CBO vs ABO (which to use) Facebook Ads 2021

When creating a new campaign, you might have seen this setting before:

In your business manager, create a new campaign and turn on CBO

If so, you may be wondering: What does it all mean? Which one is better? Why is the sky blue? WHO AM I? AHHH?!?!

Woah! It’s okay! We’ve got the answers (most answers anyways)! After reading this article, you’ll understand everything in the directory below. Feel free to skip to any section.

Directory:

We know this is a critical concern many people have and continue to ask us about, so you can always send this article to anyone in need!

If you’d rather follow our video, ABO vs CBO (which budget optimization to use) Facebook Ads 2021, we’ve linked it below!

What’s the Main Difference Between CBO and ABO?

In short, CBO, or Campaign Budget Optimization is a budget that is optimized by Facebook at the campaign level, and distributed across your ad sets and ads based on performance. ABO or ad set budget optimization is when the budget is set at the ad set level.

What is Campaign Budget Optimization?

CBO, or Campaign Budget Optimization is a budget that is optimized by Facebook on a campaign level.

When and Why Did Facebook Start Using CBO?

Facebook’s AI is constantly improving and learning. The company wants it’s advertisers to do well with their ads and get good results, since the advertisers are the real customers and the users are really just the the product.

In light of this, Facebook has given its advertisers a more simple way to manage their advertising budget and made the transition into setting CBO as the default budget distribution setting with the intention to produce better results for the advertiser. how it works and when to use it.

In February 2020, it became the default setting, meaning any new campaigns you create would have been automatically set to CBO, but you could easily change them to ABO.

How Does Facebook Use CBO?

Using CBO, Facebook distributes your budget based on each ad set’s performance. (the better performing ad sets get more funds). This means that the ad sets may not get equal amounts of money depending on their performance. This is because Facebook invests in the ads that it deems most likely to achieve the result you’re looking for.

How does Facebook measure ad performance? Simple! Well… as simple as AI is. You heard that right! Artificial intelligence is more present than we thought. Facebook uses AI to collect data on conversions by monitoring different:

Audiences
Creatives
Ad copies and titles
Trends
Geographic locations
Interests
Keywords

And more! This data has been collected from Facebook ads throughout the years to create a knowledge base for the algorithm, which it can use to estimate ad success.

Despite this knowledge, it still needs some data from your own ads, since every ad is different. That’s why it will invest more money in better performing ads.

With ABO, on the other hand, it is up to you to decide how much money goes into each ad set.

What is Ad Budget Optimization?

ABO, or Ad Budget Optimization was the only setting before Facebook came out with CBO. It is a setting that allows you to set the budget at the ad set level. Instead of managing campaign budgets and letting Facebook invest in ad sets with the money, you are managing funds for the ad sets instead!

What is the Difference Between Managing My Budget Using CBO vs ABO?

So if you think about driving a car, using CBO is like driving an automatic car, and using ABO is like driving a manual; a little bit of a hassle to learn, but easier to break when driving in snow! So, essentially you have more control.

CBO uses artificial intelligence to invest in the best audiences AND ads, while ABO uses AI to choose which audience to invest in.

When you are using a CBO model, you are managing your budget on a campaign level, meaning you decide how much money goes into each campaign. Facebook will then take care of managing funds between ad sets, and ads.

With an ABO model, you would still need to think about how much you want to spend on the overall campaign, but the budget is ultimately set at the ad set level.

A CBO budget adjusts dynamically over your audiences and ads (changes overtime) whereas an ABO budget stays static (does not change) unless you manually adjust it.

CBO will machine pick how much budget will go into which audience. However you are still targeting your audiences the same way in CBO & ABO. But if you have 3 audiences within a campaign, CBO will decide that A and B will get more than C.

Pros and Cons of Turning CBO On:

Pros

Lower cost per conversion when used properly!

Facebook is able to prevent overlap of our audiences between ad sets since the budget is centralized to one campaign.

You can avoid wearing the audience down because the budget adjusts dynamically between warm audiences and cold audiences

Less manual work.

Cons

Less control over your budget.

When Do I Turn On CBO?

