A Useful Guide To Facebook Campaign Budget Optimization

Facebook Campaign Budget Optimization is here to stay. 

And it can help you get more bang for your buck. 

But before you start using it, it’d be a good idea to understand how it works. 

By the end of Feb. 2020, Facebook is making CBO, short for Campaign Budget Optimization, the new standard for advertising campaigns. In other words, you won’t have a choice but to use it.

Facebook even wrote an article on their site about CBO, which gives further validity to this shift 

My goal for this blog post is to provide some necessary groundwork so you can get the most out of CBO. 

So, let’s dive right in. 

What is Facebook Campaign Budget Optimization?

Campaign Budget Optimization, or CBO for short, is a setting within Facebook ads that allows you to manage your budget at the campaign level. You can either set a daily or lifetime amount and customize the bid strategy for your particular needs. 

Other than that, campaign will distribute the budget among your ad sets and get you the most amount of optimization events according to your bid strategy. 

For example, if your bid strategy is lowest cost, then Facebook will optimize your ad spend across ad sets to get you the most optimization events possible while spending the least amount of money. 

Note: If you want an in-depth guide on Facebook Ads, check out this article. 

Don’t Pause Your Ad Sets

facebook campaign budget optimization

According to the official website, Facebook warns against pausing your ad sets when using CBO. If you pause and unpause your ad sets, you might notice that most of your budget goes towards one ad set. 

As a result, your data will be skewed and your budget usage will be inefficient. 

Understanding Your Results

facebook campaign budget optimization

Facebook recommends interpreting your results at the campaign level. You should look at the total amount of optimization events as a whole and the overall cost per optimization event. 

This is because CBO manages your budget at the campaign level. Your budget gets distributed amongst your ad sets in the most efficient way possible to maximize your ad spend.

Want to be part of the Journey?

I'm on a mission to hit my first $10,000 month. My email subscribers get "first dibs" on everything I learn along the way

A Simplified Example of Facebook Campaign Budget Optimization

To help you wrap your head around Facebook Campaign Budget Optimization, here's a simplified example for how it works. This example originally appeared on Facebook and has been adapted for this blog post.  

Let's say that there are 15 opportunities for you to show your ad divided among 3 ad sets. We're also going to label each ad set A, B, C, for the sake of simplicity. 

We're also going to assume that 4 opportunities for ad set A are $5 each, and 6 opportunities for ad set B costs $2 each. 

For ad set C, there are 3 opportunities that costs $1 each, 1 costs $7 each, and 1 costs $8. 

Your total campaign budget is $30.

Before we go any further, keep in mind that you won't know about the number of opportunities within each ad set nor how much they would cost when you're running and reporting on the campaign. 

When we use CBO, we get 12 optimization events for $30, which comes at an average cost of $2.50 each.

Here's how that would break down: 

  • A: 3 optimization events for $5 each ($15 of total spend
  • B: 6 optimization events for $2 each ($12 of total spend)
  • C: 3 optimization events for $1 each ($3 of total spend)

At this point, you might wonder: "Why did my campaign spend the most on the ad set with the highest cost per optimization event (ad set A) and so little on the one with the lowest cost per optimization event, i.e. ad set C?"

Since you wouldn't know about the more expensive opportunities avoided, this seems like a valid question to ask. 

But for the sake of this example, we know that ad set C starts off initially the cheapest among the 3 ad sets. However, it gets expensive much quicker. 

Ad Set A on the other hand, starts off much more expensive than the other ad sets, but the costs remains much more stable, which leads to a smoother performance overall.

Want to be part of the Journey?

I'm on a mission to hit my first $10,000 month. My email subscribers get "first dibs" on everything I learn along the way

80 / 100

Leave a Comment