When it comes to running effective Facebook ad campaigns, every setting and adjustment you make plays a critical role in determining your ad’s success. One such setting that has the potential to derail your campaigns if not used correctly is Campaign Budget Selection
Budget Optimization (CBO)
While CBO can be an effective tool for managing your ad spend automatically, it can also cause issues if not aligned with your specific advertising goals.
In this blog, we’ll dive into how CBO can both enhance and hurt your campaigns, discuss the pros and cons, and highlight best practices to ensure you make the most of your digital marketing efforts
What is Campaign Budget Optimization (CBO)?
Campaign Budget Optimization, or CBO, is a feature in Facebook Ads Manager that automatically distributes your allocated budget across various ad sets within a campaign.
The algorithm optimizes the budget allocation in real-time based on the performance of each ad set, with the goal of delivering the best results for your spend.
Instead of setting individual budgets for each ad set, CBO takes over and dynamically decides how to distribute your budget to maximize performance. This feature seems convenient, but if not managed properly, it can sometimes have a negative impact on your campaigns.
The Risks of Using CBO Incorrectly
While CBO is designed to be helpful, it comes with certain risks, especially if you rely on it without a full understanding of how it works.
One major pitfall is uneven budget distribution. Facebook’s algorithm may decide to allocate more budget to certain ad sets over others based on early performance data, but this might not always align with your overall campaign strategy.
For instance:
- High-performing ad sets may get underfunded: If Facebook detects potential in other ad sets, it may start diverting more budget there, even if some of your proven high-performing sets start getting underfunded. This can be problematic if your best-converting audience or creative is in a different ad set
- Performance data isn’t always immediate: Facebook may allocate the majority of the budget to an ad set that performs well early on but neglect other sets that might improve performance over time. This imbalance could lead to wasted budget on short-term high performers rather than long-term conversions
These factors can cause ad fatigue or waste your budget on less effective audiences, hurting the overall return on investment (ROI).
Why Manual Budget Control Can Be Better
In some cases, manually controlling your ad budgets may provide better results. When you set specific budgets for each ad set, you maintain full control over how much is spent on each target audience or creative variation.
This is especially useful when you have historical data or insights into which audiences or creatives tend to perform well.
Manual budget allocation allows you to:
- Prioritize high-converting ad sets: With manual control, you can ensure that your top-performing ad sets always receive the budget they deserve, reducing the risk of wasting money on underperforming ad sets
- Test more effectively: Instead of letting Facebook determine where your budget goes, you can assign equal budgets to test different ad sets or creatives evenly
Manual control may seem like more work, but it provides the flexibility and precision many advertisers need to make the most of their Facebook paid ads.
When to Use CBO: Best Practices
CBO isn’t inherently bad—it just requires careful planning.
There are certain scenarios where CBO is beneficial for digital marketing campaigns, and understanding these situations can help you decide when to leverage CBO and when to rely on manual budgeting.
Here are some best practices for using CBO effectively:
- Use CBO when testing multiple audiences or creatives: If you’re running a large campaign with many ad sets, CBO can help you optimize your budget across different variables without the hassle of manually tweaking each ad set
- Set minimum and maximum budgets: Facebook allows you to define minimum and maximum budgets for each ad set, giving you more control over how much is allocated to each ad set while still using CBO
- Monitor performance closely: CBO requires close monitoring, especially in the early stages of a campaign. If you notice that one ad set is receiving too much or too little budget, consider adjusting your strategy
- Use CBO for campaigns with similar goals: CBO works best when all ad sets are aligned toward a common objective. For example, if your goal is lead generation, it’s easier for Facebook to optimize budget allocation across similar ad sets
Horizontal vs Vertical Scaling with CBO
Scaling your ads is an essential part of any Facebook paid advertising strategy. However, CBO plays a different role depending on whether you’re using horizontal scaling or vertical scaling.
- Vertical scaling: This refers to increasing your overall budget for high-performing campaigns. CBO can be useful here as it automatically allocates the increased budget to the best-performing ad sets
- Horizontal scaling: This involves adding more ad sets to target new audiences or test new creatives. If you’re using CBO in this scenario, make sure to monitor how Facebook distributes the budget across new ad sets to ensure that none are underfunded
Conclusion: Balance is Key in Budget Allocation
The key to successfully managing Facebook ad campaigns is knowing when to use CBO and when to opt for manual control. While CBO offers convenience and automation, it can backfire if you aren’t monitoring budget distribution or aligning it with your objectives.
By understanding the risks and benefits of CBO and following the best practices outlined above, you can use this tool effectively to enhance your ad campaigns.
Whether you’re manually controlling budgets, leveraging CBO for optimization, or scaling your efforts across multiple platforms, balance and ongoing optimization will ensure your Facebook ads perform at their best.