When you have more data from the pixel for the AI to work with:

When you have a smaller budget: Facebook will optimize what little budget you have if you aren’t supplying enough to fund two campaigns.

When you have less experience with Facebook ads: you can rely on AI until you get a better understanding of the system.

When you are scaling: If you increase the budget, Facebook already knows which ad sets are performing well and will spend wisely, so you won’t have to change each individual ad set budget.

When Do I Use an ABO Campaign?

When you have a new ad account with very little data on the pixel: if the algorithm doesn’t have much to work with, it might not know what to do. If you’re starting off with a fresh ad account, try collecting enough data to guide the AI once you start using CBO.
When you are testing new creatives, audiences or copy: it’s good to keep test budgets the same, so that you know exactly how much better other ads are doing with the same amount of funds.
When your audiences are very different in size: Facebook will generally favor a larger audience size, without necessarily knowing what kind of audience you are looking for. If you are hosting a location-specific, niche event that has a very small but very warm audience, you might know who would be best to reach instead of Facebook. CBO will try to get the most reach, so if you really want to reach a smaller audience, you can control how many funds go into them vs your larger target groups.

How to Set Your Budget to CBO:

1. In your ads manager, click on Create a new campaign.

Create a new campaign to turn on capaign budget optimization

2. Scroll down to find the Campaign Budget Optimization setting. If you turn this option on, you’ll see options appear, where you can set your budget. If you turn it off, you’ll need to set your budget on an ad set level instead.

Click on the Campaigns section and edit your budget in the Budget column.

You can turn CBO on by edting within the budget collumn of your ads manager

If you turn CBO on, some options will appear. Keep your bid strategy to the default, which is lowest cost. We tend to see the best results with this.

Enter in your campaign budget.

When using either CBO or ABO, we suggest selecting the low cost setting using a daily budget

Our Proposed Strategy: How to Test with ABO, then Scale with CBO

There is no right or wrong way of running Facebook ads. However testing new ads is always a confusing topic. Here’s how you can use ABO to test, then use CBO to scale your best performing campaigns.

For each angle (method in which you want to present your product as the solution) you want to advertise for, create a different campaign. This way, you can experiment with :

Different topics (angles) in each campaign
different creatives in each ad set
different texts and titles in each ad

For these testing campaigns, we recommend you start by using ABO, since it’s good for testing. This will also let Facebook collect data on the ads performances so that it can know where to invest.

Try making sure you keep a smaller budget for this strategy, since you are only running tests.

To up your ad game, try out some of our creatives in our article on 5 Facebook ad Creatives That Convert.

After getting enough data from Facebook, try to figure out which campaign is getting the best CPA (cost per action).
Create a “golden campaign” with the best performing ads and be sure to target a large audience. We suggest keeping the targeting as broad as possible. Turn on CBO.
If your golden campaign is working well, try scaling up by increasing the budget by 5%-10% every 48 hours

DO: make sure you are doing this with a larger audience to avoid oversaturation. Investing too much money in a small audience may spam them, scare them away or worse: get your ad flagged!

DON’T: overspend! Make sure the reach you are getting does not surpass your capacity to serve new customers. If you invest in too many ads, you may get too many customers at once! Yes, it is possible to have too much of a good thing, especially if you are a service based business, or you have a limited inventory.

Summary

At the end of the day, there is no one-size-fits-all method, which might be why Facebook backtracked on their plans to make campaign budget optimization the only option.

As with any intelligence, AI has room to grow out of infancy. And who knows? We may find ourselves in a world where we have robot best friends and drone flown pizza delivery. Why not leave marketing up to the computer!

We advise you to take it slow and use both setups to experiment which drives better results. Make sure YOUR marketing strategy works for YOUR business.

If you’re not quite sure how to get there, don’t be afraid to book a free strategy session with us, where we can help you come up with a plan!

As always, feel free to leave any comments or questions on this page, so that I can leave no stone unturned!

About The Author:

Sydney Switser

Facebook ad specialist

Sydney Switzer is a Facebook ads specialist who is always on the lookout for new, creative ways to catch an audience’s attention. She is drawn to the visual aspects of content creation, and will always value creating unique relationships with all her clients and customers.