The 9-Part Campaign Budget Optimization Transition Guide for Facebook Ads

Note: the PDF version of this guide is available further down.

In 2017 Facebook announced Campaign Budget Optimization (CBO) as a new option for managing budgets. In 2019 they announced it would become mandatory and in 2020, well, it’s here to take over.

I transitioned to fully CBO early 2019, before Facebook made the announcement, because the results were both more stable and consistent.

Stable results means less yoyo performance and consistent means the campaigns were lasting longer requiring fewer daily tweaks.

This meant my team and I could focus more on marketing our products and services and therefore spend more more doing the things that actually bring about lower costs and higher returns.

If this sounds like a silver bullet, it’s not. I wrote a whole step by step training program on getting the best out of CBO and it takes more than simply setting budgets at campaign level.

This guide right here is intended to support those yet to transition fully to CBO to follow my advice on how we tackle this challenge with clients (because ALL of our own ad accounts are fully CBO, by choice). I am assuming you understand Facebook marketing and have run ads in order to understand this guide.

Making CBO Work

CBO allows you to set budgets at campaign level, as opposed to ad set level.

But it goes way beyond that with an algorithm that thrives on data and simply makes better and faster decisions overall than you and I.

CBO removes some elements of audience overlap.

CBO holds history and learnings at the campaign level.

CBO makes daily decisions based on the auction, which we can’t see.

CBO likes recent data, and lots of it.

CBO also uses clever programming to find you cheaper and higher quality users – BUT!

You need a good product, to have good targeting, good ads and a good sales funnel.

Sounds simple but many are still overlooking this most basic requirement.

But let’s say you’re running ads already using Ad Set Budgets (we’ll call this Adset Budget Optimisation, or ABO).

How do you make that transition to CBO? Let’s jump right in.

Part 1. The Transition Phase

Details from Facebook are either very good or very bad.  There’s no consistency. But with CBO, despite lots of early information and advice, in the last 6-12 months it has all gone quiet.

I’ve tried to lead the way but with only a tiny percentage of the 7 million advertisers that I can reach (and the few thousand students that have taken my CBO Test, Optimise, Scale training program) I am yet to reach a decent number that need this.

You’re here and I hope this guide gives you the next stage in developing better consistency and performance in your campaigns.

Here’s what we know so far about the transition phase:

a) Some ad accounts are already CBO only – I own a few of these. That means that there is no option at the ad set level to set budgets and when creating a campaign, you are forced to enter a budget. I’m 100% ok with this as I love CBO and it had no impact when this happened, back in September 2019 when the first roll outs occurred.

b) The rule in place for September 2019 seemed to be that ad accounts that ran majority of campaigns with CBO 56 days prior to September would be transitioned.

c) Those that weren’t were on hold until February 2020 which was the official next wave of CBO rollout (which at time of writing, is where we’re at).

d) The message from my rep I recently received is below. I’ll explain some of the transition points further down:

This is a reminder that the eligible ad accounts (please send me specific ad account ID’s if you’d like to me check if they fall within this) will be migrating to using campaign budget optimization exclusively beginning on February 27, 2020. Please note that any new ad accounts created after January 30, 2020 might also be eligible to be migrated. You will receive a notification in Ads Manager indicating if those new ad accounts are impacted as well. If you are unsure, please send any new ad account IDs to us and we can confirm.

With this change, we’ll be moving budget settings to the campaign level, rather than at the ad set level. This feature allows our system to automatically and continuously distribute the campaign’s budget in real-time to your top performing ad sets.

Here’s what you need to know about your account’s migration to campaign budgets:

> New campaigns must use campaign budgets.
> You won’t have the option to switch to ad set budgets when creating new campaigns.
> Edits to existing campaigns with ad set budgets will be limited. You can’t add new ad sets or extend how long they’re scheduled to run, but you can unpause existing ad sets and increase their budgets.

This update is part of an ongoing effort to help you efficiently manage and maximize value from your campaigns. Overall, we have seen advertisers using campaign budget optimization benefit from lower costs per results for their campaigns, while freeing up time to plan future campaigns and focus on other areas of their business.

e) the next wave of rollout occurs 27th February, so mark the date and be ready

f) If you have not yet received the notification in ads manager, then you’re either in the next wave or are already 100% CBO.

g) If you have a Facebook rep or partner manager they can confirm the status of your ad accounts for you and the likelihood of the transition impacting your account

h) If you created your ad account from February 2020 onwards then chances are you’re on CBO only anyway

i) An entire batch of Facebook marketers will grow up only ever knowing CBO. Makes you feel old hey? Wait until you talk about ‘in my day we set budgets at ad set level…’ – I digress.

j) If your account has not yet been transitioned, in summary, Facebook will place a penalty on your ABOs. For example a campaign with ABOs is not allowed to have new ad sets added. So whilst you can still unpause existing ad sets and increase budgets they’ll be limited other things.

k) If you use an API (i.e. like 3rd party software that manages  ads) then the CBO migration kicks in much later in 2020

l) Facebook plan to have ALL ad accounts migrated by 2021 and most advertiser accounts migrated in the earlier part of 2020

So now you understand the transition, let’s talk about your actual transition.

