Facebook CBO: Are Campaign Budget Optimization Ads Better?

Facebook CBO: Are Campaign Budget Optimization Ads Better?

Whether you're just getting started in digital marketing or you want to see what all the hype is about - you need to understand Facebook CBO and how to use it to your advantage. This relatively new approach to Facebook advertising has quickly become the norm - and for good reason. The Facebook algorithm is all-knowing, and the more you let it control your ads - the better results you'll see.

But, what is CBO in Facebook ads and how does it work? And, are there any instances where an ABO might be the better approach?

Today, we're going to address all these questions and more. You'll learn the benefits of running CBOs, and tips and tricks to help you get the most out of your campaign. By the end of this guide, you'll be well on your way to printing cash. First things first - what is CBO in Facebook ads?

What Is CBO In Facebook Ads?

We're going to begin by answering the most common question we get when it comes to CBOs - what is CBO in Facebook ads? CBO stands for campaign budget optimization. But why does this matter? And what does it mean?

When you first start building your campaign, you'll have to start by choosing between a CBO and an ABO strategy. In the past, ABO (ad set budget optimization) was the only way to go about setting and spending your budget. You'd have multiple ad sets within a campaign - each with its own unique budget. Ad sets would spend independently of each other.

In a CBO, however, you set the budget at the campaign level - not at the ad set level. This means the Facebook algorithm will disperse the budget itself among your individual ad sets. The idea is that as Facebook learns more and more, the algorithm is better at predicting which users will convert for you. Thus, it can allocate more spend accordingly. This is just another way Facebook helps optimize your ads for you.

What Are The Benefits Of CBO Facebook Ads?

So, what are the benefits of CBO Facebook ads? They can be summarized as higher profitability and effortless scaling.

Facebook's campaign budget optimization strategy works off a deep learning algorithm. If you've spent time (and money) on Facebook advertising, you know that this algorithm knows your customers better than you do - and it can find them with ease among the 1.84 billion users on the platform.

So, when you let it take the wheel in terms of budget allocation, you can trust that it is going to spend more on top-performing ad sets and opportunities. This means you don't have to come in and adjust the budget manually depending on the results. But, it also means your ads will - in theory - become more profitable over time as the algorithm allocates more and more of the campaign budget to winning ad sets.

However, there are some drawbacks to running CBO Facebook ads, too. Sometimes you'll find that the algorithm never even gives an ad set a chance - it gets no spend while another ad set suck up all your budget. Sure, you have to trust the algorithm - but at a certain point, you may start to wonder what would happen if you could get some spend to that other ad set.

So - Is Facebook CBO The Right Approach For Me?

For most advertisers with higher budgets, a Facebook campaign budget optimization strategy is the right approach. We usually see it outperform ABO in split tests, and the algorithm is only going to get better and better over time. Why not use a campaign strategy that earns more conversions with the same budget? That's typically the case for us when comparing CBO vs ABO.

When Does It Make Sense To Use Facebook ABO Instead?

With that said, there may be instances when an ABO is a better approach for you than a CBO. Many members of our digital marketing community report that ABO works better with lower budgets. If you're spending just $20-50 a day, you may struggle to see profitability with a CBO.

This isn't necessarily the algorithm's fault. Unfortunately, it takes time for the algorithm to learn. Time and more importantly, money. You have to spend through the learning phase to get to the point where the algorithm can effectively distribute the budget on its own. And if you don't spend enough, you aren't giving the algorithm enough to work with. In fact, some say that ABO works best for any campaign under $1k per day. The only way to figure out which of these approaches works best for you is by trying them both and seeing which generates better results.

Another question we see is - what if I have just one ad set in my campaign? In this instance, we actually recommend sticking with CBO despite having no other ad sets to put it up against.

To help you get the ball rolling, we're going to uncover some tips and tricks for getting the most out of your Facebook CBO.

Tips For Getting The Best Results With A Facebook CBO Strategy

Now that you know a bit more about Facebook CBO, we want to unpack some of the best tips and tricks we've seen to make this strategy work for you. Let's start by talking budget.

