CBO for Facebook Ads – An Introduction (feat. Ian from Attn Labs)

Facebook’s Campaign Budget Optimization (CBO) aims to better distribute your campaign’s budget across all the ad sets in your campaign. It’s no longer planned to be a mandatory feature, but as ad platforms move towards AI driven decision making, make sure that you’re on top of how this new feature works. In this video, we have invited Ian from “Attn Labs” on the channel to give us a little run down of how CBO works.

? Links:

Attn Labs’ Site

Attn Labs’ Youtube Channel

About Campaign Budget Optimization

About the Facebook Power 5

In this video, Ian, from attention labs, it’s going to show you how you can utilize the automated campaign budget optimization feature for your Facebook ads. All and more coming up.

Hey there measuregeeks. Julian here, back with another video. Today, we invited Ian from attention labs on the channel. They do growth marketing for e-commerce and influencer businesses and use Facebook ads with great results. Ian is also part of our measure master community. So I ask him anything new happening with data within the Facebook ads? And his answer, the Facebook Power5. Tell me more. The Power5 is Facebook’s initiative to make advertising easier on their platform through automation. One interesting part of this is C B O Campaign Budget Optimization, where Facebook takes your available data and tries to optimize your campaigns based on the budget that you give to that campaign. Now, I’m always a bit cautious when it comes to using these new features that these advertising platforms come out with and say, it’s magic. You don’t really have to do anything anymore because oftentimes you need to understand what actually goes into the system. What does the system do in the background before you can set it and forget it. So today Ian is going to show us how we can utilize this new feature within our Facebook ad campaigns. Now, we’ve got lots to cover. So Ian, take it away.

Hey, what’s going on guys. Julian, thank you for that awesome introduction. I really appreciate you inviting me on to teach some of this automated Facebook ads account structure to your audience. So without further ado, let’s get right into this. Now, if you’re watching this video, you’re probably someone who works with advertisers, helping them with their tracking and analytics plan. You are an advertiser or you’d like to start getting involved in advertising or learning about how to run ads. And one of the biggest things that’s happening in the world of Facebook advertising is some of their automated account features that allow you to structure your account. So it can be a little bit more hands off and you can automate some of the testing and learning process that you’re doing with your ads. Now, Facebook has developed a number of technologies to allow us to do this, and they kind of include them under their umbrella of what they call the power five.

The power five is a name they came out with mostly just as an internal marketing campaign for Facebook and how they present and talk about their automated ads features, which include all the machine learning and artificial intelligence that they use to get your account better performance. Now what’s important to keep in mind about this is that Facebook is incentivized to get you the best performance possible so that you spend as much as possible on their platform. So in this way, their incentives truly are aligned with the individual advertiser. Now that doesn’t mean we can just blindly use all the features that they’ve come up with. There are going to be some of these, which are more important to start out with and use than others, which is what we’re going to go over right now. So in talking about the power five, you have these five main technologies, auto advanced matching, account simplification, campaign budget optimization, automatic placements, and dynamic ads. Without getting too into detail briefly what these are are, for example, let’s start with auto advanced matching.

All this is, is it’s a way that you can send additional customer data into your Facebook ads campaign. Now for most people, you’re not going to want to focus on this. It’s probably going to require developer support. So we’re just going to keep moving on. The next part is dynamic ads. This is a way to automate some of your creative testing for the videos and images and copy and headlines that you’re using on your ads. We’re going to get into how to do this on the account in the actual Facebook ads account manager, but just it’s important to know upfront. This is going to be a main part of their technologies that you will be using as an advertiser. The next part of the power five is automatic placements. And now all this means is an automated way to test across the placements on their platform.

Meaning the Facebook newsfeed, Facebook stories, Instagram stories, non-story Instagram posts, all the different types of placements that Facebook has, including their advertising partner networks and how you can test across those different placements without having to manually go back and forth from these different placements. This is another feature that many Facebook advertisers use. You’re definitely gonna want to use it, but we’re not going to focus on it because out of all the features, this one is the easiest to use, and it requires the, uh, most, uh, the least understanding of, you know, how to use it. You basically can just flip it on or off depending on the account you’re using. So we’re not gonna focus on that. The next part is campaign budget optimization. And this has been kind of the big issue for most Facebook advertisers because originally it was thought that Facebook was going to make this mandatory.

