Back in 2017, Facebook announced a new way of managing your advertising budgets with Campaign Budget Optimization (CBO).
This new feature that helps you redistribute the budget to the best performing campaigns can completely change your business performance.
Still, not everyone knows how to do it, and many people think that Facebook messed it all up.
Ecommerce and Dropshipping merchants who use Facebook Ads as their core advertising channel know that their success quite depends on Facebook.
There is a bunch of agencies having problems every day and losing a lot of clients because of the Ad Sets that are constantly crashing.
On top of that, the new iOS14 update is causing a lot of problems for advertisers and negatively affecting their campaigns in many ways.
By the last news, only 13% of Apple worldwide users with iOS 14.5 have opted in so far.
All these problems and changes may get you discouraged, especially if you're at the beginning.
You're probably wondering is it worth all that stress you get every day, especially now with these iOS changes.
Don't worry, not everything is bad as it seems.
You can fix your Facebook Ads and make your business more profitable, and we'll show you how to do it.
In this article, we'll cover:
- What is CBO, and how it works
- How it changes your campaign structure
- How to run successful Campaign budget optimization Ads
- How to survive the IOS 14.5 update and the global crash of Fb Ads
So if you're ready to launch your 2.0 campaigns, then let's begin!
Facebook Campaign Structure
You probably know that the Facebook campaign structure includes 3 main elements:
Campaigns - the highest level where you need to choose parameters, such as ad objective (traffic, engagement, conversion, etc).
The campaign level represents an organized effort towards a goal, and it refers to the collection of ads that we use to reach that goal.
Ad sets - the middle level with the set of ads where you need to set up their schedule, budgets, targeting, bidding, and placement.
You can create multiple ad sets under a single campaign.
This is where you set the budget for the 'old way' setting of the campaign, which is different from the new Campaign budget optimization. We'll get to this later.
Ads - the final step of the Facebook campaigns where advertisers are uploading the creative part of the ads that will be shown to the audience, such as photos, videos, copy, etc.
What is Campaign Budget Optimization and how it works?
Campaign Budget Optimization (CBO) is a new Facebook's feature that allows you to distribute the budget on the Campaign level across different ad sets to reach the best results.
By giving the best-performing ad sets more preference and injecting more budget into them, it helps you maximize the total value of your campaigns.
Yes, it makes this process a lot easier for you, but it also puts more decision-making power into Facebook's hands itself.
Campaign budget optimization works in real-time, determining the best performing ads, and it helps you lower your costs and increase ROAS(Return on ad spend).
Let's see how it works on a concrete example.
Usually, you set daily or lifetime budgets at the ad set level, right?
In the example above, Facebook will spend $20 on a daily basis, regardless of the performance of the ad.
In case you have a single campaign with three ad sets, and your budget is $30, you may assign it like this:
1. Ad Set 1: $10
2. Ad Set 2: $10
3. Ad Set 3: $10
In this example, an advertiser spends $30 to get 10 conversions without campaign budget optimization.
Using campaign budget optimization, you would set a $30 daily budget first for the whole campaign.
Then Facebook starts allocating that budget to provide the best results, based on the performance of each ad set.
But with it, Facebook can allocate more of the budget to the second or highest performing ad set.
In case you set a daily campaign budget, you may spend more or less than that amount, but on average, it will strive to that daily budget.
Like this for example:
1. Ad Set 1: $7
2. Ad Set 2: $18
3. Ad Set 3: $5
In that case, the campaign may result in 15 conversions.
This process is similar to how Facebook allocates the budget between multiple ads within a single ad set.
Only this time, we have ad sets budgets distributing within a campaign.
Here's a visual example from Facebook:
Note: Facebook campaign budget optimization doesn't find a winner ad set and distributes all of your budgets to a single one.
What it does is that it simply allocates more or less budget based on ad performance in comparison to the others.
Difference between Conversion Optimization and Campaign Budget Optimization?
Facebook has built Conversion Optimization to improve ad delivery and show ads to the best audience based on recent conversions.
This Facebook's feature is based on the learning process and it all happens at the ad set level.
On the other side, campaign budget optimization is different as it considers to what audience to distribute the most budget to, rather than whom to display the ad to within each audience.
There is some overlap because large budget shifts can reset the learning phase, and Campaign Budget Optimization is helping to avoid this, and it happens on the campaign level.
