Social Media

Facebook Expands Its Budget Auto-Optimization Tool

Last week, Facebook announced that it will begin to broadly roll out its budget auto-optimization tool, Campaign Budget Optimization (CBO), as the future way of setting up all campaigns across all of Facebook’s family of apps and services, including but not limited to Facebook and Instagram. Beginning in September, budget settings will live solely at the campaign level, allowing the delivery system to automatically and continuously distribute your budget in real-time to advertisers’ top performing ad sets. This update is designed to help effectively and efficiently manage and maximize performance for campaigns.

The Background on CBO

In the current set-up, budgets live at both the campaign and ad set levels. The campaign level holds the overall designated amount or spend limit, while the ad set level allows for the splitting of budgets between target audiences. Currently, advertisers must carve a specific amount against their ad sets – primarily based on historical performance, audience size or estimated scalability. Once the campaign starts, advertisers will begin to make budget optimizations between the ad sets. To help combat some of these manual levers, Facebook rolled out an alpha product in Q2 of 2017 known as Budget Liquidity, which then became the Campaign Budget Optimization tool.

What’s Changing for Advertisers

The CBO tool is designed to automatically shift budget to the top-performing ad set – primarily distinguished by target audience. Based on the campaign objective and optimization method, Facebook’s machine learning will then determine which ad set is driving the most efficient performance at scale. So simply put, the update will help advertisers continuously distribute budget to top performing ad sets in real-time, taking guess work out of initial set up and help determine the best daily optimizations. 

There will continue to be a spend limit functionality for advertisers  requiring specific budgets by audience as well as a maximum spend limit to tell the delivery system to not exceed that threshold.

This tool follows suit to some of Facebook’s other machine learning best practices including placement optimization and creative asset optimizations – allowing Facebook to effectively scale your budget and find users where they are, when they’re most present.

The Impact on Performance

This new functionality should effectively lower advertisers’ total cost per result, for an overall campaign.

Therefore, most notable callout is that results should be viewed at the overall campaign level when understanding performance between the ad sets. Facebook will maximize your budget for the lowest cost per outcome, systematically avoiding more expensive outcomes, until all lower cost ones have been captured. 

Facebook explains this really well in a recent article called “The Breakdown Effect”.  In the example, the company explains why despite seeing a “more efficient” cost per acquisition in Facebook Stories, it was not as scalable and would become more expensive within the early days of the campaign when compared to Instagram Stories. However, at the all up level, the campaign maximized the total budget to drive more results, at a more efficient cost.

What we’re doing at iProspect

Understanding CBO’s impact on performance will really depend on testing, so iProspect teams will be partnering with our clients on setting up Test and Learn Measurement plans to ensure they’ll be set up for success when the larger CBO roll-out takes place in September. Fifty percent of iProspect’s current social clients – that percent making up the majority of our clients where budgeting limitations and frequency caps don’t preclude its use -- are already utilizing CBO on their campaigns. We anticipate that number to continue to grow over the next few month.

To date, iProspect has begun to test this on a few client accounts already, with one seeing a notable 19% improvement in CPA. We’ll circle back in the Fall once the roll-out is complete with our initial thoughts on this expanded CBO tool.