It is no longer going to be mandatory. You’re still going to be able to use non CBO or campaign budget optimized campaigns, as well as the campaign budget optimized campaigns. So it’s no longer mandatory, but it’s still super important to be able to use this. In fact, I think that the best Facebook advertisers are going to be the ones that understand how to use this along with their normal non-automated campaigns, which is really going to be a lot of what I show you how to do in this video. So just to wrap that up, we’re going to be focusing on dynamic ads and campaign budget optimization. And what that’s gonna do is it’s gonna allow us to reach this level of account simplification. And you’re going to see really clearly why using these two features allow you simplify your account and get better performance. So without further ado, let’s get right into the account and talk about how this looks when you’re setting it up.

So I’m here in a demo account I set up. This isn’t related to any companies we work with. It’s just my own little account that I set up for this purpose. And what we’re going to do is I’m going to show you exactly what a campaign budget optimized campaign looks like. And we’re going to use this CBO one conversions campaign. And then we’re going to compare that just to the structure of an ad set budget optimized campaign, this ABO one conversion campaign. And what you’re going to see is how dramatically this is going to simplify your account structure. And I’m going to give you a basic plan to go from a fully manual account to a fully automated account. So without further ado, let’s get into the CBO account. What you’re going to see here is three different ad sets that I just use as demo

ad sets labeled audience one, two, and three. We’re going to use it with all placements again, because we’re automating the placements. And then this is just a place holder for demographics. So don’t worry about the title. It’s not important. Just know that this is a campaign with three ad sets. We’re going to go right into the ads editor so you can see the overall structure. So what you’re going to notice right away is how simple this is. We have these three different audiences labeled audience, one, two, and three, and we have three different dynamic ads. And this is an example of what a built out fully automated campaign would look like because we’re controlling the budget at the campaign level. Facebook is optimizing how much of that spend is going to each of these three audiences. And then within each of these three audiences, we have dynamic ads.

Now, when we go into the dynamic ad, what you’re going to see is that they have these slots for the creative, the headline and the main text you’re using in the ad. And what you’ll notice right here is showing one of 10. And what this means is that we can load up up to 10 creatives, which Facebook within this one dynamic ad will test to see which one of those creatives gets the best performance. You’re also going to see the same thing here with the primary text, the headline and the description. One of five, which means we can run up to 10 variations on the creative, you know, the image or the video, and then up to five, each of the primary texts, headlines, and descriptions. Now I don’t think I need to tell you how many variations that’s going to equate to. And I’m not about to turn this into a video on multiplication, but you can use your imagination and quickly realized that between three different audiences, with three dynamic ads, you’re going to have hundreds and hundreds that may be in the thousands of variations running.

So overall, what this does is it allows you to test a much larger inventory of creative text, uh, you know, just creative and copy. Then you would be able to do on your own. Now this has some downsides and some upsides, which I’m going to get into, but right away, just notice how complex this can get with all these variations. So the first thing that I want to discuss is the audiences and getting an audience through the learning phase. The most important consideration when we’re talking about campaign budget optimization is this right here, campaign spend limit. Now this is going to be how much you want the campaign to spend over a certain period of time. But right here, we’re going to have the daily budget for the campaign budget optimization. As you can see, this is turned on, and this is going to tell us how much we’re willing to spend every day across all these ad sets.

Now, this is important because if your budget here is too low, there’s no way that you’re going to get each ad set through the learning phase. And the learning phase is your most important consideration at the audience or ad set level. So I’m going to say that again, the learning phase is the most important consideration at your audience and ad set level. What the learning phase is, is it’s a way that Facebook indicates whether or not it’s going to be able to optimize an ad set that you’re using, or the audiences that you have on those ad sets and what Facebook terms, the learning phase is the phase prior to that ad set, reaching 50 conversions. So for example, if you have an ad set that you’ve set your audience for that ad set, and then you’ve set that ad set to optimize on a conversion event of initiate checkout.

That ad set is not going to show that it’s exited the learning phase or completed that learning phase until it’s reached around 50 conversion events, which in this case would be that initiate checkout event. So what that should tell you is that there’s two main ways that you can get an ad set through the learning phase. The first way is to spend more money so that the conversion events happen more quickly because you’re sending more traffic through that funnel where that conversion event is so you can spend more money that’s one. And the second way is you can move that conversion event optimization for that ad set higher in the funnel. So what that looks like if we go here back to the ad set level, what you’re going to see is that when we go down, we have the option of what optimization event we want this audience to, uh, optimize for.