How To Start Running CBO Facebook Ads?
To create a CBO Facebook ads campaign, go to your Facebook Business Manager, create a new campaign and turn ON the Campaign Budget Optimization mode.
Define the campaign budget, whether it is daily or lifetime.
When you finish with the ad sets and ads, click on Save Draft.
In the next step, you get to choose your bid strategy between the following options:
- Lowest cost
- Target cost
- Cost cap
- Bid cap
We recommend you begin with the "Lowest cost" and you can experiment with other bidding strategies when scaling the campaign.
Choose your target audience, the location and demographic parameters, and ad optimization as Conversions.
Create your ads by importing the creative, choosing the format, copy, headline, and all the other fields.
After finishing with your first CBO campaign, it is time to get back to the ad set level, duplicate it and create another test ad set for reaching better results.
Advantages of the CBO
CBO is a great feature that is shared and expanded all over the world, and here's what they see there as its advantages:
- Zero time managing budgets while lowering CPA.
- CBO saves you the time in case you don't want to micromanage all the time-consuming campaign optimizations.
- Decisions are made off on future outcomes.
- Facebook has a super-smart machine learning that predicts its users' behavior based on multiple interactions with hundreds of other business accounts.
While individual advertisers can only decide based on past data, Facebook's algorithm has the power to predict future interactions and bring you more conversions at a lower cost.
Shortcomings of the CBO
Requires a bit of Facebook pixel data
To start making good conclusions, the Facebook algorithm needs some data which will be used for those conclusions.
It is much complicated for Facebook to bring the best results in case your website had only a few store visitors or purchases completed yet.
The more triggered your Facebook Pixel is, the more data there is to use, and the more chances there are for successful optimization of your Facebook Business Manager account.
Less control and requires trust in Facebook
The advertisers don't have any control in terms of budget allocation and distribution on the ad set level when using CBO, entrusting Facebook to dispose of their campaign budgets in their best interest.
Facebook is aware of their competition, such as Snapchat and TikTok, so to stay competitive platform, their actions have to be guided by the advertiser's best interest.
Campaign Budget Optimization Best Practices
These CBO practices can be great for those who are just starting with it for the first time and for those who are not super tight on budgets.
You should duplicate your best performing ad set from a campaign with LAA (LookAlike audiences) or interest settings into a new campaign.
Then create a new audience that is much broader than the initial one - set as broader as possible age, gender, and geolocation parameters in line with your user persona.
This structure will allow you to take advantage of the full scope of Facebook's CBO feature.
It will allow the algorithm to acquire the required minimum of 50 conversions per week quickly and start filtering the data for the best match at the lowest CPA.
Low on budgets?
Pixel might sometimes be pretty expensive to train, we agree. In case you don't have budgets for Pixel education, then throwing your top-performing ad sets into a single campaign might be a great option.
The only thing is that it shouldn't be much different in terms of targeting to not confuse the system.
This method is also useful for scaling your campaigns.
Implement changes only to a duplicated campaigns.
In case you want to double your budget, then make a copy of the campaign and double your budget.
Want to change the targeting?
Duplicate the campaign first, and then change the targeting.
Doing that will allow you to reverse any changes.
Note: Pixel needs a bit of time and new learning after you have implemented significant changes.
Once the new campaign starts performing better than the old one, you can always switch off the old campaign.
Mind your segmentation
You should make sure that the ad sets within a single campaign are not entirely different so that FB.
By having incomparable and such different ad sets, you'll just confuse the system, and it will result in unreliable outcomes. It's just a wasting of budget.
Strategy before Tactics
Keeping in mind that strategy is half of the campaign, make sure to plan out why you need each of your campaigns, ad sets, and ads.
Break down your goal into smaller steps, and know exactly how each of the creatives will help the ad achieve the goal of the ad set, which in general helps the campaign achievement.
The importance of the Right Ad Objective
Maybe it seems basic, but it is so important to choose the ad objective that corresponds with your campaign, strategy, and tactics.
There is a huge reason for this - the Facebook algorithm only does what you tell it to do. So it's good to pay attention to your orders and conversions.
A lot of advertisers are making this huge mistake.
Start with a "Lowest Cost" Strategy
Make sure to use a proven bidding strategy before you start with more advanced and riskier campaigns.
