What is Campaign Budget Optimization (CBO) and 4 Effective Strategies to Test

By: Nick Appalucio | Media Manager

“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.” – Abraham Lincoln

In a recent Facebook product release, all advertisers will be required to switch over to Campaign Budget Optimization (CBO) starting in September.

What is CBO? CBO is when multiple ad sets are placed under one overarching campaign with a ‘Campaign Budget’. Budgets are not located at the ad set level with this feature (like the current method). Instead, your campaign has a total budget and Facebook will allocate your spend to certain ad sets that their algorithm believes will perform best. It’s a way for Facebook to more effectively spend advertisers budgets based on algorithmic signals instead of manual optimization.

I know plenty of people who love the control of ad set budgets are going to be dissatisfied with this change, but this is Facebook’s world and when they make changes, there is usually an outcry, and then eventually everyone realizes that it isn’t worth the angst. It’s better to be prepared for this change and learn how to effectively use it now, compared to learning on the fly when September inevitably rolls around faster than you expected it to.

Here are four strategies we have found effective for CBO that you can implement today! (Hint: one of them is very similar to ad set budgets).

1) The 10×2 Method

‘The 10×2 Method’  involves taking your top 5 audiences and put them into a CBO campaign with a daily campaign budget of 10x CPA goal. You then should add minimum spend caps of 2x your CPA goal to each of the 5 ad sets. What this will do is make it so every ad set gets enough spend to prove out if they will be profitable or not. After 2 days of running this, we will go back and view data and pause any ad sets that were not profitable. This will force our Campaign to allocate more spend towards profitable ad sets.

2) The Hard Stop

What we do with ‘The Hard Stop Method’ is we will use the same strategy as the 10x/2x campaign except we will add Bid Caps to every ad set that are 10% lower than your goal. We find with ‘The Hard Stop Method’ strategy that your full budget is not spent everyday, however you achieve profitable results. As an example, we had one CBO campaign using this strategy with a $5,000 daily campaign budget. On Sunday, it spent $5,000 profitably. The very next day, campaign performance tapered off and only spent $900. Here we have proof that when the right traffic wasn’t available on a given day, Facebook didn’t take the opportunity to waste our budget like most people think they would. This is a great way to mitigate some risk that you have going on with other tests you are running.

**3) The Bullseye Method **

Sometimes, certain ad sets require full attention and a full budget dedicated to themselves. We simply just treat campaigns as ad sets with ‘The Bullseye Method’, as we can pinpoint the exact budget we are looking to spend on a given day. The set up would be one ad set per campaign and set a daily budget similar to the way we would set an ad set budget. While this will create many campaigns, this format replicates the setup of current ad sets in that you can have a budget per target. This strategy primarily works best with retargeting ad sets, as well as specific ad sets that you want to ensure get spend (for various reasons).

**4) The Cobra Method **

This strategy is one of our top CBO scaling methods. With ‘The Cobra Method’ we take our top performing audience and duplicate it five times within a given CBO campaign. Just like snakes, ad sets (even top performing ad sets) can sometimes build up negative history, and by cloning it can shed its skin and start fresh and be even stronger. This also allows us to fish for a different audience from the same target pool. If you imagine a pond as your target audience, one ad set would be the same as throwing one rock in the pond and its resulting ripple. With five duplicates, this is like throwing five rocks in different areas of the pond, generating five different ripples (mostly unique audiences).

We then set the daily campaign budget to 20x our CPA and then launch. After an ad set is proven out, we find this method takes our audiences, budgets, and CPA’s to the next level.

These are just four of the many ways the media buyers at Jump 450 are preparing themselves for Facebook’s change to CBO coming up in September. Don’t get blindsided in September and start implementing and testing CBO strategies today!