Facebook CBO - Advantage Campaign Budget: Practical Guide

Facebook's Campaign Budget Optimization (CBO), now Advantage Campaign Budget, automatically distributes the campaign budget among ad sets to achieve the best results, optimizing efficiency and maximizing ROI.

Investing in Facebook advertising is very profitable, but only if you do it with knowledge.

Today I want to talk to you about Facebook CBO - which Meta has recently named Advantage Campaign Budget - because to succeed with ads you need to know how to maximize ROI - Return on Investment.

Let me also say, because it's important for you to know, that as of April 2024, Facebook is still the most popular and used social network, much more than YouTube, Instagram, and TikTok.

That's why I recommend you read the guide I've prepared to help you scale your business by optimizing the return on your investments in Facebook CBO campaigns.

I'll show you how to best use CBO (Advantage Campaign Budget) to optimize your marketing strategies. Let's not waste time and get started. Enjoy reading!  

What is Facebook's budget?

Let's start with the basic notion: the budget is the amount of money you're willing to invest in Facebook ads to reach your target audience. You can set the budget at the campaign level, ad set level, or individual ad level.

Campaign Budget Optimization: What It Is and How It Works

The Campaign Budget Optimization (CBO), now Advantage Campaign Budget on Facebook, allows you to set the budget at the campaign level, rather than at the ad set level. Meta will then automatically distribute the budget among the various ad sets based on their performance, optimizing in real-time to improve results.

How CBO Works: Setting the Budget at Campaign Level

First, you need to determine the budget you want to invest for the entire campaign, which can be daily or total. Facebook then automatically distributes the budget among ad sets based on their performance, using its powerful algorithms that monitor performance in real-time.

Here's a practical example:

You have a daily budget of 100 euros and have 5 active ad sets. Facebook initially distributes these 100 euros evenly, but if one ad set starts to perform better, it will allocate more budget to that set to maximize campaign results.

When and Why CBO Campaigns Are Useful: The Advantages

CBO is especially useful in these situations:

CBO is providential when managing campaigns with many ad sets, as it facilitates budget management and distribution. Think about the convenience of not having to manually optimize each ad set, with the guarantee that Meta's super-sophisticated machine learning will do it!

And what about its usefulness for testing different creatives, targeting, or bidding strategies. Meta will understand which ones perform better and will think about distributing the budget!

Not to mention that by entrusting budget optimization to Facebook, you can be at ease even for long-term campaigns that require frequent changes.

Why Use CBO

Thanks to CBO, the budget is used in the most efficient way possible, directing money towards the ad sets that offer the best results.

It saves you valuable time that you can spend on other strategic activities and improves the return on investment (ROI) of advertising campaigns. With CBO, you can scale campaigns more efficiently and stay away from odious and insidious waste of money.

Choose between daily budget and total budget

Meta offers advertisers two options to choose from: daily budget and total budget. Now let's look at the advantages of each, based on your business objectives.

1. Daily Budget

It's simply the budget you want to spend per day for a Facebook advertising campaign. It's very advantageous because it allows you to keep your investment under control every day and make changes in real-time.  

Moreover, you don't risk exceeding the daily spending limit you've set, especially for longer campaigns that require constant modifications and checks.

2. Total Budget

It indicates the maximum amount you're willing to spend for the entire duration of the campaign. The total budget helps you avoid sudden and uncalculated expenses.  

Facebook distributes the budget optimally throughout the campaign duration, maximizing results. It's certainly the right choice for campaigns with a defined duration and clear objectives, and it doesn't need daily monitoring.

Pay Attention to the Minimum Budget Meta Requires to Publish and Optimize Ads

One of the great advantages that makes us love Facebook ads so much is the flexibility we're given in choosing how much budget to invest. You can choose to spend modest amounts, like €5 a week, or invest significant sums, however, you should know that some advanced ads require a minimum spend amount.

For most ads, you can set a very low budget, even just €1 per day. Some types of ads, such as those aiming for specific conversions or a highly targeted audience, require higher minimum budgets, which are indicated to you while creating the ad.

Tips and Best Practices for Making the Most of Your Facebook Campaign Budget Optimization Budget

Here are some tips and best practices for optimizing the use of Facebook CBO.

1. Don't Exceed 70 Ad Sets per Campaign

Too many ad sets slow down the learning phase when ads are published, so stay within the limit of 70 to optimize best.

2. Add New Ad Sets in Bulk

Every time you add new ad sets, the optimization system takes time to re-distribute the budget. If you add them in bulk, you'll save time on optimization!