Part 2. From Ad Set Budgets to CBO

Let’s get this question answered first: “Can I simply create one ad set per campaign and mimic the ad set budget setup by creating lots of new campaigns?”.

You can but you shouldn’t. The CBO algorithm is expecting more ad sets in order to create better decisions.

We tested it and it’s 100% true – how? We ran a single ad set CBO with 3 ads for 5-6 days with a CPA result of around $40 vs a target of $30.

We ran the same with a CBO campaign but to prove this worked, we simply copied the same ad set including the ads, into the campaign 3 times.

The results are below.

What’s interesting is that Facebook actually did what they said it would do and moved budgets to the better performing ad set.

In both cases we didn’t edit anything and over time the average $35 CPA would continue to drop as Facebook chases cheaper conversions.

Few pointers on the transition:

  • Going from ABO to CBO by creating single ad sets per campaign is not the way to go. I’ve heard a few people have success but considering the example above, CBO works better with more ad sets. In the case above of simply copying one ad set 3 times we’re giving CBO more chance of success to support the learning phase. In most cases we’re running different audiences within a single CBO
  • ABOs do in many cases perform BETTER than CBOs in the short-term. The advice right here is not me trying to convince you CBO is better, I’m trying to get you ready for Facebook forcing it on you. If your ABO is performing well it means you’ve put the right inputs in such as a good product or service, good targeting, good audience and good funnel. You then, are in a strong position to migrate over and I’ll cover this later below
  • ABOs work well because of the fact you can control them far better. So if you’re an advanced advertiser chances are you may initially get frustrated with CBO. This is why it took me more than 6 months to be convinced because my ad accounts ran lots of rules and automations and I’d be checking in frequently, making changes etc to get the best performance I could. With CBO I spend WAY less time in ads manager and over time its created more stability. For you, as the advanced marketer, it will be frustrating but you’ll learn to love CBO too. I think.


Part 3: Moving Good ABO Campaigns to CBO

You have a good or great ad account right now and you don’t want to mess this up by even thinking about CBO. Well, at some point you’ll have no choice so why not start now?

I created what I call ‘The Advertising Core-4″  (AC-4) as a way of identifying the 4 main things that make any advertising platform tick:

  3. OFFER

If your ad account is performing well (which is not just the business KPIs like ROAS, CPA, CPR) but I’m talking also about monthly page satisfaction score and ad level engagement then you’ve probably got all 4 of those in a strong position.

For you then, moving to CBO is going to be way easier. Here’s what you need to know:

a) There is a chance your current strategy WON’T work. Especially for those that create multiple small spend ad sets, like 50-100+ and use rules and hacks to try generate sales and scale. Facebook, I believe, keep an eye on hacks and tweak the system to make them less effective. There are certain strategies like this that don’t work as well with CBO so keep this in mind. Oh the solution? Focus more on a great product that people want, really get to understand who your customer is and their pain-points, build offers (propositions) that bring them into your funnel and convert them. That’s as simple as The AC-4 really is. Don’t over complicate things.

b) if your AC-4 is primed then you can select a high or low risk option below to transition your good performing campaigns over

c) I would focus on the low-risk option depending on how much time you have left to transition.

Part 4: Moving Bad ABOs to CBO

Let’s get straight to the point on this. If you ad account, campaigns and ad sets are not performing well right now then moving to CBO is not going to magically fix performance.

Your goal is to go back into testing to find ads and audiences that work together. Whilst that’s out of scope for this it does make it easier to transition, since you’re not going to make things worse than they already are – I mean that in a good way, that you can transition and learn CBO faster!

For you I would recommend:

a) work harder on testing, which should happen regardless of using ABO or CBO

b) Start testing in CBO – set a campaign budget which is your test budget for each ad set grouped into a single budget.

c) Use the more aggressive switch over to CBO below.

Part 5: The Hard CBO Transition

Risk: HIGH!

With the hard CBO transition, you simply create duplicates of your ABO campaigns and set them as CBO’s reusing the same budgets, the same ad sets and ads that were already live.

Note: the original ABO will need to be paused in order to prevent overlap, thus it increases the risk of a performance drop whilst you move to CBO.