"Lowest cost bid cap" and "Target cost" sort of campaigns require some skills for the advertiser as well as the Pixel. So it's smart to stay on the safe side at the beginning.
Did you know that Facebook requires at least 50 triggered Facebook Pixel events to end its basic learning phase?
Using the CBO feature, once you're sure that the campaign and its ad sets and ads are perfectly set, it needs no more revisiting but can be left with the Facebook algorithm.
Also, many changes such as change of creatives, targeting, pausing of the campaign will trigger a new learning phase, and it can mess your previous settings in case you don't duplicate the campaign.
How to survive the IOS 14.5 update and the global crash of Fb Ads?
The new iOS 14.5 update launched by Apple in April brought the most controversial change for Facebook users asking for their permission whether they want their activity to be tracked or no.
According to Flurry, who has 5.3 million global iOS 14.5 Apple users, and only 5% of US users opted in, which caused a lot of disagreements from Facebook’s side.
On the other side, when it comes to crisis for Facebook, all this affects advertisers on this platform, including you.
There are some things that you can do to combat these changes, but there is nothing you can do to avoid these prompts.
What you need to do for sure is to adapt your Facebook campaign strategies for the Apple mobile users in order to reduce the damage of your campaigns.
Here's how you to get started with it:
Verify Your Website Domain
Facebook is encouraging all the advertisers to verify their website domains.
This step is not required yet, but it's likely that it will become soon.
Maybe this won't affect the ios14 prompt showing on Apple devices, but verifying your website will help you create more integrity about Facebook's data collection processes.
You can check the domain verification process here.
Exclude iOS Devices
Facebook's audience targeting options are vast, and you have the option to exclude targetting iOS mobile devices.
To do this, go to the option 'Placements' at the 'ad set' level, and at the bottom of the section, click 'Show More Options.'
Click on the dropdown menu and choose to target Android devices only.
By excluding iOS users, it will reduce the size of your audience, but you can continue to track everything that happens with your ads, including conversions, which allows Facebook to optimize the performance of your active campaigns.
Change Your Conversion and Retargeting Strategy
The main problem that the iOS14 update brings to small and medium eCommerce businesses is its impact on the conversion objective.
So, instead of using the Conversion objective on a typical landing page, you can drive visitors to a page where you can offer something valuable in exchange for users' contact details.
Maybe this sounds like a typical lead generation campaign to you, but it doesn't have to be that way. For example, you can offer a product discount coupon on your pre-landing pages.
Using these contact details, you can segment and tag your audience in your CRM as buyers and non-buyers, and you can create custom audiences of your non-buying audience in order to retarget them.
Yes, it's a bit more complex, but the essence is the same.
You can also use contact details to create email campaigns or funnel to convert these non-buying contacts into customers.
Change the Ads objective
If your Facebook ad aims to generate qualified leads, what's great is that you can still do it. All you have to do is to move the location of your lead capture forms and your campaign a bit.
Facebook's lead generation objective will become even more popular after the iOS 14 update.
This kind of Facebook ad campaign objective will allow you to capture leads within Facebook, meaning that your targeted audience will not have to exit the app, and therefore, won't see the iOS 14 update prompt.
This campaign objective also allows you to customize your Facebook-hosted landing page for your needs.
Keep on what you're doing
The truth is, nobody really knows how exactly these changes will affect Facebook advertisers, and the prompt may even not make that much difference to your current performance.
And, as serious as Facebook is about these changes, it's likely that they'll do more of that to protect their advertisers (the main source of their revenue) from further damage.
Watch this space.
Rethink your Facebook ads strategy
The things you should keep in your mind:
- Cross-check your conversions over different channels
- Focus only on the metrics/events you can trust.
- Explore new possibilities & experiment with different set-ups
- Put emphasis on your CRM data, and adopt one if you don't have it already.
- Put effort into email lead generation and build your own audience.
- Using automated rules, make sure that you adjust it based on the attribution models changes.
Incrase AOV with the right tools
One of the greatest opportunities to overcome the iOS14 update is to increase your AOV using some of the tools for it, so your campaigns will be more successful.
And not only that, you’ll have a better segmented and high-quality audience that converted, so you can create better campaigns in the future.
Inline is a better-converting, frictionless conversion tool that will keep you and your customers’ purchasing safe and will help you increase your AOV drastically.
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