3. Don't Pause and Reactivate Ad Sets Manually

When you pause an ad set, Facebook's CBO algorithm no longer considers it, and by reactivating it, you might find yourself without budget because it's already finished.

4. Don't Overuse Spending Limits for Ad Sets

Setting spending limits that are too strict hinders overall budget optimization. So don't overdo it!

5. Make Changes All at Once

Each modification corresponds to a new start of the learning phase and thus a slowdown in optimization, so you should always try to make all the changes you need at once.

6. Be Aware: Audience Sizes Affect Budget Distribution

Ad sets with a larger audience tend to receive a greater budget allocation, so think carefully when setting up your campaign!

7. Don't Pause Ad Sets with Low Frequency

CBO distributes the budget to maximize opportunities. Pausing these groups can increase the cost per action (CPA) for other groups.

8. Focus on Campaign-Level Results

Evaluate the overall success of the campaign and don't get fixated on the performance of individual groups!

How and When to Set Spending Limits for the Advertising Campaign

1. I recommend setting minimum spending limits when you're exploring new markets and need the right budget to test them, or when you have specific budget needs for certain ad sets.

The minimum spend limit must always be equal to or less than the total campaign budget. For example, if the campaign budget is 100 euros, the minimum limit should not exceed this amount.

2. Set the maximum spend limits when you want to keep the overall budget under control and don't want an ad set to exceed a certain spending threshold or, even worse, leave other ad groups without budget.

Pay attention to what I'm about to tell you:

If you pause or delete an ad set, the maximum limit you've set changes. Here's a concrete example: if the total campaign budget is 100 euros and the maximum limit per ad set, let's say there are 4, that you've set is 25 euros, pausing one will reduce the maximum limit to 75 euros.

If you decide to increase the campaign budget, remember to correctly set the maximum limit for each ad set, or Meta won't use all the budget at its disposal!

Do you want to know if I recommend using both maximum and minimum limits together? The answer is no, because the tangible risk of optimization limitations is very high and it affects your ROI!

And remember to follow the invaluable advice from Meta “itself”, which suggests that there should be a difference of at least 1 euro or 0.9% between the minimum and maximum limits to maintain flexibility in budget distribution.

Practical Guide to Setting Up a CBO Campaign Based on Audience

Arm yourself with the best qualities of an advertiser and make extensive use of care and analytical attention, because setting up a CBO campaign based on audience requires a targeted strategy. Here's a practical guide to setting up your audience-optimized CBO campaign:

• Identify your target audience. To do this, carefully analyze the demographic data and interests you've gathered from previous ads and that Meta makes available to you.
• Segment the target audience based on age, gender, interests, behavior, and geographic area.
• Create an ad set for each audience segment and create an effective message for each one.
• Establish the budget. I recommend letting the algorithms handle the automatic distribution among ad sets. Why wouldn't you take advantage of Meta's refined intelligence?  
• Set the campaign budget. Do this: access your Ads Manager and select Create Campaign. Choose the objective among conversions, traffic, engagement...  
• In the budget configuration section, activate the Advantage Campaign Budget option (formerly Campaign Budget Optimization). Choose between daily or lifetime budget and Facebook will automatically distribute it among your ad sets.
• Use Ads Manager and keep “an eye on all the key metrics of a Facebook campaign, such as cost per click (CPC), cost per acquisition (CPA), and return on” investment (ROI). Never rest on your laurels, and if you see something's not working, make all necessary changes!
• Perform A/B tests for creatives and messages within ad sets. You're not a fortune teller, and even the best graphics or copy may not guarantee results. That's why you should always test multiple messages and ultimately focus on the one that performs best.  

Now, let's move from theory to practice!

You have 2 campaigns and want to test 3 different audiences for each. Remember, never go too far with the number of ad sets, especially if you have a limited budget, or you'll significantly slow down optimization.

Contrary to what many think, having simple structures rather than complicated networks leads to much better performance results. And remember that the first thing to do is to determine which audience you're targeting with your message.

Now, let's say we at Qreativa want to sell a course on CBO and therefore we're mainly targeting advertisers and digital marketing enthusiasts. The structure of 2 campaigns + 3 ad sets, based on the interests of the target audience could be as follows:

1. Campaign 1 - Advertiser
   1. Ad Set 1 - Online Advertising (interest)
   2. Ad Set 2 - Web Marketing (interest)
   3. Ad Set 3 - Agencies (behaviors)

1. Campaign 2 Digital Marketing
   1. Ad Set 1 - Social Network (interest)
   2. Ad Set 2 - Online Shopping (interest)
   3. Ad Set 3 - Advertising (interest)

What if we wanted to test a broad audience, meaning a wider audience without specifying particular interests or behaviors?

