Facebook’s Drive For Better Campaign Budget Optimization — Here’s What’s Changing

Facebook wants advertisers to makes as much ROI and ROAS as possible. Good results helps Facebook attract more advertisers — and make more money.

That’s why there’s a new feature with the latest Facebook update — Campaign Budget Optimization (CBO). This helps you automatically redistribute your budget to the best performing audience. It’s always been an optional feature. But things are changing.

So this post’s job is to help you prepare for these changes. And also how Leadza will adapt to these changes — to help you optimize your Facebook campaigns even more.

How CBO will Impact Your Facebook Campaign Structure and Ads Budget

As Campaign Budget Optimization is currently entirely optional, many advertisers have ignored the option. But Facebook has now made it compulsory for selected accounts starting in September — so CBO’s in the spotlight now.

Tip. What’s the difference between Conversion Optimization and Campaign Budget Optimization? Budget optimization which audience to allocate the most budget to, rather than who to display the ad to within each audience.

By making CBO compulsory in the latest update, Facebook hopes to improve ad performance for advertisers. They want their algorithm to manage your adset budget entirely.

Facebook campaigns consist mostly of 3 elements. Namely campaign, ad set, ad. With CBO the budget is set up on the Campaign level, not the ad set level as before. Here’s a visualization of this change.

With Campaign Budget Optimization enabled, Facebook takes your budget and redistributes it to the better performing ad sets automatically.

In addition to helping you manage your budget automatically, Facebook also boasts several other benefits of this feature. Here’s the good news:

Tip. How do you know if Campaign Budget Optimization is mandatory for your account? If you’re an admin on an ad account that will have this feature set automatically, you should have received a notice in your inbox. A notification has also been appearing at the top of accounts in Ads Manager for affected accounts:

So far we don’t know how many accounts will have a compulsory migration to Campaign Budget Optimization come September.

How to analyze and optimize your results with CBO

• Give it time

Each adset needs a minimum of 50 conversions for stable delivery. There can also be day to day random variation in results such as on weekends vs weekdays. The advertisers that we’ve spoken to that are seeing the best results with CBO give it 4–7 days minimum before scaling.

Waiting may not feel productive, but in this case it’s the best strategy.

• Split Your Campaigns By Funnel Stages

With CBO, it’s best to split your ads up according to funnel stage in the Facebook API. Namely Top, middle and bottom of funnel. For example, you would want to allocate a small but highly valuable warm audience proportionately more budget than a cold audience that haven’t interacted with you before.

• Set minimum and maximum daily budgets for each ad set

The same as above applies. Make sure to set smaller budgets for cold, top of funnel audiences. And feel free to increase budgets for warm bottom of funnel audiences. This is key to effectively managing your Facebook ad spend.

The “budget & schedule” section of an adset allows you to set these:

Click on the spend limits section to control the budgets:

Setting these budgets are very important. Campaign Budget Optimization can be extreme with how it allocates budgets at times — especially on a new campaign with little data.

For example, if you have 10 ad sets, CBO could give 70% of the budget to one of these — leaving the others with no budget and making it hard to establish their true effectiveness.

So set your budgets accordingly to ensure proper testing and allocation.

How to evaluate the results

In their guide to using Campaign Budget Optimization, Facebook is keen to stress that you should look at the overall results of the campaign, and not focus on individual adset results. This is due to something called the “breakdown effect.” Facebook has a full explanation here.

In a nutshell, any given audience or placement can produce only so many conversions at a given price. As the audience gets saturated, price will increase. So it’s a good strategy to increase the overall capacity of the campaign by allocating budget to cheaper audiences.

This is similar to how Leadza’s Predictive Budget allocation works — so it’s a big challenge for us to adapt to new Facebook Changes.

Let’s prepare for the changeover in September together

If your account has been selected to convert to CBO in September, it’s time to prepare. And we’ll be right here to help and guide you through the process.

When CBO takes effect, all your campaigns will switch over — old and new.

We recommend taking the following steps now in order to prepare yourself for this big change.

• Test CBO On Your Account As Soon As Possible

It doesn’t matter whether your adset is new or old. You can test CBO with either, and match results to previously run campaigns that are similar.

For current campaigns, each adset must have the same objective, for example, you can’t have one adset optimized for engagement and another for conversions.