So you can see here, this one’s set to link clicks. Now, when you’re setting up your campaign, you’re going to be able to choose what event this is optimizing for the audience. And an important consideration is how far up in the funnel that optimization event is. So for example, this is link clicks through, on the ads that are running in this ad set. That’s very high up on the funnel. That’s the top of the funnel. But if I were to set up this audience so that it was optimizing for say a purchase events, that’s going to make it much more difficult to get those 50 events that you want in the learning phase of this, uh, ad sets life. And when you’re running ad sets at a, in a campaign budget optimized campaign, it’s going to be trying to spend the budget that you’ve sent for the entire campaign to optimize all those ad sets.

So an important thing that you can do in your ad sets that many advertisers are not aware of is you can set your campaign daily budget spend limit right here, and then you can come into the individual audiences that you’re running in that CBO campaign. And you can actually set minimums and maximums for their budget. So this is not normally going to show up when you come in here on a campaign budget optimized campaign. So when you set up a new CBO campaign, which you’re gonna want to do is you’re going to want to come into the audience. You’re going to go down, uh, to right where it’s, uh, in the audience right below where it has, uh, the scheduled start and end date. And you’re going to come down and you’re going to see this option here for ad set spend limits. So you’re going to click that and it’s going to come up with two different spaces, one for a minimum, and one for a maximum daily spend limit.

Now for most regular e-commerce companies, you’re going to want to spend at least $100 per day to get this through the learning phase. Of course, it’s going to be dependent on what you’re optimizing for, but in our experience, 100 to $200 per day for a normal eCommerce business, you know, you think of any normal storefront and Shopify will probably be good. Now, if you’re running a, a lead, a lead generation funnel, or you’re selling an individual digital product or low volume digital products, this is going to be completely different. So the important thing you should keep in mind is that this daily spend to get these ad sets through their learning phase is going to be completely dependent on the type of business you’re running and how much money it normally takes to get the conversion event that you’re optimizing for. So again, if you’re just optimizing for link clicks on ads, that’s going to be a much safer bet than, you know, if you’re running a really low volume, high ticket product, and you’re trying to optimize for conversions, obviously that’s going to be a much more difficult regardless of what you choose.

Make sure it’s something that you can get those 50 conversions on quickly. So as long as you understand that we can talk about how to get to a fully optimized account structure. What are the main things you have to keep in mind is that for all these ad sets, you want to get them through the learning phase prior to letting Facebook take over and distribute the spent as it sees fit based on its own internal optimizations. And the way that you do that is you set these ad spend limits at the beginning of a new CBO campaign, such that each of the audiences are able to get through that initial learning phase. So for example, if my budget here was, let’s say my budget for the CBO is $450 per day. What I’m going to come down and do is in each one of these individual ad sets, I’m going to go ahead and give it an ad set limit, and I’m going to go, or for 100 per day for each of these.

So right off the bat, what we’re doing is we’re giving each of these ad sets $100 per day so that they get pushed through that learning phase. And in addition to that, since the daily budget limit for the CBO is $450, we’re giving Facebook $150 of discretionary spend that it can distribute as it sees fit to maintain the highest performance possible through that learning phase. Now, what this is going to do, is it going to provide us with a way to start out with a fully manual campaign and then slowly move it to a fully budget optimized campaign as we get these ads that’s through the learning phase, and this is going to be important because if you don’t do this, what Facebook is generally going to do is it’s going to optimize for the best performance, which if you have three or four ad sets running in a CBO will usually mean that one will get over optimized quickly because it’s a getting high level of performance early in the campaigns, uh, campaigns life.

And it’s going to over optimize, push all the spend to that ad set, or two those one or two ad sets. And it’s not going to give the other ones a chance to get enough data for those ad sets to get them through the learning phase. You really want to make sure that if you’re setting up different audiences and different ad sets in a CBO, you at least give them the chance to get through the learning phase before you make the call on whether to shut them off or let Facebook continue to optimize as you move more and more of that spend in the campaign over to the, uh, campaign optimized structure. So the next thing we’re going to look at is that campaign that we just looked at with those automated ads, what that’s gonna look like compared to a non-automated campaign. And what you’ll see here is this is an example.

I’ve set up with the exact same structure, three audiences in a campaign, but with this one, we’re just testing two headlines, two pieces of copy and two creatives. That’s it just two. And what you’ll notice is that even just testing two headlines, two copies, and two creatives, we have a huge campaign here that becomes a much less manageable to tests and keep in mind that generally you’re going to be testing far more than two headlines, two creatives, and two pieces of copy. This is just to get us started so you can see how dramatic that difference is. Now, one thing that you’re going to want to do in order to use dynamic creatives is you’re definitely going to want to test at the creative level manually before you start using dynamic creatives. So you’ll notice that I just said that we can start with campaign budget, optimized campaigns, and then go from manual to automated just by adjusting the budgets.

