POV

Facebook Campaign Budget Optimization

Background

Facebook is officially migrating all campaigns to Campaign Budget Optimization (CBO) this September. While CBO has been available in Ads Manager since November 2017, historically, campaign managers have been able to set and control budget at the Ad Set level and make manual optimizations based on KPI performance. The new system will remove that option, with advertisers only being able to set minimum and maximum spend limits at the ad-set levels. All Facebook advertisers are aware of this update and we have received proper instructions on how the new system works.

 

How it Works

Campaign Budget Optimization is a tool that algorithmically distributes campaign budget to the top performing ad sets. Using Machine Learning, Facebook understands advertisers’ ad set performance against native KPI metrics and automates delivery to favor the ad set driving the most effective performance in real time.

The major workflow difference is that instead of setting lifetime or daily budgets at the ad set level, budget is set only at the campaign level.

Here’s a look at two visuals, one without CBO (left) and one with CBO in place (right). In theory, CBO should work to distribute the campaign budget to the top-performing ad set. CBO works with any campaign objective and is best suited for campaigns with multiple ad sets.

 

 

Challenges and Potential Benefits of CBO:

 

Resolution POV

Currently, Facebook has a built-in optimization called Conversion Optimization, where ad delivery can be improved to show the ad to the best audience based on recent conversions. This optimization is based on the learning phase (data gathering) and happens at ad set level.

Campaign Budget optimization is different as it considers what audience to allocate the most budget to, rather than who to display the ad to within each audience. There is some overlap, as large budget shifts can reset the learning phase and Campaign Budget Optimization helps to avoid this. Instead of us dictating the ad set budget and how much we want to spend for each target, we’ll simply tell Facebook how much budget we have for the entire campaign and the algorithm will distribute the dollars as it sees fit.

With the present campaign optimization feature, we are not able to increase budget quickly enough without throwing off the algorithm to get the most leads. With CBO, Facebook is eliminating the need to manually shift budgets between ad sets, giving us the opportunity to scale campaigns quicker, thus, giving us more time to allocate elsewhere. We will be able to efficiently feed large ad sets with large audience sizes money as quickly as possible without throwing off numbers to gain the best results.

 

Summary

Instead of leaving budget optimizations in the hands of the buyers, Facebook would like to control how budget is spent and own the optimization decision-making. According to Facebook, “Budget optimization works in real time to determine the most effective use of a business’ ad dollars to help lower cost per result and increase return on ad spend.”

Facebook saw surmounting data trends that indicated campaign under-delivery, which stemmed from budget constraints manually put on ad sets. So, the CBO update will better predict trends and marketplace volatility and will enter optimal auctions on behalf of the advertiser.

Resolution will begin to prepare for the upcoming migration by testing CBO on new and existing campaigns, evaluating the overall results of the campaign, creating strategies, and working with Facebook to mitigate any potential issues.

For information about Resolution, visit our website: www.resolutionmedia.com