the Ad Set level.
For example, if you want to test three audiences and you would have previously allocated $50 per day to each ad set, your new campaign budget would be the total ad set budget, 3×50 = $150 per day.
Next, complete the rest of the campaign structure by naming your ad set and ad and then click on Save Draft to create the draft campaign in your Ads Manager dashboard.
When the campaign settings open under the campaign budget optimisation section, you’ll now be prompted to select your campaign bid strategy. Again, this was previously at the Ad Set level and Facebook has now moved it to the Campaign level with this new method of creating a campaign.
In this example we are using the Conversion objective so we have the following bid strategies:
- Lowest cost
- Cost cap
- Bid cap
- Target cost
You want to begin using the lowest cost, which is Facebook’s automatic bid strategy. Then, if we are able to scale the campaign and increase our budget, we’ll switch to using the cost cap or bid cap strategy, incorporating more aggressive manual bids.
Now we’ll move on to the Ad Set level by selecting the ad set button on the right side of the screen or clicking on the name of your campaign.
Once you’re at the ad set, move onto the completion of your ad set up in the same way you would when creating any other campaign. The main component being the choice of an audience that will see your ads, such as a Lookalike to target cold audiences, Video Custom audiences to target warm audiences of people who have watched your video content or Website Custom audiences to target hot audiences of people who have previously visited your website.
In this example, we are using the Conversions objective and want to optimise for Leads, whilst testing multiple Lookalike audiences of different sizes. In this first ad set, we’ll start with the 1% built from a Website Custom audience of all purchases (customers).
Next, you want to choose your placement. We are using automatic placements since we have chosen to use the Conversions objective. For a full breakdown of placement options and when best to use each of them, click here.
Finally, make sure to set your optimisation and delivery, selecting what action you are optimising for such as link clicks or landing page views for Traffic campaigns, or in this case, conversions. It’s not necessary to change anything else in this section so we’ll leave everything as default, including the conversion window of 7 days after clicking or 1 day after viewing.
Pro tip: You can set spend limits per ad set which will allow you to retain control over the distribution of your campaign budget among the ad sets within your campaign. You’ll find this option in the budget and schedule section of the ad set.
You are able to set a minimum spend on the ad set as well as maximum spend. One of the reasons you would use this feature is when you want to spread the reach in each of your ad sets more evenly if you are testing audience effectiveness and don’t want Facebook to optimise too quickly and exclude ad sets that still have potential.
You’d set a minimum spend per ad set, for example if your campaign budget was $150 and you were testing three audiences you could set a minimum spend of $30 per ad set and then the rest would be apportioned for optimising to the best performers.
Finally, navigate to the Ad level of your campaign and create your ad. Here you’ll set your ad format, creative, copy, link, headline and call to action. The ad you create will depend on your chosen niche, audience demographic and the product or service you’re selling.
In this example, we are targeting Cold Lookalike audiences in what is known as a Cold Lead Test campaign. The end objective is to initiate a response from the hyper-responsive people in your audiences who are ready to buy. Therefore, we want to position a service-based ad in this example.
Duplicating your ad is a simple way by which you can create another ad with the same copy or creative, allowing you to alter various variables before setting it live.
How many ad variations you create will depend on your campaign budget and the number of ad sets you have running. The higher the campaign budget, the more ad sets and ad variations you can test.
Counter to this, if you have a low campaign budget with too many ad sets, this will result in the optimisation process taking much longer, as Facebook has more campaign elements to which it needs to distribute budget.
Now that you have created your first ad set using the CBO feature, you can now move onto the duplication of the ad set, allowing you to create the other ad sets you want to test.
To do this, navigate back to the Ad Set level of the campaign and with the ad set selected, click on the duplicate button.
When the new ad set appears, make all the relevant change to your audience demographics, in this example we are changing our Lookalike to a larger size, from the 1% to 3%.
Keep the rest of your ad set the same, as you don’t want to change more than one variable at a time when your testing otherwise your results will be inaccurate.
Move on to the Ad level and use the post ID method outlined below to select the ads from the first ad set you created. This is a great hack, as by doing this you will retain all the social proof and your engagement rate, whether that’s likes, comments, shares and video views.
When at the Ad level, select one of your ads and click Edit. In the edit window select “Use existing post”. Then click on Select Post, this will open the Post matrix.
Click on Filter by and then select “Ads Posts”. This will show you the latest ads that you have created, along with their post ID, date created and social engagements.
Find the matching ad that you originally created in the first ad set and select it. It will appear at the bottom of the ad matrix, then click Continue.
Once you have done this, repeat this process for the other ads that you may have in your ad set.
Pro tip: If you are creating more than two ad sets, as we are in this example, it’s a good idea to repeat the ad set duplication stage outlined earlier with one noticeable difference: instead of duplicating the original ad set, duplicate the second ad set you created, as you’ve already implemented the post ID method so don’t have to make any ad changes. Remember, you’ll still need to make the relevant audience change in your new ad set. Finally, once your campaign is created then you can publish all the changes.
To recap, in this example, the campaign structure would be:
Best practices for using campaign budget optimisation
#1 Facebook states that you shouldn’t analyse your results at the ad set level, and instead measure the effectiveness based on the total number of results your campaign netted combined with considering the average cost per optimisation event at the campaign level.
This is a big change, as previously you’d measure audience effectiveness at the ad set level. Although Facebook suggests reviewing data only at the campaign level, we’ve found that you can lower your CPA through the following methods: if you have one ad set in particular that has a significantly higher cost when measuring your ROAS, you can actually turn this singular ad set off and let Facebook use the budget this ad set was taking to further optimise the other ad sets that are performing better.
#2 It’s essential that you are patient and wait at least a week or even longer if you have a smaller budget. Facebook uses machine learning to optimise your campaign results and this will take time. Ensure you give at least a week before making any changes so that your results have a chance to stabilise and move beyond the Learning Phase.
Dennis Yu gave a great analogy for what happens when you make changes too often with your Facebook ads and why you wait longer for the algorithm to figure it out.
“Constantly making changes…is the equivalent of planting a seed, digging it up after 5 minutes to see how much it’s grown, replanting it, and then digging it up again 5 minutes later.”
Facebook campaign budget optimisation (CBO) is going to be the default and only option to create campaigns on Facebook.
This is a big change that will disrupt all advertisers so now is the time to get ahead and test this feature before the full change is implemented.
What do you think?
What’s your experience of using CBO?
Let me know in the comments below!
About Charlie Lawrance
Charlie is an advertising strategist, writer, speaker, and agency owner. He’s the Founder and CEO of Gecko Squared, a Facebook and Instagram advertising agency that specialises in working with high growth clients from around the world including eCommerce, software and professional service businesses. He’s been planning and buying digital media for over 9 years since he started his first business aged just 18. Stay in touch by liking his Facebook Page (Charlie Lawrance).