Facebook recently announced that advertisers will soon be required to manage their ad budgets at the campaign level, as ad set level optimization will no longer be available.

This change might seem insignificant at first glance, but for experienced Facebook advertisers who value granular control over their campaigns, this limitation will have a significant impact. This move signifies another victory for Facebook’s machine learning algorithms, which the company has been increasingly integrating into its platform. What implications does this change have for your advertising endeavors? This article will delve into the meaning behind this shift, Facebook’s rationale for making campaign budget optimization mandatory, the advantages and disadvantages it presents, and its broader implications for the advertising industry.

What’s the rationale behind mandatory campaign budget optimization?

This was the first question that came to mind when my Facebook representative informed me of this update. To illustrate, my work with various B2B tech clients prioritizes lead quality as a critical aspect of successful ad campaigns. Navigating intricate marketing funnels demands stringent control over lead quality, which boils down to the level of control advertisers have in shaping the quality of leads generated. While the automation trend in advertising platforms doesn’t necessarily threaten job security, it could potentially diminish advertising effectiveness if marketers don’t adapt to these changes.

Back in 2014 when I began managing Facebook ads, the platform’s algorithm and machine learning capabilities were nowhere near as sophisticated as they are today. Marketers had to possess a deep understanding of the platform’s intricacies and utilize available tools for effective optimization. Fast forward to 2020, tech giants Facebook and Google are heavily invested in advancing AI and machine learning not only for automation purposes, but also for commercialization. Paid media is rapidly transitioning from its niche origins towards a more mainstream approach. In the past, digital advertising platforms thrived on complexity. Inexperienced users would unknowingly waste ad spend due to their lack of expertise in navigating intricate features and optimizations. Effective advertising required not just knowledge, but also constant attention – actively managing campaigns, adjusting bids, and refreshing creatives. Facebook initiated the shift towards machine learning by focusing many of its campaign optimization models on automated bidding, as manual bidding became less effective for most advertisers.

The widespread adoption of these platforms by individuals and businesses alike has resulted in increased competition, leading to higher advertising costs. To address this, platforms are emphasizing automation, enabling them to display ads to wider audiences across multiple placements. Take audience expansion, for instance. While it allows Facebook to broaden your audience reach, experienced advertisers understand that not all placements are equal. Similarly, “automatic placements” is another area where Facebook encourages reliance on its algorithm. While the Audience Network can reduce costs, the increased volume doesn’t always translate to higher-quality leads.

Examining the pros and cons of campaign budget optimization

Campaign budget optimization offers both advantages and disadvantages. While I’m not fundamentally opposed to this change, I believe making it optional rather than mandatory would be preferable. Regardless, it’s crucial to understand the benefits and drawbacks of CBO if you’re running ads on Facebook. Let’s explore them further.

Advantages of CBO

Campaign budget optimization, or CBO, empowers advertisers to manage ad spend and daily budgets at the campaign level. This might not seem significant for novice users, but it holds practical implications. By controlling budget at the campaign level, you essentially entrust Facebook’s algorithm to determine which audiences (ad sets) receive a larger portion of your budget. In my experience, this approach has yielded impressive results, leading to a surge in lead volume and reduced costs.

CBO can be highly effective depending on factors like the business, conversion action, or overall campaign objective. This effectiveness can be attributed to the impressive capabilities of Facebook’s machine learning and algorithms. However, it’s essential to acknowledge that they are not infallible and lack the experience and intuition of a seasoned marketer to make unconventional yet beneficial decisions tailored to a business’s specific goals.

Disadvantages of CBO

The challenges arise when you require greater control. For instance, with one particular client, we prioritize down-funnel conversion rates. Our current audience optimization strategy involves analyzing the MQL (marketing qualified lead) to Opp (sales opportunity) conversion rate. If an ad set generates a large volume of leads at a low cost but those leads aren’t converting into opportunities, we prioritize the costlier, higher-quality leads from other ad sets. Moreover, the differences between audiences are not always clear-cut. Some ad sets might only exhibit a marginal difference in their MQL>Opp conversion rates. One could argue for setting the ad set conversion event optimization to “opportunities.” However, this approach presents several challenges:

1. It’s not feasible when using Facebook lead ads.
2. Opportunities typically occur less frequently than overall leads. Optimizing for a less frequent event can negatively impact ad delivery.
3. Anyone familiar with platforms like Salesforce, Marketo, or Hubspot knows that optimizing for down-funnel metrics in-platform is a complex endeavor.

Understanding the implications of mandatory campaign budget optimization

I was informed that CBO will become mandatory for all advertisers around late February 2020. If your accounts haven’t been affected yet, the change is imminent. Here’s what you need to know to prepare: Ad Set Spend Limits: You can set spend limits on your ad sets, providing a degree of control if you notice one ad set consuming a disproportionate share of the daily budget. While not ideal, it’s an available option.

Account Restructuring: If you rely heavily on ad set level budget control, consider restructuring your ad account. This might be the most effective way to maintain control, although it could lead to a higher number of active campaigns. Naming campaigns after audiences instead of objectives or types might make your campaign tab resemble your ad set tab, potentially causing confusion due to varying campaign objectives. The rollout process for the mandatory CBO switch remains unclear. While I was informed of a late February 2020 implementation, my clients’ campaigns have yet to reflect this change. The mandatory switch might only apply to new campaigns initially. However, based on past experiences with Facebook Power Editor and Ads Manager, it’s plausible that the change could be rolled out abruptly.

RIP Acceptance: Life is about navigating disappointments. You’ll likely never achieve rockstar status, and Facebook is taking away ad set level budget optimization (both equally disappointing, in my opinion). If account restructuring isn’t feasible, I recommend switching existing campaigns to CBO as soon as possible. This will allow you to understand its impact on performance before the change becomes permanent.

Broader implications of CBO on PPC

My reaction to this change stems not from an overreaction to a minor detail, but rather from a growing concern about the direction Facebook and Google are taking. It’s evident that these platforms are increasingly shifting control away from advertisers. Google’s continuous promotion of automated bid strategies and now Facebook’s budget optimization highlight their desire for advertisers to trust their algorithms. While these systems are undoubtedly advanced, experienced users should retain greater control over ad delivery and budget allocation.

On the other hand, it’s important to recognize that these platforms have a vested interest in your success. They benefit from your financial gains and are invested in your positive outcomes.