Spend Money with Facebook Ads | Campaign Budget Optimization

campaign budget optimization, facebook ads

Campaign Budget Optimization, or CBO for short, All Facebook advertisers across the globe should be testing CBO to determine performance variance for their ad accounts.

So, by the time you're reading this article, Facebook would've removed the ability to manage your ad budget and the algorithm should now be controlling your budget.

So in this article, I'm going to tell you three things firstly

  • What exactly this change is?
  • How to react to Effectively?
  • How to Optimise ads for a change?

Facebook CBO

This is the big change that I'm talking to campaign budget optimization I'll talk to what exactly it is but for those who spend money with Facebook or are planning to spend money with Facebook this is a very timely article for you and I have spoken about Facebook CBO in my past article Campaign Budget Optimization I have touched on it.

I'll give you my strategic recommendations on what you should do based on this new setup. so you want to stay to the end of this article because I'll give you my tips and suggestions at the end of this article

What exactly is CBO

For those who don't know the best way to describe it is this looking at this specific graph here

CBO of facebook ads, ads graph

Previously on Facebook essentially the budget was managed on an ad set level (3 boxes on image) but now Facebook is changing that to a campaign level budget (single box on image)

What exactly does that mean basically means that you're not needing to manage so many different budgets on different ad sets but rather you're just managing a single campaign budget and what Facebook will do is allocate automatically the budget across ad sets instead and then it'll trickle down to the different placements that you have within the ad set so that's what will happen with the ad placements here.

Whether you're on Facebook feeds Instagram stories or whatever it might be or trickle down to the actual ad placement itself

Campaign Budget Optimization and Automatic Placements Work Better Together

Now in the past I have sided with manual placements particularly newsfeed placements but nowadays from what I've heard and seen this is coming from Facebook as well by the way automatic placements are the way to go because campaign at the campaign level budgets are being optimized so trickle all the way down and automatic placements will hope sort of go hand in hand with automatic budget optimization from the campaign level.

What Exactly CBO Is

Budget optimization will consider the audience to allocate the most budget to rather than who to display the ad to within each audience. like I said previously when it was managed on an ad set level it would display the ad to within each audience whereas a campaign budget will optimize against and consider the audience to allocate the most budget to. so hopefully that makes a little bit more sense.

The fact that it's compulsory from September this option has been available for advertisers particularly marketing agencies that I've worked with because they have a higher budget span and they're trialing new elements like CBO so it's been around for a while but it's going to be compulsory for the majority of us including basically all advertisers from September 2019

So that's huge and it's more reason to understand CBO inside out and start manually playing around with CBO as soon as possible before they migrate it over in September and you're forced onto it and particularly for those who already run ads at the moment it's going to be very dire if you're not across CBO and suddenly there's such a big shock to your current ads which may be performing well as it is.

What's the biggest takeaway from this so far?

The biggest takeaway is that Facebook algorithm remains King Facebook constantly changes their ads manager in terms of user interface but also algorithm in general so the algorithm here is essentially managing the budget for you and has far more control over the budget than ever how does it impact us

The first thing is bidding and manual bidding has changed your campaign level so that's a large change because previously I was able to manual bid and adjust.

manual bidding has changed, campaign level

What Facebook is trying to do is it's trying to automate everything and make things simpler in a way but at the same time for me personally I found success through managing budgets and bidding on an ad set level so this is the biggest one of the biggest changes bidding and manual bidding has changed to a campaign level where it's more top-line more overarching than very very granular.

Facebook claims this
facebook claims, managing budget

What they're claiming when it comes to CEO and how it will help advertisers, you know Facebook's ultimate goal is to make profit so looking at each of their claims they believe that CBO will obtain more value from campaigns. and now I'm a bit skeptical about this.

Facebook also claims that it will spend less time managing campaigns or you should spend less time managed from campaigns.

Simplified campaign management that could be disputed deduplicated audiences so if one adds that has a high audience over that with another than that budget will be spent in another ad set that from what I've seen is actually true and is actually useful I've void resigned the learning phase this is actually a very useful one

Campaign budget optimization 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 so in the past.

