How will CBO Impact your Facebook Advertising In 2020?

By September 2020 Facebook will impose “Campaign Budget Optimization” on all ads run on its platform. But what is it? And how can we use it to get the best results for our Facebook advertising?

In this article, we will answer these questions so that you can go into 2020 with confidence in your Facebook advertising strategy.
With around 2.41 billion monthly users, it is no wonder so many marketers see Facebook as a vital tool for reaching their audience. The problem is that Facebook’s advertising policy changes so often. This can make it tricky to keep up.

But what is Campaign Budget Optimization?

Campaign Budget Optimisation is Facebook’s automated advertising budgeting tool.
When you promote an advert on Facebook, it uses artificial intelligence to manage how your ad is run on your behalf. This means that it requires little human input.
Until recently, using CBO was a choice. Marketers could opt into it However, from September 2019 Facebook has been gradually removing this option. By September 2020 the shift towards compulsory CBO should be complete.
While it was designed to help users achieve results for the lowest cost possible, it has also disrupted many marketers’ strategy.
It’s a drastic change which has the potential to make or break your Facebook advertising success. Therefore, it is crucial that we get to know how it works.

How is it different?

In order for us to understand how CBO is different, we need to familiarise ourselves with how Facebook advertising works more generally.
Facebook ad campaigns are split into three levels: Campaign, Ad Set and Ad.
The Campaign level is where you set your advertising objective. That is what you want to achieve from your ad.
Facebook splits objectives at the Campaign level into 11 separate categories.
Image taken from Filed to illustrate the different advertising objectives.

For example, if you want to focus your advertising efforts on driving traffic to your website, you would select the ‘Traffic’ objective.
The Ad Set level is where you set main features for your ad. This includes the budget and target audience.
You’ll experience the most change at this level if you’re already used to Facebook advertising. In the past, you set your budget at this level. However, after CBO is fully launched, budget will be set at the campaign level instead.
Finally, you input text, imagery and link at the Ad level. Think of it as your public face. It is where you create the finished ad which your audience sees.
Campaign Budget Optimization is mainly about how your money is spent at the Campaign level.

So how does CBO affect you?

Let’s imagine you are running a Facebook advertising campaign for your new e-book.
At the start of your campaign, you decide that you want to get customers to visit your Amazon UK and Amazon US page.
With this intention you organise two ad sets- one for Amazon UK and one for Amazon US. You put both ad sets in the same campaign. Then you assign a budget to each ad set.
You aim to attract more customers from the US Amazon market because it is larger than the UK market. So, you set a £70 a day budget for your US ad set, and only £30 a day for the UK. In the days before Facebook’s push towards CBO, this was easy.
However, because of CBO is now compulsory, you can’t set a specific budget to individual ad sets. Instead you have to set your budget at the campaign level. Then CBO manages your budget for you.
In our example you may set £100 a day budget. Once that budget is fixed, however, Facebook’s CBO will spend it among your ad sets based on their performance.

If your UK ad set does better than your US one, Facebook will divert money to the UK ads. You might find that Facebook ends up spending most of your budget on the UK set. This isn’t what you planned at the start of your campaign.
Marketing on Facebook post-CBO means surrendering control over how your advertising is run.

What are the risks of CBO?

Let’s first talk about the negative sides of Campaign budget optimization.
Some more experienced Facebook marketers have complained that CBO takes too much control of their advertising campaigns. This can be frustrating.
For instance, Facebook’s CBO can misspend your money in chasing what it considers to be your objective.
Let’s imagine that you want to gain conversions. You set your marketing objective as “Conversions” at the Campaign level. As a result, CBO runs your campaign with the goal of converting as many people as possible.
It posts when it thinks will be most effective to who it thinks will be most responsive to your ads. It spends your budget as it sees fit. In short, it does everything it can to achieve your goal.
This will win conversions. However, it can hinder any secondary objectives you might have.
Compared to the previous Facebook ad management, CBO can be blinkered and inflexible in its pursuit of your bottom-line.

How does CBO affect your ad frequency?

Another aspect to consider with CBO is how it affects your ad frequency. ‘Ad frequency’ refers to how many times your audience have seen your advertisement.
We wrote an article about how to manage your Facebook adfrequency, but using CBO adds another dimension to be considered.
Low ad frequency keeps your advertisement from becoming stale, or worse yet, irritating to your audience. Generally, the more times your audience sees your advertisement, the more likely they are to disengage with it. It becomes commonplace and boring.
In fact, we’ve found that an ad frequency as low as 2.0 (meaning that your audience have seen your ad 2 times) can negatively affect your ad’s reception.

The danger with CBO is that it’s harder to limit how many times your audience sees your advertisement. For example, if Facebook thinks it can get better results by showing your ad to a smaller audience, it will dump more money into a smaller ad set. This can make your ad frequency skyrocket.

Let’s look at an example

To illustrate this, picture two ad sets within the same Facebook campaign. One ad set has an audience of 500 people. These people have all visited your product page. The other ad set has an audience of 50,000. These people haven’t yet.
With CBO running, you might find that the majority of your budget is spent on those 500 people as they are more likely to buy your product. However, while it may gain more conversions, it also risks flooding this tiny audience with your ad.
This will drastically increase your ad frequency, potentially turning off members of that audience. They’ll lose interest.
It also neglects a larger audience that might be converted in the future with more exposure to your advertising. These risks can occur if you don’t set some limits on CBO.

