03.06.2019 Blog

Facebook's Campaign Budget Optimization: What You Need to Know

Facebook recently announced it will be making Campaign Budget Optimization (CBO) the ad platform’s default starting September 2019. Wow - that’s a lot of buzzwords for just one sentence.

If you get confused and a little anxious each time Facebook makes an announcement like this, you’re not alone. For many, it’s hard to keep up with the platform and industry that changes on the daily. But, that’s what we’re here for — to help you understand what changes like this mean for your business.

So what is CBO and how will it affect your organization or business? We’ll break it down for you.

Current Options: Ad Set Budget Optimization or CBO

When you’re advertising on Facebook, there are three levels: Campaign (the highest, “big picture” level), ad set, and ad. Currently and until September 2019, Facebook advertisers can set a daily or total budget for each separate ad set within a campaign. This gives advertisers more control over which ad set receives more or less of the budget. Since you set your target audience within each ad set, this also determines which target audience receives more or less of the budget.

Right now, advertisers also have the option to opt into CBO. With this method, the budget is set by campaign and will be distributed to ad sets automatically by Facebook as it determines which ad sets are performing best. Starting in September, Facebook will make CBO the fixed default, so advertisers no longer have a choice between the two options.

What This Change Means for Your Business

So why is Facebook making this change? The platform says one benefit is that it will help advertisers achieve better results for the same total budget. They note that this method will allow them to “automatically and continuously [find] the best available opportunities for results across your ad sets and [distribute] your campaign budget in real time to get those results.”

Instead of each ad set spending the exact amount of money you budget for it, Facebook will optimize in real time, allocating more of the overall campaign budget toward the ad set that’s performing best with the goal of getting you the most results possible. It’s important to note that even with this change, advertisers will still be able to set minimum and maximum ad set spend limits after September 2019, to give Facebook “guardrails” for what they can allocate to an ad set.

One potential issue that could arise is a situation in which the lowest-cost results aren’t necessarily what your business needs. For example, if one of your ad sets is targeting a demographic more likely to engage with an ad or click through to a website, in theory Facebook could optimize more toward this ad set because it’s getting cheaper results for you. But what if the audience that provides the best leads for your business (ones that are likely to convert into customers, not just engage) tend to cost a little more? This is where it will be more vital than ever to ensure your campaign objective accurately reflects the goal for the ad sets within it. Time will tell how the new setting will account for situations like this.

Overall, if the change allows our clients to get more of the results they desire (clicks, video views, form fills, etc.) for the same lifetime budget, this change has the potential to be mostly positive. Ultimately, like most digital advertising methods, the impact this has and whether it “works” will probably depend on the industry and brand in question. As you start to prepare for the change, try out the CBO option and see how it goes. Keep an eye on the results and don’t be afraid to use the minimum and maximum ad set spend if you want to see what it’s like when you maintain that little bit of control.

Have questions or concerns about this change? Let us help! Follow us on Facebook, Instagram or LinkedIn and let us know - we’d love to hear your thoughts on it!