Facebook CBO Needs High Budgets To Work Efficiently

As we just mentioned, CBO Facebook ads need an ample budget to work efficiently. If you aren't able to start with at least $100, you are probably better off sticking with ABO Facebook ads.

Give The CBO Ample Audience To Pull From

As we discussed earlier, Facebook campaign budget optimization works best when you give the algorithm more to work with. That is true of time, budget, and also audience. This means that you need to build your ad sets with ample audience to pull from. The larger the audience in a CBO, the better.

In saying this, we want to encourage you to also group your audiences by size - to ensure they each get a fair shot at the budget. Because the algorithm will default to the larger audiences, smaller audiences may never get any delivery. So, make sure the audiences in your CBO are fairly similar. You can have one CBO with 3-4 of your best smaller audiences, and a CBO with your large, broad audiences.

Break Out Different Stages Of The Funnel Into Their Own CBO

When advertising on Facebook, you want to target different stages of the buying funnel. Here is a quick breakdown for those who are new to marketing in general:

  • Top of the funnel (TOFU): This is your coldest audience - people who have not engaged with your brand before and are just being introduced to you for the first time. This is where the majority of your advertising efforts will go, as this is where you start to acquire new customers. Think interest audiences, lookalikes, or broad targeting.
  • Middle of the funnel (MOFU): These people have engaged with your brand to some degree, but have not shown signs that they're quite ready to purchase. Think view content, website visitors (specifically homepage or blog content, but not product page).
  • Bottom of the funnel (BOFU): These people are at the very end of the buying cycle and are ready to make a purchase. Think add to cart, viewed product, initiate checkout, etc.

With an ABO campaign, you can add all stages of the funnel into their own ad sets with their own spend. This keeps your ads manager nice and organized. But with CBOs, you want to break out TOFU, MOFU, and BOFU in their own campaigns. Why?

Think back to what we just talked about - breaking out audience sizes into their own CBOs so they each get a fair shake. Well, your TOFU audiences are going to be far larger than your BOFU audiences. This means you might not even get the chance to put retargeting ads in front of those who have added to the cart.

Furthermore, the types of creative, copy, and KPIs you implement across the various stages of the funnel will differ. So, you need a minimum of three CBOs delivering at any given time.

Don't Tweak or Pause Ad Sets - Let The Algorithm Work!

With an ABO, you need to monitor results throughout the week and tweak/pause ad sets and individual ads as necessary. But with a CBO, you are better off leaving the campaign alone once you hit "publish". The only changes you make should be incremental scaling of budget (around 20% every few days) or introducing winning ads from your creative testing campaign.

Anything you do that resets the campaign to the learning phase will mess with the results you see. That means don't tweak ad sets or pause them. Part of running an effective CBO campaign is learning to trust the algorithm - and letting it do its thing. Sure - it's hard to let an unprofitable ad set continue running. But if the campaign as a whole is profitable, leave it alone. Look at your KPIs at the campaign level only.

Don't Overdo It With The Ad Sets

When creating your CBO Facebook ads, try to limit your ad sets to just your top performers or your best opportunities. The more ad sets you have, the more you're asking the algorithm to split the budget among. It will take longer for you to exit the learning phase. It will cost you more, too, as the algorithm experiments with different ad sets.

Facebook themselves advises you to stay under 70 ad sets in a CBO. If you exceed this, you will not only experience a harder time scaling - you'll be limited in the number of edits you can make after publishing.

Final Thoughts On CBO Facebook Campaigns

Now you know what CBO is in Facebook ads, along with the benefits of this strategy. At this point, it's time for you to take action and implement the tips we've provided above to start saving time while scaling your ads.

If you currently have ABO ads running, don't completely overhaul them with Facebook CBO ads. Instead, start building out a few CBO Facebook ads and running them against each other in a split test. As you see how powerful the CBO can be, you'll start turning off your ABOs gradually - we have no doubt about it.

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