cbo vs abo facebook ads

CBO vs. ABO? Facebook Campaign Budget Optimization or Ad Set Budget Optimization?

There are two ways to optimize your spend or budget in a Facebook ad campaign: Campaign Budget Optimization (CBO) or Ad set Budget Optimization (ABO).

Facebook introduced CBO about 3 years ago and many advertisers were initially resistant to the change. But there are times when CBO works better than ABO. In this tutorial, I’m going to talk about the pros and cons of each type of budget optimization strategy and which one to use when.

Where to find Campaign Budget Optimization vs. Ad set Budget Optimization in Facebook

I’m going to use an example ad account to show you where to find the place where you fill in the budget for CBO or ABO.

Ad set budget is set at the ad set level

The current default setting in Facebook is Ad set Budget Optimization. When you set up a campaign and set your daily budget, you will do that at the ad set level of the campaign as shown below.

When you set you budget at the ad set level, Facebook will spend across the different ads in your ad set and allocate your budget according to which ad is performing the best. It’s always a good idea to run multiple ads to see which one is going to work the best in a particular campaign.

You will see various splits in budget allocation depending on the creatives you use in your campaign. Facebook is very good at working out which ad will get you the best results according to your campaign goals and you may see the way that Facebook is allocating your budget between ads change over time.

Ad set optimization set up example

About 3 years ago Facebook introduced Campaign Budget Optimization.

When this feature was introduced it was the default setting for a while and Facebook had also talked about how they were planning on getting rid of Ad Set Budget Optimization. But due to advertiser push back they have kept Ad Set Budget Optimization as the default option and you have to choose Campaign Budget Optimization if you want to use it.

You will find the Campaign Budget Optimization option at the campaign level of your Facebook ad campaigns.

Campaign budget optimization set up example

At first glance, CBO is a good idea. After all, if Facebook automatically puts more of your campaign budget into the ad sets that are working the best, then your overall results are likely to get better and your cost per conversion is likely to drop.

For most campaigns, this is exactly what happens. Usually, Conversion Budget Optimization will outperform Ad Set Budget Optimization. That’s why CBO is what I recommend as a starting point for most Facebook advertisers.

The only real downside is that you do lose some control over your campaign and have to trust that the Facebook algorithm is going to do its job properly. Because of that loss of control, there are some instances where ad set level spend makes more sense and works better.

The Advantages of Campaign Budget Optimization

Advantages of campaign budget optimization

For most advertisers and in most circumstances, Campaign Budget Optimization is going to work the best. Here are the reasons why.

You’ll get a lower cost per result on average.

More money is going to be spent on the best performing elements in your campaign with less money being spent on the losing elements. Facebook does this automatically with Campaign Budget Optimization and you don’t have to monitor it.

You don’t have to worry about audience overlap between ad sets.

This is a big advantage. Because Campaign Budget Optimization is centralized, you don’t have to worry about audience overlap between ad sets. Facebook is smart enough to work out when there is significant overlap between audiences and not bombard people.

If you use Ad Set Budget Optimization you can burn out your audiences faster because of the audience overlap effect that Facebook can’t compensate for when your budget is set at the ad set level.

You can combine cold and warm audiences into a single campaign.

When you use Campaign Budget Optimization you can combine cold and warm audiences into a single campaign. With CBO your budget is adjusted automatically between ad sets depending on what is working at the moment.

Your warm audiences are usually smaller than your cold audiences, but they typically convert the most effectively. That means you want to spend as much money as possible on the warm audience without burning them out. A CBO campaign that mixes cold and warm audiences will help you do that.

Facebook will automatically adjust your budget amount for your audiences so that you get the lowest cost per event and the algorithm will take into account the size of your warm audience as well as how responsive each audience is at the moment.

The Advantages of Ad Set Budget Optimization

Advantages of ad set budget optimization

While Campaign Budget Optimization is the right choice in most circumstances, Ad Set Budget Optimization can work well in specific circumstances because it gives the advertiser more control over where their money is spent.

But just because you have more control doesn’t mean you will get better results.

Most of the time we use CBO, but for a few select campaigns we do use Ad Set Budget Optimization. ABO campaigns work particularly well for Omnipresence campaigns, and a few other advanced types that I go over in detail in our Facebook Ads Insiders Course.

Free Resource: I discuss how and when to use Omnipresence campaigns in my post “My #1 Long Term Facebook Ads Strategy.”

One place we never use ABO is for split testing audiences. We find that Facebook is much better at working this out faster than we can.

Pro Tip: You used to have to go a lot more detailed with your targeting and budgets for Facebook Ads. But Facebook’s algorithm has become so good that often using Campaign Budget Optimization and having larger audiences will get you better results than trying to control every detail yourself.

More Free Facebook Ads Training

There is nothing I like better than to see business owners increase their ROI with Facebook Ads. In order to help business owners succeed with Facebook ads I’ve created a FREE webinar training that you can register for here.

Free Facebook ads training

When you attend this webinar you’ll learn:

  • 3 different Facebook ad strategies that we use every day. These strategies have generated millions of dollars in revenue and are tried and proven to work.
  • How to customize the Facebook ads strategy to your particular business. There is no such thing as a one size fits all approach to Facebook ads.
  • How Facebook and Instagram have changed and how to adjust your ad strategy to what works in 2021.

Campaign Budget Optimization vs. Ad Set Budget Optimization Video Tutorial

In this video I show you when you should use Campaign Budget Optimization over Ad Set Budget Optimization and why letting Facebook optimize your campaigns will usually work better.

The Bottom Line on CBO vs. ABO

For most people, most of the time CBO campaigns are the hands down winners because:

  • You’ll get lower cost per result on average.
  • You don’t have to worry about audience overlap between ad sets.
  • You can combine cold and warm audiences into a single campaign.

There are a few exceptions, like Omnipresence campaigns and a few other advanced strategies that ABO works well with, but if you are in doubt then choosing Campaign Budget Optimization is a safe bet. For more information on advance campaign strategies check out our Facebook Ads Insiders Course.