What are Facebook CBO and ABO Campaigns?
When running Facebook Ad campaigns, it’s important to know the difference between (CBO) Campaign Budget Optimization and (ABO) Ad Set Budget Optimization. Both of these ways are critical to distribute your budgets. The following article covers how the two stack up against one another, how you can set up each campaign, the pros and cons of each, and the best time to use them.
What is a Facebook CBO Campaign?
Definition: CBO, the abbreviation for Campaign Budget Optimization, refers to when Facebook campaign optimizations are made from campaign level. While running CBO, you set a budget (daily or lifetime) for a complete campaign instead of establishing each ad set’s budgets individual budget. This gives Facebook more control over how the money is spent across ad sets.
What is a Facebook ABO Campaign?
Facebook advert campaign dashboard is split into three sections: campaigns, ad sets, and ads.
An ad set is a group of advertisements that share settings for where, how, and when to run. When you create an ad set, the choices you make at the ad set level automatically apply to all of the adverts in that ad set.
Definition: ABO is the acronym for Ad Set Budget Optimization, and it involves setting a lifetime or daily budget for each advertisement set. In a daily budget, you spend on a particular ad set each day, whereas your lifetime budget is what you will be spending during the campaign’s lifetime.
You can also use a Facebook ABO campaign to spend a set budget on particular audience characteristics like age, gender, interests, and location. So you could spend £50 on males and £50 on females, or £50 on those aged 18-25 and £50 on those aged over 25.
The Difference Between a Facebook CBO Campaign and ABO Campaign:
As mentioned, Facebook enables you to pick how you want them to spend your money. Facebook CBO campaign involves more automation and maybe a better choice if you’re looking to save time. Here’s an example of how a fitness brand may choose to spend their ad budget in a CBO or ABO campaign.
Fitness Brand Example:
A fitness company called ‘Gym Life Attire’ creates a campaign called ‘New 2021 t-shirt collection’ and they have a £9,000 budget for the campaign. Their 3 ad sets target people with 3 different interests; ‘weightlifting’, ‘losing weight’, and ‘Crossfit’. Gym Life Attire can either put £9,000 into the campaign at the campaign level.
By doing so, they will be enabling Facebook to spend the money in the way their algorithm believes it is going to get the best out of the budget. As a result, Facebook may automatically opt to spend £6,000 on ‘weightlifting’, £2,000 on ‘losing weight’, and £1,000 on ‘CrossFit’.
However, if Gym Life Attire wanted to spend £3,000 on each interest, they could choose to use the Ad set budget optimization setting. This would evenly spend the money, however, this is likely to lead to less promising results because one of the interests could have performed a lot better for them.
Surge Pilot Insight: If you are using substantial budgets, we’d recommend splitting your campaigns into at least two campaigns. Use campaigns to test ad sets and ads. For example, Gym Life Attire should have used approximately 5% (£450) of their budget to test 10 different ad sets in an ABO campaign (with £45 per ad set), before identifying the most effective 3-4 ad sets for a CBO campaign.
Benefits and Weaknesses of Facebook CBO Campaign
4 Facebook CBO Campaign Benefits
1. Greater ROAS (Return on Advertisement Spend)
There is no denying that one of the biggest advantages of Campaign Budget Optimization is that it has the potential to deliver a considerably greater return on advertisement spend and increased bang for your buck.
You may be wondering why is that? Well, the Campaign Budget Optimization budget setting will automatically distribute your budget to the ads, and the ad sets that are the performing best for the objective you are trying to fulfill. Hence, if you are trying to increase traffic to your website, the ads with a greater number of landing page views will acquire more amount of money behind them. Similarly, if you aim to boost the number of conversions, the ads and ad sets with the highest conversion rate will end up having more money allocated towards them.
2. Allows you to Save Valuable Time
The fact that you can save a lot of your time is another important benefit of CBO. When you use Campaign Budget Optimization, you do not have to spend your valuable time to alter your bids thoroughly based on the latest available data.
CBO does everything for you, and that gives you more spare time to focus on other critical matters. That is the whole objective of any automation feature. They are specifically designed to do all the manual elements of hard work to free up your valuable time.
