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Facebook campaign budget optimization: How marketers must prepare for September 1, 2019

If you are using Facebook’s Ads Manager, campaign
budget optimization
(CBO) will become mandatory for all ad
campaigns as of September 1, 2019. 

If you are using an API tool like AdRules, you have until
September 2020 before it is mandatory.

If you do any advertising on Facebook, you will be affected by
this change. It will apply to both new and existing ad
campaigns.

If you don’t want a rude awakening on September 1 when CBO
activates in Ads Manager and your Facebook campaigns start to
behave very differently, you need to start testing
campaign budget optimization
now.

Example of campaign budget optimization for Facebook AdsManager

While nobody likes mandatory, sudden changes, this is not all
doom and gloom. There are some considerable upsides to CBO. You
will have to give up some control over your campaigns after
September first, but with CBO:

1. You’ll have less to manage

If you spend hours adjusting bids every week, or if you pay
someone else to adjust bids every week, much of that
bid optimization
work will be over.

When campaign budget optimization is activated in Ads Manager,
Facebook automatically shifts the ad budget to whichever ad set in
a campaign is most effective. You get to control the definition of
what “effective” means by specifying a goal for each campaign.
Goals that are fairly late in your sales funnel, like a purchase or
a download, tend to work best with CBO.

Because all that bid management work will be done by the
Facebook algorithm, you may be able to hire less expensive people
to manage your campaigns or have your team members work on more
networks or accounts. Or, if you’ve been doing those bid edits
yourself, you may find you suddenly have extra hours free every
week. We recommend using those free hours to
develop better creative
, to study your competitors’ creative,
or to set up a more efficient
creative testing machine
.

2. You’ll get a better return on ad spend (ROAS)

While there were some early reports of CBO not working as well
as human-managed campaigns, the algorithm has gotten considerably
smarter than when it first launched.

We’ve found that if a campaign is set up properly and the bids
are high enough, CBO generally can get better results than a human
can get.

CBO will also reduce how often your campaigns are put into
“learning mode”. That means you won’t get
penalized
when Facebook’s algorithm reassesses your
campaigns.

But you do need to give campaign budget optimization time to
work. The algorithm needs about 50 conversions per ad set, per
week, before it accrues enough data to ramp up your campaigns. And
speaking of ramping up campaigns if you want to
scale your campaigns
, CBO is extremely effective. Especially if
you
keep feeding it new, high-quality audiences
.

3. You will still be able to control spending (to an extent) with
ad set spending limits

If you set a minimum spend for an ad set, Facebook will
dutifully spend at least that amount. And if you set a maximum ad
set spending limit, Facebook will not go over that limit.

This is a way to set a “governor” of sorts on your spending.
It will force Facebook to run ad sets perhaps longer than it might
otherwise have, but if you’re not quite ready to relinquish
control, ad set spending limits are a way to ease into this new
campaign management approach.

Those of you who also advertise with Google’s App Campaigns
may have an edge already. Facebook is in some ways following
Google’s lead by requiring advertisers to shift over to automated
budget optimization.

You could, potentially, get around CBO by creating dozens or
even hundreds of campaigns, each with on single ad set. But that
would be working against the algorithm. And besides, CBO works
well. There aren’t many good reasons to try to circumvent it.
Especially when you use it along with other
Facebook best practices
and Facebook’s simplified campaign
structure
 recommendation.

Start testing campaign budget optimization now

The benefits of CBO are proven, but you need to start testing
now to see how to make it work well for your accounts. We still
have a couple of months until the change in Ads Manager, but you
may need to run multiple week-long tests to get the hang of this
new budgeting strategy.

You may also need to shift how you’ve been defining goals.
Using CBO for clicks is a waste of potential. Instead, look towards
the end of the buyers’ journey. We like to optimize not just for
app installs, but for specific app events like purchases. And not
for just two-dollar purchases, we target people who are likely to
spend $20 or more.

As you begin to
test and measure CBO
, don’t get too attached to the results
of individual ad sets. Look at the campaign level, as this graphic
illustrates:

Comparative study of having vs not having campaign budget optimization

Also, get ready to bump up your creatives. For CBO to work, it
often needs several creative assets for each ad set. Including a
few videos and elements for dynamic creatives helps too.

Pay close attention to your audiences, too. Many advertisers
have found that CBO works best for them if they create separate
campaigns for different audiences like one campaign for cold
audiences and another campaign for a “warm” audience, like a
retargeting audience.

Get ready for things like “The
Breakdown Effect
” to make your reporting look a little
strange at first. “The Breakdown Effect” occurs when discount
pacing (how frequently your ads show) intersects with discount
bidding and makes it look like the system is overcharging you for
conversions. What’s actually happening is the system is trying to
find the most affordable conversions first, then it tries to find
more expensive conversions.

Graph showing "The Breakdown Effect"

If you do a lot of testing, this breakdown effect pattern may be
familiar. It’s similar to how one cell of a
test
can look like a winner at first but as the data accrue,
that early winner falls away and another cell is shown to perform
better in the long-term.

Closing thoughts

Facebook is evolving. Everyone knows this, but the CBO change in
September for Ads Manager is yet one more example of it happening
again. And because Facebook’s advertising platform is evolving,
advertisers have to evolve with it, too. If you’re still doing
Facebook advertising like you were a year ago, you’re losing
money and missing out on better ROAS.

Brian Bowman is the CEO of ConsumerAcquisition.com.

The post
Facebook campaign budget optimization: How marketers must prepare
for September 1, 2019
appeared first on Search Engine Watch.

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