Facebook Makes CBO Mandatory & It’s A Game Changer

Data. Marketing. Technology.

So lets first explain what Campaign Budget Optimisation, CBO for short, actually is but to do so we first need to talk about budget optimisation in general.

For those who don’t know, budget optimisation is the practice of moving budget from poor performing ad sets to higher performing ad sets so you are always maximising your return on investment. Usually, this is done manually by the Facebook campaign manager and it goes a little something like this.

Let’s say I have a campaign to sell footballs, within that campaign I have 3 ad sets which all contain the same ads. Ad set A is targeted to people aged 18 – 20, ad set B is targeted to people aged 21 – 30 and ad set C is targeted to people aged 31 – 40. I give each of these ad sets a £100 per day budget and leave it for 1 day. When I come back the next day, ad set A has generated £600 in sales, ad set B has generated £400 and ad set C has generated £300. Clearly ad set A is the strongest performer with a Return On Ad Spend (ROAS) of 6.0.

Now, it wouldn’t make sense to leave these ad sets with £100 of the daily budget each when I can maximise my returns by taking budget from the weaker performers and re-investing in the strongest performer. In this scenario, I would re-distribute the total £300 a day budget in the following way. Ad set A would get £175, ad set B would get £75 and ad set C would get £50. I would then leave this to gather data for a day and re-optimise again the next day if needed.

This is how budget optimisation on Facebook has always been done. Since Campaign Budget Optimisation has been rolled out by force this September. Meaning the old ways of someone manually redistributing budget among ad sets isn’t possible anymore. Instead, Facebook’s Campaign Budget Optimisation will use data-driven AI to automatically make the optimisation decisions for you. This means instead of granting each ad set a budget you will now have to grant the campaign an overall budget and Facebook will distribute that to the ad set as it sees fit.

Many advance Facebook marketers are opposing this change as they enjoy the granular control they have over their budget distribution. However, I take a different view, I’ve been using CBO for over 6 months now and I believe it’s a game-changer for all advertisers, and here’s why:

Firstly, CBO can make faster decisions than us mere humans. When optimising campaign ad sets, I optimise within an hour, 1 day or even weeks depending on when I ‘feel’ that there is enough data for me to make a valid optimisation decision. This method of waiting for enough data until it feels significant is very much a finger in the wind approach. Since CBO uses data-driven AI it knows exactly when the data has reached statistical significance to make a valid decision and it makes that decision there and then. This means that your budget is spending less time being held within an ad set that isn’t performing when using the manual method.

Secondly, CBO operates 24/7, without breaks, without holidays and without needing sleep. No matter how much of a workaholic you are, you can not monitor campaigns 24 hours a day, but CBO can. This means that during the time you are sleeping, CBO could identify a trend that has reached statistical significance, optimised budget in-line with that trend and in doing so tipped the performance of your campaign overnight; all whilst your asleep and none the wiser. Personally, I find that extremely appealing knowing that even though I have to rest, CBO has my back to some extent.

CBO is also better for newcomers, which may be the main reason why Facebook has rolled this out. After all, the more advertisers Facebook gets on the platform the more money they make. However, Facebook also needs to keep those new advertisers on the platform, so I genuinely believe that Facebook does actually want advertisers to succeed with their goals. At the end of the day, if Facebook didn’t work for advertisers, then they simply wouldn’t continue to spend money on the platform. So, CBO is a tool designed to ensure that Facebook’s AI is working as hard as possible for advertisers, both newcomers and professionals, to achieve their goals and continue investing in the platform.

Finally, after using CBO for the past 6 months I have naturally changed my optimisation habits to a ‘bigger picture approach’. Rather than spending hours optimising each ad set within every campaign I have now become fairly comfortable with CBO handling them for me and instead I focus my time on optimising the campaign level and overall ad funnel strategy. This has allowed me to make greater overall decisions on campaign structure which have enabled greater growth and a greater return on investment for my clients.

So, although very sceptical at first, CBO gets the stamp of approval from me and I’m more than with Facebook’s mandatory rollout.