On the flip side, the Facebook CBO campaign has certain drawbacks that you need to be privy to.
3. Very Cost-Effective
Facebook CBO campaigns can become very cost-effective because of the nature of their automation. By enabling Facebook to spend your money, you can reap the benefits. Although ad set budgeting can be more effective in initial campaigns, you should always eventually get to the stage of using a CBO campaign.
Surge Pilot Insight: Find your best ad sets and ads. Then put them in a CBO campaign to reap the best possible ROAS from your paid social campaign.
4. Easy To Set Up
A Facebook CBO campaign is very easy and simple to set up even for novices.
4 Disadvantages of Facebook CBO Campaign
1. More Challenging to Test New Adverts
Probably the biggest drawback of a Facebook CBO campaign is that it makes it very difficult and challenging to test out your ad sets and adverts. Sometimes, your ad sets and ads won’t be given the opportunity to perform, if others are seemingly performing better. This can limit your potential results and explains why it’s a good idea to use ABO campaigns initially.
2. Requires Patience
It would help if you gave CBO time to work its magic. It is not going to start bringing about improvements in your budgets instantly! You need to give Facebook a few days to work out where the high-performers are. It can sometimes take weeks but it all depends on your budget, your product price, your target cost per acquisition, the number of ad sets and ads you have in your campaign.
3. Needs Sizable Budget to Begin
As just mentioned, you require a considerable budget to start a Facebook CBO campaign. You need enough data to make solid decisions. How much? You just need to ask yourself, if you think you’ve justifiably spent enough to determine if a certain audience segment or advert is effective or ineffective.
4. Unreliable Results at Times
Some users have complained that results generated via CBO are not 100% reliable all the time. This is because ad sets don’t always enable you to test all ad sets or ads fairly. “The latest I heard is one agency saying that – with CBO – the moment they turn off an underperforming ad set, Facebook suddenly funnels 100% of the budget to a different ad set and ignores everything else. So they’ve resorted to pausing that campaign, and duplicating it with any changes they want to test.” (Source: Reddit)
Step by Step Guide: Setting Up Facebook CBO Campaign
Read the following for instructions about setting your bid strategy and campaign budget:
- To create a new campaign, visit Ads Manager.
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- Pick your objective (e.g. Brand Awareness/Traffic/Conversions)
- Secondly, toggle the on switch for “Campaign Budget Optimization”
- Next set a lifetime or daily budget
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- Select a Bid Strategy (it is recommended that you go with “Lowest Cost”)
- Press continue
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- Create your advertisements and advertisement sets as you normally would, but make sure that you do not activate them yet.
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This is exactly where most marketers will have to modify their behavior. We highly recommend that you keep your ads and ad sets paused or in draft mode until everything in your campaign is set to go.
It is important to keep in mind that when you make any substantial changes to your campaign’s advertisements, including new ads or editing copy, that will reset the Learning Phase of Facebook and cost you a greater amount of money.
Benefits and Weaknesses of Facebook ABO Campaign
The following are some important pros of Facebook ABO campaign:
3 Benefits of Ad Set Budgets
1. Easy Controlling of Budget
With daily ad set budgets, Facebook will only spend up to the budget amount per advertisement set you give it each day.
This spending pattern of using up your complete budget each day allows you to pace your spend more easily. Every single day you run the ad set, you can have faith in the fact that you will spend the same amount of money, making it easier to control and manage your budgets and make your financial plan.
2. You Can Identify Winning Audiences
Not only, can you control budgets for your ad sets, but you can also find winning audiences that are going bring you a higher ROAS. In the test stage of your campaign, you can identify the most valuable audiences before you proceed and spend higher portions of your budget.
Example: If your target cost per acquisition is £30, and you have 10 ad sets, we would suggest spending £600 on the initial ad set testing.
3. You Can Identify Winning Adverts
Alike ad sets, you can find winning adverts that are going to be higher performers in future campaigns, by having one unique ad per ad set. To do this, create the exact same ad set multiple times, but include a unique ad in each ad set.
Weaknesses of Ad Set Budgets
1. No Advertisement Scheduling
One of the biggest disadvantages of ad set daily budgets is the absence of ad scheduling. What that means is that your Facebook advertisements will run round the clock each day of the week. If you want campaigns only active during particular times of day or periods of the week, it is in your best interests to not pick ad set daily budgets.