I only recommend doing this if your ABO campaign has been performing well consistently and you found your winning audiences and creatives already and have confidence in what you’re doing (because you’ve already studied CBO like The Ultimate CBO Cookbook!)

We applied this method on one of the lead generation ad accounts:

  • Target CPL of £3 which we consistently achieved.
  • We still had 3 campaigns  using ABO so we decided on a hard transition for all of them.
  • 2 of 3 campaigns maintained their CPL.
  • The other campaign saw a much bigger improvement in performance where CPL dropped by almost £1!
  • As our main KPI is cost per lead, we were able to quickly tell what’s working and what is not thus we ignored the higher risk.
  • For Ecommerce the longer funnel and time to purchase often mean you need to take more caution

Part 6: The Moderate CBO A/B Split Transition

Risk: Medium/Low

The goal of this transition is to create a duplicate campaign similar to the hard transition path with all the same settings, however, you would run it alongside the ABO campaign to maintain your ABO performance (assuming it’s already performing well) until your new CBO campaign is performing as well as ABO.

Eventually, you should aim to turn off your original ABO campaign which would likely result in further improvements since you are removing the overlap which is why this path is medium risk. But it’s also marked as potentially low risk because you’re trying to allow both ABO and CBO to run whilst you transition and build up performance for your new CBO campaigns.

In the example below we ran ABO and CBO for retargeting side by side with similar budgets and let them play out. We saw overall that the CPA on CBO over time performed much better. We couldn’t rule out that some users saw an ad in the ABO and then saw and converted from an ad in CBO but by this point our new CBO campaign was getting consistent results so we could switch the ABO campaign off and maintain good performance.

Part 7: The CBO Short-cut Transition

Risk level: Medium/Low

With this method, you would follow guidelines from CBO Cookbook training to create your new CBO campaign structures & apply our best practices to increase your chances of success.

This would mean properly planning a new CBO structure and following our step by step process on testing, phasing in audiences and ads that worked, and systemising your prospecting stage before you’re ready to scale. 

Even though our methods from the CBO Cookbook training are proven to be working (hence making this low risk in terms of setup), your performance still highly depends on your overall business (and specifically AC-4) thus it makes it a medium risk method too.

Part 8: When CBO Is Your Only Option

If you’re now at the stage where your ad account is CBO only, then really you’re only left with Part 5 or Part 7 above as your viable options.

If by now your ad account is exclusively CBO then The Ultimate CBO Cookbook is literally the fastest way of getting your ad account CBO super powered.

Part 9: Some Helpful CBO Tip

  • Whatever budget you have in place for your existing campaigns add those up and set that as your CBO budget. Copy the ad sets and ads over to the new CBO campaign. Beware though that your campaign/ad set has zero history at this stage, so whilst your previous ad sets may have performed well you need to warm up performance in this newly transitioned campaign
  • You can use MIN and MAX budgets for your ad sets to put some level of control on spend – for example if your campaign test budget is $500 across 10 ad sets, you might put a MAX of $50 per ad set for testing purposes only
  • Where possible you should avoid making edits to a new CBO campaign in the first few days, with the exception of pausing extremely poor performing ads.
  • Start off using auto bids before jumping into manual bids and get used to how CBO allocates the budgets to your ad sets and ads
  • If you’re running small budgets or small audience sizes, then consider which objective/optimisation event you’re using. Smaller budgets can still produce the 50 conversions a week Facebook asks for – this may mean optimising for Add To Carts or something else higher up the funnel so be creative with this. Lifetime budgets have also proven to work well for us with smaller budgets as explained in The Ultimate CBO Cookbook.
  • I run a community full of Facebook advertisers at literally all levels of CBO, including case studies on CBO and insights. Go use it!
  • For the price of running a day’s worth of testing on your ad account, you can instead grab my low-cost training program on CBO which covers the exact how-to of CBO and goes further into how I structure campaigns, my exact testing process, how I optimise performance and then scale up, including retargeting, dynamic ads and small budget strategies. Plus there’s Q&A videos to expand on the most common questions. See more via The Ultimate CBO Cookbook.

Here’s the PDF version of this guide which you can print and make notes on.

In Summary

This guide should give some guidance and confidence on the potential paths to take. Transitioning needs to be right for you and your business to ensure you’re prepared and learning how CBO works and that you’ve moved over to CBO before Facebook forces you.

It still requires testing and adapting on your part. There is no simple switch to make CBO magically work. But when used well, CBO will pay you back nicely.

The Ultimate CBO Cookbook is the closest you’ll get to a silver bullet – the success stories are WILD. Literally step by step instructions on making CBO work used by advertisers spending $50 per day through to $25k per day.

Any tips you’d like to share? Let me know below.


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