Facebook has claimed that shifting budgets around to vigorously will restart the algorithm and the learning phase where is now managing budget from a campaign level because there's not going to be huge changes and shifts across so many different ad sets and it's just a campaign level that will avoid reciting the learning phase

However, the as the risk is you still need to be very careful with the amount of money that you shift around on a campaign level because you want to avoid the learning phase

The last point is efficiently to spend across audience again this is disputable and I will explain why so this is one of the videos that I posted about a month ago

efficiently to spend across audience, facebook ads

It was a guide to Facebook CBO ad scale in bidding 2020 essentially what I did was I ran a Facebook ad challenge if you haven't already watched that make sure that you watch it because it's filled with details and information knowledge but the aim the aim of the challenge was to scale to five digits and sales within a single month and I used CBO against manual bidding and here's what I found with the CBO line here which is the highlighted line you can see the CPC and the overall row s and on top of that the click-through rate these are all very important metrics now there's a big difference between these two - ad sets that I was running.

You can see here CBO the cost per click was 74 cents I should also add that the product was exactly the same the landing page was exactly the same it was simply a split test and I was just basically testing against CBO and manual bidding strategies and there's a big difference in CPC as you can see over the image and there's there was a 16 cent cost per click CPC compared to a 74 cents CPC that is a drastic increase and click-through rate as well was drastically lower using 0.86% compared to 2 points 17 percent.

Finally is the overall raw ass was actually higher when I manual manually adjusted bids so if you go back to this side slide you know the claims from phase or a bits you've got to take it with a grain of salt so obtain more value from campaigns what I didn't see that personally spend less time managing campaigns

But I got less of a return by doing so and efficiently spending across audiences again a bit questionable consuming these results here that I've been seeing in it on top of that it hasn't just been me but it's also been other people in the industry they're seeing similar things with CBF versus manual bid adjustments

So you know at this point you guys are probably thinking all right like this

this is fine funny, facebook ads

Is probably you guys you're sitting in your room thinking ah shit well everything's gonna fourth pieces but what can I do well this is the part of the article that I want you to read carefully - here's my strategic recommendation from you

Here are a few points that I suggest based off the testing that I've done based on the money that is poured into Facebook Ads here is the top-line recommendations that I have for you moving on to the first point is

Literally force Facebook to fairly test all your ad sets

I get into it this is what I mean with Facebook like I said with CBO the point is that it will automatically test everything for you it will make a very quick decision as to which ad set is good or not you're basically giving a lot of power over to Facebook which they already have they have a lot of power as it is.

So what we want to do is force Facebook to fairly test your ad sets now how you're going to do that is going on to the ad set level

Once you've ticked on switched on CBO go on to the ad set level and click more options right here underneath budget and schedule and then you'll be opened up to ad set spending limits now ad set spending limits is very important you want to ensure that each ad set is properly spending a certain limit because sometimes the algorithm acts too fast and makes a very irrational decision as to which ad set is winning as whereas if you believe that a and that has potential then I highly recommend opening up this option setting an ad set spending limits and adjusting it so there's a very small sort of bubble is that Facebook will allow the ad to spend

Test Audiences, Not Ads

Now you might be asking how exactly do I know how much to set in terms of spending limits well that is a good question this is a whole little chapter in itself but basically you moving from an ad set level budget where Facebook was testing the ads and serving different answer people now Facebook is not only testing ads but also testing audiences so we need to keep in mind and focus on audiences rather than ads at the moment. Therefore you need to keep these own inches audiences large enough so Facebook has enough leeway to play around with the audiences and find the right audience.

Audience-first approach

Look like audiences and custom audiences are more important than ever. Our audiences that have a high conversion rate so you want Facebook to play around with these audiences rather than simply just interest targeting audiences .

This is where you're going to get a higher return investment and this is where you should spend your money in the long term

Start with a Higher Budget

Your bet essentially pushing all assets into a singular budget level. you need to start with higher budgets you're probably asking how much do I start off with my recommendation is at the minimum and again from what I've seen this depends on a whole multitude of factors but at a minimum you want to be starting with $100 at this point you want to start with three figures

Optimized for True Business Outcomes

You want to be spending your hard-earned cash on conversion events only there's a specific way to do this

or watch my facebook zero to 10k challenge if you haven't already because I speak to this nowadays in my opinion from what I've seen engagement ads are just not that useful or any more so optimized towards conversion events don't waste your money.

The CBO change in September for Ads Manager is yet one more example of it happening again. If you’re still doing Facebook advertising like you were a year ago, you’re losing money and missing out on better ROAS.

To get more personalized information, and to learn what you might want to test in the remaining weeks before your campaigns get switched over, contact your Hire Digital Expert representative today.

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Madhuranjan Kumar

Madhuranjan Kumar
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