Facebook’s Campaign Bid Optimization (CBO) or How I learned to stop worrying and love CBO.

For experienced Facebook advertisers, the structure of your account and campaign build creates the foundation of your campaigns. This helps you determine your testing protocol and your optimization structure. Later this year Facebook is planning to make Campaign Bid Optimization (CBO) campaigns mandatory.

What is CBO? What does this mean for you?

Prior to Campaign Bid Optimization (CBO), Facebook ad budgets were determined at the Ad Set level, meaning that no matter how effective or ineffective your Ad Set was, your Ad Set would spend its budget and you the advertiser would have to make manual adjustments to the Ad Set to optimize based on performance. With Campaign Bid Optimization (CBO), the ad budget is determined at the Campaign level and distributed to Ad Sets on a daily basis based on performance. This change also removes lifetime budgets from Ad Set control. If Ad Set 2 is performing better than others, it will receive the lion’s share (up to 90% in some cases) of the budget. The other Ad Set budgets in the Campaign will decrease if and when their performance declines. On paper it sounds like a great thing, but is it?

How do you set it up?

Creating a CBO campaign from scratch is similar to creating a traditional campaign.

Select create → then your objective → and once you’ve named your campaign using proper naming conventions → toggle on Campaign Bid Optimization ad → then click continue and you’re in CBO business. The campaign budget will override any ad set budget and Facebook’s algorithm will optimize your spend daily for better or worse.

If you have an existing campaign, you can turn it into a CBO pretty easily assuming you are not running multiple bid caps within your campaign. Go to the campaign you’d like to switch → select edit → then Try Campaign Bid Optimization → set your daily budget and you are done. One note on budget setting, we have experienced performance dips with CBO campaigns when the daily budget exceeds $2,000 per day. We assume this is a short term issue with the algorithm and expect it to be corrected soon, but for now, we keep our campaigns at $2k or below.

Is CBO a good thing? Well, that depends. Are you an individual or small business owner with little time to manage your Facebook campaigns? Then, Yes. Facebook’s ad platform is designed to be easily accessible and CBO is definitely another step in that direction. However, for experienced agencies like Round Barn Labs, it can cause more obstacles than benefits. This change is all about control, and as with most changes Facebook makes it puts the control on their side, which can rub experienced performance marketers the the wrong way. We like control. We have tested it and had mixed results on overall performance. The major issues we’ve encountered have to do with accurate testing and optimizing beyond a single metric in a single moment. Facebook’s algorithm is notorious for determining which ad, or in this case, which audience is performing better and quickly shifting budget in that direction, sometimes to the detriment of overall performance. This type of behavior by the algorithm has been the bane of creative testing for years. These issues are exacerbated for campaigns that are optimizing toward a higher funnel objective that correlates to a lower funnel “North Star Metric” but is not directly linked. We are working on our own methods to ensure that our tests continue to provide accurate results and that important variables like spend are isolated so we are ready for the September switch. Some of the tools we are utilizing are Ad Set minimum and maximum spend limits which help control the always important variable of spend.

Here are some of the overall benefits we expect from Campaign Bid Optimization (CBO) implementation:

• Less audience overlap but forcing budget away to similar audiences. Typically in an optimization scenario, there are only one or two winners.
• Audience optimization based on real-time events. Holidays or seasonality lend themselves better to certain audiences.
• Less wasted spend. Allowing Facebook to self-run its own best practices for you.
• More inventory. Or, more inventory? We don’t know if this will prevent advertisers from misusing the platform and running fewer ads to the same budget simultaneously. This plays into…
• Lower delivery costs for the ad community. Ultimately a world where optimization is coming from the top down allows Facebook to control its efficiencies better and (hopefully) benefit ad campaigns as a result.

There are inherent negatives associated with some of these benefits but as a whole, it should improve overall performance. The only constant in growth and digital marketing is change. As a result, updates like CBO are just like another day at the office. Facebook’s main goal is to balance the needs and wants of their users with those of their advertisers and they feel that CBO campaigns are another step in that direction.

So when is this a done deal?

According to Facebook, CBO campaigns will be rolled out in September of 2019. We recommend testing with it now so you are ready when the change happens. Our advice, try it for yourself and see how it works for your business.

Additional Sources:

https://socialfiremedia.com/facebook-campaign-budget-optimization-cbo-will-be-mandatory/

https://adespresso.com/blog/facebook-campaign-budget-optimization/

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