Well, in this case we'll let Meta take the lead, which will find users who might interact with us and our course.

In this case, we'll have a structure that segments the audience for each campaign and ad set based on, for example, gender, “age, and” geographical area:

1. Campaign 1 - Woman
   1. Age 30-40
   2. Age 40-50
   3. Age 50-60

1. Campaign 2 - Man
   1. Age 30-40
   2. Age 40-50
   3. Age 50-60

1. Campaign 3 - Geographical Area
   1. Italy
   2. Germany
   3. France

Now it's time to see a practical example of CBO with a lookalike audience, which tends to be the most performant and therefore also the most expensive in terms of CPM (Cost per Thousand Impressions).

To be clear, the lookalike audience (LAL) is the one that allows you to reach new people similar to your existing customers.

Facebook uses demographic data, interests, and behaviors to create an audience that resembles a source audience defined by the advertiser, such as website visitors, Facebook page followers, Facebook Pixel events, or customers from a contact list.

Let's see how you can set up ad sets and test the performance of a CBO campaign with LAL audience:

1. Ad Set 1:

• 1% Lookalike Audience (users who have already purchased the course previously)

1. Ad Set 2:

• 2-5% Lookalike Audience (users who have already purchased the course previously)

By setting the Advantage campaign budget (CBO), Meta will automatically manage the budget distribution.

ATTENTION! You can set the LAL between 1% and 10% of a country's population. I recommend preferring 1%, which represents people most similar to your source audience if you want quality conversions, for example sales or qualified leads. Even 2%-5% is not bad, as it expands the reach but still maintains a good similarity to your source audience.  

A LAL of 6-10% finally gives you definitely the widest possible audience, but with less similarity to the existing audience. Certainly useful for increasing brand awareness and notoriety.

How to Scale a CBO Campaign

I'll tell you right away that it's not easy to scale a CBO campaign, but it's not impossible either if you learn to plan and act according to advanced and accurate strategies. Let's see how:

• The very first step is to carefully analyze the current performance of your campaign and start from there. You need to know what key metrics like CPC (Cost per Click), CPA (Cost per Acquisition), and ROAS (Return on Ad Spend) are saying, and you also need to know which ad sets are performing best.
• If someone told you that you just need to increase the budget to optimize campaigns on Facebook, nothing could be further from the truth, believe me! You need to increase the investment gradually, no more than 20-30% every 48-72 hours. Once you've done this, monitor what happens to the KPIs you're interested in.  
• Expand the reach of your audience, interests, and also consider using a lookalike audience to intercept leads similar to your current customers.
• Create new ad sets with slightly different targets or new creatives, but make sure all groups have enough budget available.

How to Read Reports and Understand if You've Optimized CBO to the Best

I've already told you, but I want to repeat it: it's important that you understand that you need to focus on the campaign results and not so much on those of individual ad sets.

Remember that daily budgets can fluctuate up to 75% above or below the daily average. These fluctuations are normal and are part of Facebook's real-time optimization.

For total budgets, spending can vary day by day based on the best times to publish ads.

Don't change the budget towards the end of the day, as the system may not have enough time to adapt. For example, reducing the daily budget late in the afternoon can cause overspending.

From the data, you'll soon understand that costs tend to increase over time, because initially, the publishing system looks for high-volume, low-cost opportunities. When these run out, the average cost per optimization event increases as it moves to more expensive options.

Look at the data on a weekly basis and don't obsess over checking it every hour, because you wouldn't have a balanced view but a distorted one of your Facebook advertising results!

Frequently asked questions

What's the difference between CBO and ABO?

We've seen what CBO is. ABO stands for Ad Set Budget Optimization, and it's the budget allocated for each individual ad set.

What are DABA campaigns?

DABA (Dynamic Ads for Broad Audiences) campaigns on Facebook ads use a “company's catalog to automatically show products to people who might be interested, even if they haven't visited the company's” website.

How many ads should be included in a CBO campaign?

No more than 3-5 ads per ad set in a CBO campaign, so Facebook will test different creatives and optimize budget distribution towards the best-performing ads.

Conclusions

Even in 2024, Facebook is the most used social network in the world, and leveraging the potential of CBO with a targeted strategy improves ROI and allows you to scale your business.

Whether you're new to the world of digital marketing or already have experience, make the most of this guide updated with the latest news. Advertising is a serious matter and requires precise skills and actions. Thanks to Facebook CBO, you'll distribute the budget effectively among different ad sets and maximize return on investment.  

If you want to know more and are looking for experts in CBO and advertising, contact us now and take advantage of the free consultation we offer!