2. Daily Spending can Considerably Fluctuate for Lifetime Budgets.
The daily spend can drastically fluctuate at times if you go for lifetime ad set budgets. It can be challenging to know what coverage kind you will get on any particular day or what your advertisement spend will be. Hence, if you regularly expect to modify your budget, it is best to go for daily budgets.
3. Can Be More Time-Consuming
Unfortunately, ad set budgets and manual bidding can be a lot more time-consuming, which is why people often focus on automating their paid social strategy.
4. Less Effective Over-Time
We’d recommend using ad set budget optimization in the initial test stages of your campaign. However, you should eventually move to a CBO campaign once you find your winning ad sets and ads. Allow Facebook to optimise your campaign budgets.
Step by Step Guide: Setting up Ad Set Budgets
Read the following for instructions about setting your bid strategy and campaign budget:
- Navigate to Ads Manager
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- To create a new campaign, visit Ads Manager. Alternately, from the drop-down menu in your account, you can click on “Manage Ads.”
- After you are in Ads Manager, you can easily navigate with the menu present on the page’s left-hand side.
- To begin with, your advertisement, press the blue button situated on the page’s top right corner. Then you have to choose your campaign objectives and target audience.
- Set Daily or Lifetime Budget
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- After choosing your target audience, the next step is to select how much you would like to spend on your advertisement. When you set an ad set budget, you must keep in mind that this figure indicates the maximum amount of cash you would like to spend.
- You may also set your ad set budgets budget to lifetime or daily.
Lifetime vs Daily Budget
Lifetime budget option: This budget is the maximum amount of money that you will be spending during your advert set’s lifetime. Go for a lifetime budget if you are seeking to run your advertisement for a particular period. What that means is that Facebook will be pacing your spending over the specified period that you set for the advertisement to run.
Daily budget option: A daily budget, on the other hand, is the average amount that you will be spending each day. Bear in mind that the lowest daily budget for an advertisement set is 80p and has to be twice your cost per click at least.
You can select a daily or lifetime budget from the drop-down menu, as shown in the image above.
- Setting advanced budgeting options.
Also, to further specify your ad budgeting, head to advanced options – you can see this option in the image above. This particular section enables you to specify some things, such as the ad schedule. To further specify your budgeting, turn to the advanced options — this option is linked at the bottom of the screenshot shown above. This section allows you to specify a few things, such as the ad schedule. Here, you can select whether you would like your ad campaign to run continuously and immediately or if you would like to customize the end and start dates of the advertisement. Moreover, you can set parameters so that your advertisements run only during particular days and hours of the week.
When Maybe a Good or Bad Time to Use Both?
One of the best times to utilise CBO is for testing ad sets that are all set to scale. Once you have run several tests and figured out your top-performing Facebook advertisement sets, and ads place them in your CBO campaign. This has proven to be a very effective strategy for the world’s most successful marketers, including our team at Surge Pilot.
On the flip side, there are certain times when it is not wise to use CBO. For instance, Campaign Budget Optimization might not function in your particular ad campaign strategy if your business or company has stringent budgets separated by submarkets, markets, or regions.
As Campaign Budget Optimization generally favors audiences with a bigger approximation of Facebook reach, it might assign your advertising budget in a manner that clashes with your regional budget restrictions. CBO campaigns function best when there is ample flexibility in audiences and spend.
Wrapping it Up
We have observed ongoing success from both Facebook Ad Set Optimization and Campaign Budget Optimization campaigns. We recommend starting with ad set budgeting, before moving on to more targeted audiences based on the proven data you’ve collected. Use CBO’s to help scale further.
Notwithstanding these mixed results, Facebook announced that Campaign Budget Optimization would soon become the only ad budgeting option. However, this is still yet to happen and we suspect, and hope that Facebook may change their mind on this decision!
Thanks for reading this article. We hope you’ve enjoyed reading this full guide and are now in the position to select the right ad budget optimisation strategy for you.
The Surge Pilot team | Accelerate Brand Growth with Paid Social, today.