But with these dynamic ads that I was running in the other example, CBO account, you’re really not going to want to start using those until you’ve tested headlines, copy and creative in these normal manual ads. And what you’ll see here is when I come down and look at the texts and the headline and the description, there’s no option to add in multiple variations here. There’s just one. These are the manual ads, and this is the way you’re going to want to test it. When you’re just starting out with a brand new account that has no tests on any of the creatives or copy or headlines. You’ll see here in the dynamic, creative within the ad, set the ad set level, the option for them to create it is turned off. So all we would do is we would test our creative headline and copy. Once we had two to three winners, we would then set up a new ad set, probably in a different campaign.

We would turn this dynamic creative button on, and then we could load up those proven headlines, copy and creative and start testing dynamic ads. So basically the whole process can really be summarized very succinctly in just three steps. I know we’ve gone through a lot of different things. But if you can keep track of this simple three step framework, you can understand how to take an account from fully manual to fully automated. So what we’re going to do is we’re going to start out with, if you want to get the quickest way to get to a fully automated account, what we’re going to do is we’re going to start out with campaign budget optimized campaigns. Like the one I showed you. Initially, you’re going to start out, you’re going to set your campaign budget. I’d suggest starting with a budget that allows you to provide one to $200 per ad set.

But for example, let’s say we’re going to start out with a CBO campaign with three ad sets. We’re going to come in here, have three ad sets. We’re going to set the campaign budget optimized campaign, daily budget at $300. And then we’re going to allocate $100 to each of those using that minimum within the ad set. So for each of these assets, we’re going to set a $100 minimum where that going to come in and here where I have a dynamic ads turned on. You can see right here, we’re going to turn that off. You’re going to start with non dynamic ads, and you’re going to start with two pieces of copy, two creatives, and you can test two different headlines. Just start with that. Don’t get too fancy. That’ll give you plenty of variation to start with. Once you’ve selected a winner from those tests, you’re going to earmark that for use later, and you’re going to push in the next set of tests and you can switch out copy creatives or headlines, whatever order you want.

It doesn’t matter. All you’re looking for is your next set of winners. Once you’ve gotten to the point where you have proven copy creatives and headlines, at least two to three of each that are working, that’s when you’re going to come in here and switch on this dynamic creative, and you’re going to load up and use these dynamic creatives within a campaign budget, optimized account structure. At that point, it’s really up to you to go in back in at the ad set level and come in and readjust these budgets. Eventually you can have a fully optimized and automated campaign if you’re using a CBO campaign where there’s no daily minimums on any of these assets, and you’re allowing Facebook to use, you know, 100% of the spent at the Facebook platforms discretion to shift it in between these different ad sets while they’re using these dynamic creatives.

If you can get to that point, you’re going to have a potentially going to have a campaign that you can scale very high while maintaining fairly consistent performance. And the whole process can be repeated over and over with different campaigns using new audiences and new proven copy, creative and headlines. So that’s basically how you’re going to take an account from fully manual to fully automated. I know that was a ton of information, but I’d suggest watching this video over one to two times, just making some notes for yourself on it. We may have notes below this video in the description, but overall, it’s a fairly simple process. If you can wrap your mind around moving individual ad sets from manual to fully automated using those ads set level bid adjustments, and then only using dynamic creatives once you have proven copy creative and headlines.

So I hope you guys enjoyed this. I hope you got something out of it and are able to use a little bit of this and understand these concepts moving forward. If you need more information, I really suggest you check out Facebook’s power five, especially looking into some of the details of how other advertisers have used dynamic creatives and used campaign budget optimized campaigns. So I really appreciate you guys watching this and Julian, thank you again for inviting me on to share some of this information. This has been a blast, and I hope we can work on something together in the future. So thanks guys.

All right, so there you have it. This is how you can utilize the new campaign budget optimization within Facebook ads. I’m curious, have you tried this out yet? What are your results? What are your experiences? Let me know in the comments down below. And thank you Ian for this insightful video. If you want to check out what Ian is up to, we have his website linked up down below. Attn labs has also a dedicated YouTube channel, which you should definitely check out if you want to see more videos, just like this one. And if you haven’t yet, then definitely should also subscribe to our channel right over there because we’re bringing you new videos, just like this one on marketing tracking data and so on every week. Now my name is Julian. The next time.

Julian Juenemann
About the author: Julian Juenemann

Julian started and grew venture-backed startups with his unique 'data first' approach to Online Marketing. He then founded MeasureSchool.com to help marketers, like him, the data-driven way of digital marketing.

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