September 2019 Launch Pushed Back To February 2020
Last year I wrote about the impending launch of Facebook’s Campaign Budget Optimisation (CBO), which was scheduled to begin rolling out for all in September 2019.
Launched initially as an optional budgeting tool in 2017, the feature supposedly helps give businesses an easier way to manage their ad budgets and ensure optimal results.
The September mandatory launch was announced at the start of 2019 giving organisations six months’ notice to shift their campaigns over.
Naturally, almost everyone ignored this timeline so Facebook ended up pushing it back to February 2020.
At the moment, for some advertsiers, the feature is still optional, but eventually, it will b a must use for all.
The idea behind CBO is, in principle, a good one, to help marketers drive more outcomes for less money. However, in practice, it requires much testing to get the best out of it.
At SMK's upcoming Social Media Strategy + Facebook, Instagram and LinkedIn Advertising Masterclass we will be exploring how to get the best out of CBO, alongside all the key social media optimisations for 2020.
How Do Facebook & Instagram Campaigns Normally Work?
To help explain how the feature functions, it is handy to have a quick recap on how Facebook ads have historically been structured.
For the unfamiliar, there are three levels in a Facebook ad campaign:
- Ad set
At different levels, different decisions occur. Budgeting is something which has historically taken place at the Ad Set level, but with CBO, it has shifted up to the Campaign level.
The purpose is that when targeting multiple audiences, Facebook’s machine learning will automatically redistribute budgets to the best performing audience in a campaign.
Rather than arbitrarily budgeting for an audience, even if they are duds.
How Does CBO Work?
In the Facebook graphic above, you can visualise how the CBO feature works. Without it, budget is evenly distributed among the three ad sets, even to the underperforming ones.
When using CBO, Facebook allocates more budget to the ad set that’s getting the most conversions to produce even better results.
Generating a higher number of conversions at a lower cost per conversion, boosting return on investment.
CBO applies to all campaign objectives within Facebook, not just conversions. Therefore, for those running traffic or video views campaigns, if done well, they should expect more outcomes per dollar spent.
It is not hard to imagine how and why CBO could and should be beneficial for businesses.
You should end up getting more outcomes for your budget, and it removes the need to overthink budgeting. Something which has obvious appeal for entry-level users.
Facebook CBO Reducing Audience Overlap
Even for more advanced Facebook marketers, there are less apparent pluses, since using CBO reduces “Audience Overlap”, further improving campaign performance.
Audience overlap occurs when you are targeting users in multiple ad sets or campaigns.
Having overlapping audiences is not necessarily a disaster, but it can lead to poor delivery of your ad sets.
When ad sets from the same advertiser are going to end up in the same auction (meaning they're targeting similar audiences), Facebook enters the one with the best performance history and prevent the others from competing to get shown.
It does this so that your ads are not competing against each other, which can drive up costs and lead to inefficient uses of your budget.
Since Facebook’s machine learning knows who is in what auctions, using CBO it can spread the love around to reduce the probability of overlap, without sacrificing performance.
Facebook CBO Starving Good Audiences
However, depending on how Facebook and Instagram campaigns are currently structured CBO can lead to significant drops in performance, with Facebook inadvertently starving good audiences, while over-investing in lesser qualified audiences.
Let me explain, Facebook ad sets composed up of large audience cohorts tend to nowadays be cheaper to reach, with a lower cost per impression (CPM), especially when compared to smaller cohorts.
For example, for SMK its delivery costs to reach people interested in marketing would generally be much cheaper than reaching the 30,000 people in its database (via Custom Audiences). Despite the fact, the latter is much better qualified.
Therefore, if both of these audiences were in ad sets within the same campaign, the database cohort would most likely get starved of budget via CBO.
Resultantly, the database cohort would be unlikely to make it out of Facebook’s Ad “Learning Phase”, and therefore either not run at all, or potentially run, but at a much higher price premium than necessary.
At SMK’s upcoming Social Media Strategy + Facebook, Instagram and LinkedIn Advertising Masterclass we will be examining the impact of CBO, how to make it work for your business and much, more more.
SMK will be exploring the latest opportunities, systems, processes and features for optimal social media marketing in 2020. Expanding upon the key feature launches across all major platforms from the past six to twelve months.
Courses run through March and April, with earlybird rates available, alongside not for profit discounts and group bookings discounts. It is also possible to tailor this course to your needs as part of an In-house Training program.