• Analyze the results using our advice above

If your campaigns that are on CBO are underperforming, try to work out why. You’ll need to adjust your setup now to make sure you don’t suffer a hit to revenue in September. And it’s scary close to that all-important Q4 holiday. So the time to test is now.

Ad prices can also be high in Q4 — which makes for expensive tests. Test now, while the pricing is lower and there’s less urgency.

Predictive Budget Allocation Update -> Budget Management

Us at Leadza are also facing a huge challenge to adapt to CBO. Of all the features we offer, Predictive Budget Allocation is going to be hit the hardest.

That said, we’re working around the clock to give you a smooth transition into CBO — and to keep your ad performance running high throughout the transition.

Let’s get a little deeper into how the new Budget Management feature will work for you.

Firstly, we’ll be launching this feature in June. And right now Predictive Budget Allocation still works with ad set budgets — so you can still benefit from this if you aren’t switched to CBO yet.

To make sure you have a solid understanding of what’s to come, let’s take a look at what we have now.

How does Predictive Budget Allocation works

Leadza predicts to what level you can increase your budget to keep an ad set performing well. It also suggests which ad set budgets should be decreased due to low performance — to save you money.

If your budget isn’t allocated optimally, Leadza sends you a suggestion on how to set it up for better performance. The best ad sets — with the lowest CPA (cost per action) will get the most budget. But if an ad set has a low amount of conversions and impressions, it can also get more budget — since it has to be tested a little more before it’s effectiveness can be judged.

This helps to lower your overall CPA and get your ad sets running smoothly (and making ROI!).

What will change.

Leadza won’t be working out budgets on the ad set level anymore. Instead, we’ll be helping you:

• Allocate Budget between Campaigns (On Account level only) and optimize your whole sales funnel
• Steadily increase your campaign budgets where there’s room for effective scaling.

By effective scaling, we mean your campaign has good delivery rates -so the system can increase the budget for it to scale.

But that’s only the high level of how Budget Management will work. So let’s dive a little deeper again.

You can currently set your own conditions for budget allocation. So you get to set up according to your specific marketing goals. Here’s what that looks like:

Level Setting

While you can still decide on which level you want your marketing to be set, this feature is falling away. CBO makes this feature pointless, simply.

So from now on this feature will be on the campaign — or account — level, which will work on optimizing your funnel as a whole.

Optimization Goal

You can change your Optimization goal from Conversions (for example) to any other event (even ROAS) depending on your final marketing goal. This setting will remain the same with Budget Management, allowing you to focus on your most important marketing goals. However, choosing the same Optimization goal for different campaigns should follow youк sales funnel logic. For example your campaigns can be grouped by type:

• Cold campaigns
• Remarketing campaign
• Post Engagement campaigns

By choosing all cold campaigns you will be able to group them together and allocate budget between them based on the Key Metric. Let’s say you have Campaign 1 (Traffic), Campaign 2 (Conversions, all ad sets are optimized on Add To Cards), Campaign 3 (Conversions, all ad sets are optimized on Purchases). You can choose Purchases as your Key Metric and Allocate budget between Campaigns based on that.

Analyze And Manage ad sets

If you have outdated ad sets in your campaigns, you can simply ask the system to analyze active sets only. You’ll have this same option with Budget Management. Which means you can still filter the results you want, namely:

• All ad sets (turned off as well)
• Only Active Ad sets

Increase daily budget

By adjusting the percent range for which Leadza can increase your daily budget you can control how fast you scale. 20% is the maximum allowed by the system — Just to ensure keep getting positive results and don’t scale too fast (and end up losing money).

Budget Management will have this same setting.

Allocate Budget

If you have specific spend targets for each ad sets, and don’t want any flexibility between them, you’ve got options. Simply choose “No” on the allocation setting. This way you’ll only allow the system to increase budgets on good performing ad sets. Other ad set budgets will remain the same.

With the new Budget Management, the same logic applies on Campaign level. If you want the system to scale without allocating budgets between campaigns, simply choose “No”.

Times Change

Times may change. And we may change with them. But in the end we remain the same, helpful company you’ve always known.

So what do you need to do now?

Whatever you want.

You’re all set now.

Setting a budget for your ad campaign’s audience has never been easy, but now it doesn’t have to be difficult, either. With Facebook’s Campaign Budget Optimization feature and our handy tips, you can start to automate more of your work — leaving you with even more time to do the things you love.