How to take back control

If you don’t fancy giving up control of your ad campaigns to Facebook, there are a few tactics you can use to regain some control.
However, we should mention that there are benefits to using CBO which we will discuss later.
If you still want to control spending on your ad sets, you can take advantage of Facebook’s “spending limit” feature. As a backstop to the type of budgeting issues we discussed above, Facebook has built a tool for setting spending limits into its CBO.
Facebook claims that CBO works best when it is given free reign over your budget. For this reason, they recommend allowing CBO complete control.
“In general, we don’t recommend using spend limits since they decrease the flexibility we have to optimize your campaign budget.”

“However, they may be useful if:

• You have specific budget requirements for an ad set.
• You’re using the lowest cost campaign bid strategy without a bid cap and don’t know how much you value reaching a given audience.”

Spending caps can be easily set. You can set an upper and lower cap on spending. This means that you can keep ad set spending within a reasonable budget for you.
Note that CBO will still spend your money as it sees fit within the parameters that you set. For instance, if you set an upper limit of £150 and a lower limit of £50 per day, CBO will experiment within this £100 range. So do expect some spending fluctuations.

How can we benefit from CBO?

We’ve explored the negative side of CBO, but Facebook promises some benefit to marketers who embrace it.

More free time

You don’t need to constantly manage your ads with CBO. This promises to free up some of your valuable time so you can focus on other aspects of your marketing strategy.
 

It constantly manages your advertising 

Obviously, CBO shouldn’t be treated as an infallible source of knowledge. However, there are areas where CBO can discover insights that even the brightest marketing minds simply can’t.
One of the greatest advantages that Campaign Budget Optimization has its ability to process thousands of calculations a second. Facebook advertising is dynamic. Changes happen all the time within this cyber marketplace.

Facebook can notice minute behavioural changes among its users and respond in a way that works towards your marketing objectives.
Moreover, CBO doesn’t need rest. This means that Facebook can keep a watchful eye on your advertising campaign while you sleep. This is particularly useful for marketers who are targeting audiences outside of their immediate time zone.

It makes Facebook advertising simpler

Whether you view this as having a positive or negative impact will depend on your experience with Facebook advertising.
For smaller businesses and newcomers to Facebook advertising, the change presents an exciting opportunity to get around Facebook’s intimidating skill threshold. In the past, people who were attracted to Facebook advertising but put-off by its complexity simply wouldn’t use it. But now, thanks to how much Facebook has simplified advertising with CBO, more people are able to get involved.
Of course, this is also a massive benefit to Facebook itself. It makes sense for them to encourage more users to get involved with their advertising platform.
Marketers who are more familiar with the intricacies of Facebook’s old system might interpret this negatively. It arguably devalues the competitive edge that their expertise gives them on this platform. Not to mention the fact that more advertisers on Facebook means more competition.
 

Top tips for using CBO

Keep ad sets per campaign few

The more ad sets you create in a single campaign, the less control you have over how CBO spends your money. You’ll have more ad sets competing for your budget.
Instead try focusing your attention on ad campaigns with 2-3 ad sets. Doing so will result in clearer results for how your ads do with your target audiences. It also
makes split-testing easier.

Feed enough data in Campaign Budget Optimization

CBO learns from interaction between your audience and your advertisement. It then uses what it learns to optimise how your ad campaign is run. 50 interactions a week is a solid data set for CBO to base its learning on.
What those interactions are depends on what you’re trying to achieve. If you want to gain conversions, the Facebook algorithm would need a steady stream of conversions in order to best learn how to best manage your ad campaign.
You can help feed CBO the data it needs to get the best out of your ads by setting enough budget to hit that 50 per week target.
If that is too rich for your blood, set a more affordable budget. Instead of aiming for 50 conversions a week, aim for 20. This way you can test how your ad sets perform, and eliminate under-performing ad sets yourself. With fewer competing ad sets in the same campaign, your budget will get closer to hitting that 50 a week target ideal for learning.
 

Avoid disrupting CBO’s learning phase

As CBO is AI-based, it needs time (as well as funding) to “learn” how to best manage your ad.
If CBO is disrupted by significant change, it will reset its learning phase- wasting
your time and money.
Facebook defines significant changes which force CBO to restart its learning phase as:

• Any change to targeting
• Any change to ad creative
• Any change to optimisation event
• Adding a new ad to your ad set
• Pausing your ad set for seven days or longer
• Changing bid strategy

Obviously, avoid doing any of that in the middle of your campaign run.
That doesn’t mean that you can’t be bold, creative or experimental with CBO. You can still test new strategies. But instead of placing all of your test ad sets into the same campaign, try splitting them.
Let’s say you want to test some new creative but worry about how it’ll impact your current ad campaign. In this case, you can create a separate “test campaign” for your new creative.
Set a small budget for it and see how it fairs. If it fails, you haven’t impacted your more trustworthy ad sets with your experiment. If it succeeds, then you can add this “test” ad into a new ad set within your primary campaign. Alternatively, you can save it for future campaigns.
 

Final thoughts

Regardless of how we may personally feel about Campaign Budget Optimization, the fact remains that it is here to stay. We are entering a new age of algorithmic, AI-led social media advertising.
The rise of the machines doesn’t have to mean the end of human Facebook advertising though. Instead, it adds new tools that we can use to our advantage.
The tactics listed in this article are some of the best practices we have for going into 2020. As things change, Filed can keep you up to date with all the latest news and tricks.